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Pre-turnaround checklist: 25 questions to answer before you commit to a turnaround plan

Before you start a turnaround, fact-finding and planning is critical. You need to have a detailed plan and focus on executing it well. Setting the right plan is imperative not just for achieving a successful outcome but also realizing goals expeditiously and efficiently.

To help you get it right, here are 25 questions to consider before jumping into a turnaround process:

1. Have you properly established how to communicate and message the turnaround plan?

2. How will the progression of the turnaround be monitored and reviewed?

3. What does the company need to do to have a reliable 13 week cash flow forecast?
4. How do you develop the cash culture of the company?

5. Where/what are profitable parts of the operations and how can they be increased/expanded?
6. Have the true causes of financial under-performance been identified?
7. Are there any "lazy" assets which could be sold or used for finance?

8. Is the forecast realistic or does it look like a hockey stick?
9. Have we established the KPIs and lead indicators to monitor and measure performance?

10. Is the right management team in place?
11. Do they have the skills and culture to complete what is required?
12. Should you recruit interim / specialist executive resources to drive parts of the turnaround?
13. Do management need to be incentivized in the turnaround?

14. Is it possible to trade out of the current financial position or is a transaction required to fix the situation?
15. What type of debt or equity transaction partner does the company need? For instance a trade buyer, company seeking vertical integration, private equity investor, mezzanine financier etc.
16. What does the company need to do identify and attract a new financier or investor?

17. How does the company improve the relationship with its existing financiers?
18. Are there issues that need to be communicated immediately to financiers such as a funding requirement or expected breach of facility covenants?

19. How have market conditions changed and does the turnaround strategy reflect these?
20. Does the turnaround strategy involve change or is the company committing to repeat the same mistakes?
21. Does the strategy align with the identified reasons for under-performance?
22. Have all options been considered in relation to growing revenue, cutting costs, expanding/contracting the business, product lines etc

23. Is the company making the hard decisions to achieve the turnaround?
24. Do we have a Plan B, C and D?
25. Does the company accept the reality of the current situation or is there denial in relation to the position and/or what is required to fix it?

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