Corporate Restructuring: Turnaround Consulting
Expert guidance in corporate restructuring and turnaround management
„Anything goes—as long as it works.“
Max Frisch
Swiss writer and architect (1911–1992)
Key Points at a Glance
Corporate restructuring is a structured process for guiding a company out of an economic crisis and avoiding the nightmare scenario of insolvency.
Our primary goal is always to ensure the company’s solvency. At the same time, we develop a viable restructuring plan that identifies the true causes of the company’s economic crisis and outlines specific measures designed to put the company back on a growth trajectory. A clear roadmap, consistent implementation of the defined measures, and transparent communication with employees, banks, and creditors are crucial to the success of the implementation.
Read moreWhat Does Corporate Restructuring Mean?
The complexity and dynamism of today’s business world make corporate management a constant challenge—and it is not uncommon for companies of all sizes to face existential crises for a wide variety of reasons; they operate at a loss, lose liquidity, and ultimately find themselves on the brink of bankruptcy proceedings.
Rescuing the company requires a fundamental turnaround: With expert guidance throughout the entire corporate turnaround process—from developing a turnaround plan with a going-concern forecast to implementing financial, strategic, and operational restructuring—it is possible to get back on a secure path and preserve your company in the long term, rather than having to file for creditor protection.
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These include
- management’s decision-making ability,
- a forward-looking strategic market orientation,
- optimization of the business model,
- the financing structure,
- the capacity for innovation,
- leadership that motivates the workforce to take an active role in shaping the company,
- restoring competitiveness through operational efficiency using appropriate technology,
- and building resilience through flexibility and adaptability.
A successful corporate turnaround encompasses all of the company’s operational functions, including management.
Most companies possess valuable capabilities that have been overlooked. We help you rediscover the essential capabilities hidden within your organization and leverage them to lead your company back to success.
As management consultants and/or interim managers with proven turnaround expertise, we work with your leadership team to develop a strategically and operationally sustainable turnaround plan and support you through to a successful turnaround.
Schedule a no-obligation consultation with our experts today!
Your Challenges – Common Causes of a Business Crisis
Many business owners turn to us when their companies are already under significant pressure.
Your challenges
- Are interest payments crushing your business?
- Is your company no longer competitive in global markets?
- Will upcoming regulatory changes make it impossible for your business to operate?
- Is your current business and revenue model no longer sustainable?
- Will the entry of new, aggressive competitors into the market severely damage your business in the foreseeable future?
- Are your customers moving toward producing in-house (insourcing) what they previously sourced from you?
- Are your capacities already underutilized, and do you urgently need more orders?
- Does your company depend on a few key customers?
- Are new and existing customers refusing to place orders because they do not believe your company will continue to operate?
- Is your company facing insolvency and in urgent need of additional funding?
- Is your company over-indebted according to its balance sheet?
Early Detection: How Does a Corporate Crisis Arise?
A crisis rarely arises suddenly. As a rule, warning signs can be detected early on.
Declining revenue, rising costs, or increasing dependence on a small number of customers are typical indicators of structural problems within the business. If action is taken too late, the situation can quickly escalate into a situation requiring restructuring.
Early analysis of these causes is therefore a crucial foundation for any corporate restructuring.
Securing Liquidity – The Most Important First Step in Corporate Restructuring
In the event of restructuring, the primary focus is on one goal: securing or restoring short-term solvency.
Without sufficient liquidity, the company faces the risk of insolvency in the short term, which would trigger the management’s obligation to file for bankruptcy. For this reason, initial measures typically focus on
- strict accounts receivable management
- negotiating longer payment terms with suppliers
- deferral agreements with creditors
- reducing inventory levels
- consistent cost-cutting
- short-time work, if necessary
- attempting to expand credit lines with commercial banks or at least secure them
- negotiating additional loans
- Capital injection from shareholders or through the sale of non-essential assets
Schedule a no-obligation consultation with our experts today!
Restructuring Plan: The Roadmap to Turnaround
However, securing short-term liquidity is not enough, because the root causes of the company’s financial crisis have not yet been addressed. A successful corporate restructuring requires a clearly structured restructuring plan as the foundation for all further measures.
A professional restructuring plan includes, among other things:
- A thorough analysis of the company’s current crisis stage
- A careful analysis of the true causes of the company’s economic crisis
- An assessment of the need for restructuring
Strategic Realignment: Business Model and Market
Sustainable corporate restructuring is not limited to short-term cost-cutting.
Strategic repositioning in the market is crucial.
- What market offerings are in demand today and in the future? What characteristics must our products and services possess to be perceived as attractive?
- Which additional customer segments should we target?
- What other applications can we offer with our capabilities?
- How do we skillfully position ourselves in the competitive environment using our strengths?
- Should we position ourselves as an innovation leader, a technology leader, a service leader, or a cost leader?
