Axiom is often asked to facilitate management and company turnarounds and to return struggling companies to solvency.
In our role as consultant as well as in our role as an investor, we often take on the daunting task of facilitating a company “turnaround” to restore an organization or business unit back to fiscal health and operational efficiency. In this capacity, members of the Axiom team act as an outside Chief Financial Officer (CFO) in order to establish a sound strategic plan with strict financial oversight to return the company to operational and financial normalcy.
Axiom is often brought in by company management or by banks, lenders, or private equity firms with investments in distressed companies. Axiom is able to work with company management to identify the root of a company’s problem and develop a plan to return the company to solvency. It cannot be stressed enough that time is of the essence: the sooner a board or company officer realizes that there is a need for financial advisory regarding a possible turnaround, the more likely that company will experience a successful recovery. The typical turnaround engagement consists of the following steps:
- Initiate the engagement – determine and quantify the expected goals of the board / corporate officers / lenders.
- Analyze the situation – perform due-diligence regarding the company, its operations, its financials, and its management.
- Implement a plan and act – time is critical and the sooner the plan is approved and put into action, the better.
- Restructure and stabilize – this is an important step in determining the appropriate capital structure for the company moving forward.
- Set a course for the future – every company or organization has to adapt to the changes in the market, but having a map for the future is important to learn.