When Should Your Business Be Restructured?
Every year, hundreds of Australian businesses fail due their inability to adapt to the market. With so many different variables, businesses can quickly find themselves in financial trouble. Although restructuring will cause employee uncertainty, a loss in assets, and a shift in public image- sometimes it can be used as a last result, to help businesses start on the right track. We at M.A.S Partners, the leading small business accounting firm in Sydney, understand the impact restructuring can make on a company, and have provided some signs that should make you consider if your business needs to be restructured.
The last thing you want as a business, is to lose to your fellow competitors. Every successful business has something that differentiates them- such as product quality, price, or marketing. When your competitors are providing both better prices and quality, there is no reason for customers to purchase products or services from your business. Differentiation can be from anything that keeps consumers coming- if you have one that is impactful enough, your business will be competitive. When your business does not have a differentiator, you will not be competitive and should consider restructuring.
Lack Of Growth
Although most businesses plateau, it is important that your business’ growth does not completely stagnate. If you plan on expanding your business, but cannot seem to achieve growth, it is a clear sign that your business needs restructuring. Restructuring your business can help highlight what your business was doing wrong, and how you could improve your efficiencies and resources.
Continuous Revenue Drop
This plays off the lack of competitiveness- where if you are not competitive, there will be a continuous drop in revenue. Poor financial records are clear signs that something in your business needs to be changed. It can be an indicator that your business is no longer profitable, and that restructuring may be the only option left. Every business’ number priority is to have profit. If your business is not profitable, it is better to restructure sooner rather than later.
Shift In Customer Base
Although not as obvious as the other signs, a diminishing or shift in customer base is an indicator that your business needs to be restructured. It is important for every business to have a clear target segment- who they sell their products or services to. However, overtime your consumer demographic may change, either through technology advances, or a change in consumer taste. When this happens, your business is in a great place to restructure.
Consider M.A.S Partners For Small Business Accounting Services
Restructuring should be used as a last resort. By hiring a small business accountant, you receive expert advice, whilst having your finances effectively handled stress free. Our small business accountants at M.A.S Partners work with many different companies and understand what your business needs. We know that every client is unique and provide specialised advice that will help your business develop through our small business accounting services. For more information on our business accounting, click here.