Tips to Help Turn Around a Struggling Business

23 August 2016 by National Bank

Have you just lost a big contract? Have sales plummeted over the last few months? Are you suffering one loss after another? If your business is going through a rough patch, it's essential to seek help as soon as possible.

We spoke to Nicole Chalifoux, a senior manager with National Bank's Commercial Turnaround Unit, to find out how the Bank helps businesses in this situation.

When should a business talk to its bank about financial problems?

As soon as it starts experiencing cash flow issues. According to Chalifoux, if a business is having financial difficulties, you can be sure that its bank already knows. Chalifoux stresses the importance of keeping a close eye on cash flow by using a dashboard to help spot any problems. Having a good controller within the company is also essential. If problems are piling up, talk to your bank before the situation gets any worse. As Chalifoux explains, National Bank is patient and open-minded with clients who are experiencing difficulties, and it will look to develop a personalized business relationship with each client.

Trust is the key to success

As soon as Chalifoux and her team take charge of a business's file, they become the client's champions within the Bank and with any other partners involved in the turnaround process. It's clear that this commitment to turning the business around must be built on a relationship of trust between the client and the Bank. The client has to be upfront and deliver on its commitments at every stage of the turnaround process, which usually lasts between 18 and 24 months.

Chalifoux tells us that business owners are often worried her team will shut down or liquidate their business, but this is the last thing they want to do. The aim is to help businesses get back on their feet and return their file to their regular advisor. Throughout the process, the Bank takes a respectful and understanding approach. It strives to maintain a good relationship with the client while at the same time working diligently to produce an appropriate action plan.

Tailor-made solutions and regular follow-up

Once Chalifoux and her team have determined that the business is capable of overcoming its difficulties, they will work with the business to find solutions. Often, a payment moratorium will be granted to take some pressure off the business's cash situation. In some situations, the Bank will negotiate with its partners to find new sources of financing. It may also suggest that the client negotiate its payment terms with its suppliers.

Finally, in certain cases, the Bank will call in an external consultant to work closely with the business during the turnaround process. Thanks to this approach, based on trust, listening and patience, many businesses are able to weather difficult periods and return to profitability.

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