During the last decades, restructuring has been the only option for thousands of companies in our country. The reasons are numerous: Maybe it is necessary to take action against high costs, the low efficiency has become a problem, or something has to be done to increase the productivity of the company with few workers. However, despite the fact that restructuring is an operation that occurs so frequently, in very few opportunities it is carried out in a complete, direct, and definitive manner. What normally happens is that companies choose to make small modifications, although they need something else, without taking into account that a large number of small modifications are more exhausting than constructive in the long run.
All companies go through a time when it is necessary to adapt to the new changes (if they do not want to disappear.) In fact, such changes seem to be the only constant, even if it sounds paradoxical. Staff, systems, processes, infrastructure, etc. need to be renewed, and this need is usually noticeable when a dilemma between growth and disappearance is present. Regrettably, many entrepreneurs are late in realizing these needs, and restructurings become more traumatic than if they were done in an organized way. So, it is important that you recognize the signs that tell you when it is time to restructure your business.
Read also: Everything You Need To Survive Organizational Restructure, by Suzzanne Uhland
One of the clearest signs that you need to restructure your business is the changes in the industry to which you belong. How long have you been doing things as you do them now? Maybe you have ignored new trends, techniques, methods, or formulas that would even help you optimize all the processes of your company. The most normal thing to expect is that technology is not the same now than the one you used when you started your business.
If you are unaware of the changes taking place in your industry, you could be losing money (because prices may be changing,) as well as opportunities to do business, or even customers, since your competitors could be updated. For this reason, if you know that this is happening with your company, it is time to restructure your business significantly, and change may be the most positive thing that happens to you and your business.
Another frequent reason to restructure your company is the excessive workload with which your workers have to deal. This could be seen as a good thing because there is work, they are busy, and there is money running. However, this is a sign of inefficiency. Actually, this is not much different than when the clothes are too small for a growing child: It is necessary to change them. If you can hire new members for your work team, do it: Hire people from various disciplines who know and can process all that work load so that your company is restructured and grows. In case you cannot hire new workers (for any reason, for example, the very nature of your business,) then you could reorganize the operations more intelligently and even automate some functions.
Mergers and acquisitions are also a sign that your company must undergo drastic changes. Normally, when two companies merge it is necessary to adjust the way they both operate and this means standardizing many processes. Many entrepreneurs and workers do not like this scenario, but, in reality, it is the only way that mergers and acquisitions can be carried out in practice. In the great majority of cases, it is necessary to check both companies so that there is not a duplication of functions in different workers and departments, and, on the contrary, to seek that their functions are complementary.
Of course, financial matters can also be a sign that everything must be restructured. When companies want to grow or receive a financial stimulus from the government or a foundation, they are often asked to restructure everything that has never been consciously organized. In many companies, especially the small ones, most processes are developed empirically, without a prior analysis of how things should be carried out. So, if you are about to receive cash, or if you are looking for it, you should think about restructuring your business to make the best impression on the investors.
The inability to pay the debts of the company is also a sign that you need to restructure. Saving a bankrupt company requires analyzing what is needed, what must be left over, what mistakes have been made, how much money is owed, and what strategies must be implemented to get out of the crisis. In these cases, restructuring is not optional. As Einstein said, only a madman expects different results from the same actions.
Do not wait for it to be too late. Watch the behavior of your company all the time, and if you notice some of these signs, look for your legal and financial advisors and take the necessary measures to restructure your business and go ahead as a winner.
Recommended: Benefits of Restructuring a Company
* Featured Image courtesy of Tim Gouw at Pexels.com