- Why are we experiencing such a cash crunch when our balance sheet appears to be solvent?
- What does our cash position really look like?
We answer the above questions with CEOs by entering the crisis and immediately assessing the financial situation so that CEOs can determine the company’s financial position and react accordingly. Companies in distress need turnaround consulting to ensure especially accurate financial reporting including cash projections, and performance projections, as well as tight cash controls.
- How do we exit out of the current distressed situation?
We answer the above question for CEOs by acting quickly to develop an exit strategy, whether this involves restructuring operations, recapitalizing the business, restructuring debts and if absolutely necessary, filing Chapter 11, or selling the company or certain nonperforming divisions/assets. Turnaround consulting focuses on creating quick strategies to create momentum, allowing business leaders to seize opportunities that arise, and create buy-in with creditor constituencies.
- Will our lenders/creditors be open to debt forbearance/modification?
- Given our current situation how can we justify to the banks our cost of engaging turnaround consulting services?
We answer the above questions with CEOs by working with lenders/creditors to determine the best solutions for all parties involved. Banks sometimes will forego some debt service or interest payments to free up cash to pay for the cost of retaining turnaround consulting services. A skilled CFO Consultant will make enough adjustments to a company’s cash flow to quickly justify their own value.
- How do we maintain the trust of our vendors (so that they will ship), and customers (so that they will buy), as well as our lenders (so that they will continue to lend and allow use of cash in bank accounts).
- How can we avoid burning up critical management focus if we are forced to testify, whether at collection hearings, in litigation, or in bankruptcy proceedings?
We answer the above questions with CEOs by becoming the direct company contact as to creditors, customers and lenders. A good CFO Consultant is experienced at building rapport with angry creditors to help the company get credit terms and move back toward profitability. Also as part of our turnaround consulting services we help avoid, or limit, testimony by officers and directors by taking their place as the chief restructuring officer (CRO) of the company.
