Overcoming Financial Challenges and Steering Toward Success

Sometimes, no matter how much effort and perseverance you put in, the results just aren’t meeting the expectations of shareholders. To be clear, “not satisfactory” can range from doing reasonably well but missing targets, to worrying when the bank calls. Let's look at some key areas to get your company back on track toward sustainable profitability.

This Is a Team Sport

Turning a company around is challenging and requires a collective effort. Start with your leadership team, ensuring everyone is fully aware of the business’s current status. If you have an annual planning process and regular leadership meetings, there should be no surprises. If you don’t, be candid with your team. If you can’t be direct with some members, they might not belong on the team. Avoid blame games; instead, foster a sense of unity and collective responsibility.

Extend this transparency to your quarterly company-wide meetings. Clearly communicate the need for everyone’s help to get the business back on track. If your culture has not been to share numbers, I might not start now. Rather, use percentages of target or to last year’s results. And don’t hesitate to solicit ideas from all parts of the organization — you might be surprised at the valuable insights you receive.

Business Intelligence

Good performance data is crucial during challenging times. Don’t fall for the “we just need more sales” mantra; while increased sales help, they won’t solve everything overnight. Ensure sales growth isn’t masking underlying inefficiencies. Your aim to be profitable with your current sales, but don’t let off the pedal for your new business initiatives.

Evaluate your staffing and efficiency. Track chargeable hours, overtime, and productivity by employee and department over time. Analyze ratios and trends compared to more profitable periods. Consider if your costs are rising and when you last raised prices. Examine any additional non-value-added costs you’re incurring. Leverage all available technology and software to eliminate unnecessary expenses and redundancy.

Accurate data is vital. Regularly review your key performance indicators and financial statements to diagnose issues. Understand and utilize both leading and lagging indicators appropriately.

Details Matter

Correcting a business’s course usually requires precision rather than drastic measures. This is where your external advisors — accountants, bankers, legal counsel, or consultants — can offer valuable guidance. Take a measured approach to ensure each action is effective. Remember, your staff will be observing every move.

Discipline: The Hard Part

One of the toughest aspects of a business transition is the slow pace of change. Deciding on actions is the easy part; implementing them thoughtfully and consistently is harder. Monitor progress and be prepared to adjust as needed but remain persistent. Your situation didn’t develop overnight, and it likely won’t improve overnight either. Stay committed, and you’ll achieve your goals.

NOTE: I have a simple, but effective Income Improvement Spreadsheet that I’m happy to share. Just reach out and I’ll send it to you.

If you have questions or want to share your experiences, please reach out to me. Good luck and let me know how you’re doing.

Mike Philie can help validate what’s working and what may need to change in your business. Changing the trajectory of a business is difficult to do while simultaneously operating the core competencies. Mike provides strategy and insight to ambitious owners and CEOs in the Graphic Communications Industry by providing direct and realistic advice and insight, not being afraid to voice the unpopular opinion and helping leaders navigate change through a common sense and practical approach. Learn more at www.philiegroup.com, LinkedIn or email at mphilie@philiegroup.com.