- Should we position ourselves in the specialty market or the commodity market?
- Should we position ourselves in the premium market or the low-budget market?
This realignment also includes reviewing and adapting our business model.
- How do we achieve customer lock-in?
- Do we offer one-time deals or subscriptions?
- What after-sales service do we provide to our customers?
- How do we engage existing customers with cross-selling and up-selling offers?
- Do we offer our customers attractive financing options?
- Which services do we provide ourselves, and which are provided by service partners integrated into our business model?
- What does our business process look like?
- A sustainable strategic direction and a corresponding attractive business model are the foundation for long-term competitiveness.
Operational Optimization and Increasing Productivity
In addition to strategic direction, operational performance plays a central role in the success of a company’s turnaround.
Through process optimization, better cost control, and more efficient organization, productivity and earnings can be significantly improved. Typical measures include:
- the sensible reduction of fixed costs, particularly in administration, through more efficient work methods, including the use of AI, the automation of workflows, and the elimination of non-value-adding activities
Corporate Restructuring with BlueMomentum Consulting – A Guided, Creative Process
Restructuring is innovation. We view corporate restructuring as a guided, creative process involving people in what appears to be a challenging economic environment. This creative process can result in a systematic search for a better path forward in a difficult environment; it can also lead to a way out of a difficult environment. In any case, the survival of the company is at stake.
Time is a critical factor in corporate restructuring: Successful restructuring requires a delicate balance between creative action and tangible results.
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Corporate Restructuring as an Opportunity
In an economy primarily focused on growth and short-term success, it is easy to lose sight of the core principle of stability. Many companies are heavily dependent on growth—and in this context, issues such as mindful management or even holistic thinking and leadership are quickly overlooked. Yet in our dynamic and complex world, these two aspects are of great importance for business success.
A crisis is always a turning point that can be leveraged not only to address immediate needs but also to drive lasting change. Companies that have undergone sustainable restructuring have not only weathered an economic crisis; they have also become more flexible and adaptable, enabling them to proactively ward off future signs of crisis from within.
When managed properly, corporate restructuring can serve as the starting point for a fundamental improvement in the organization.
Read moreSchedule a consultation on business restructuring today
If your business is facing financial difficulties, one thing matters above all else: swift and decisive action.
Take the first step: Contact us for a confidential consultation. Together, we will develop a realistic restructuring plan and quickly guide your business out of the crisis with tailored restructuring measures.
FAQ on Corporate Restructuring
What does corporate restructuring mean for a company?
Corporate restructuring means restoring an economically struggling company to stability and profitability within a reasonable timeframe. This involves combining financial, strategic, and operational restructuring measures. The initial goals are immediate survival, followed by the restoration of competitiveness and the long-term securing of the company’s existence. The restructured company must be able to reliably service its debt and generate a market-standard return.
How is the feasibility of restructuring determined?
Before restructuring begins, an assessment is made to determine whether a company is fundamentally capable of being restructured. This means that it can be put in a position, within a reasonable timeframe, to reliably service its debt and generate market-standard returns. Only when the prerequisite of feasibility is met is a comprehensive restructuring process worthwhile, as it also involves significant effort.
What distinguishes pre-insolvency corporate restructuring from restructuring through insolvency proceedings?
Many companies in need of restructuring have the potential to be restructured without resorting to insolvency proceedings.
If insolvency proceedings are unavoidable for a company in need of restructuring, it can also be restructured within the framework of those proceedings. In insolvency proceedings, creditors decide whether to release the company from certain liabilities. In standard insolvency proceedings, however, the shareholders relinquish their rights to their shares and, with them, their decision-making authority over the company to a court-appointed insolvency administrator. This is not the case in self-administered insolvency proceedings. The shareholders retain their ownership interests, and decisions continue to be made by the company’s management. A court-appointed administrator ensures that the company is managed in accordance with insolvency law. The goal of initiated insolvency proceedings is to rescue the company and thereby prevent its breakup.
What does corporate restructuring mean for us?
The throwaway mentality prevails not only in consumer behavior; it is also widespread in management. Truly sustainable restructuring is now a rare occurrence. When people talk about restructuring, the measures are often limited essentially to the liabilities side of the balance sheet. The effective levers for strategic and operational restructuring remain unused, perhaps even unrecognized.
Identifying a coordinated set of appropriate levers with which companies can be restructured within a reasonable timeframe—and then actually activating those levers—requires a keen eye, experience with system-appropriate change processes, and a willingness to invest a high degree of personal energy and leadership.
How is a company’s viability for restructuring determined?
Once it has been determined that a company is in need of restructuring, the next step is to decide whether the company is fundamentally viable for restructuring. The designation of viability certifies that the company can be brought to generate industry-standard returns within a reasonable timeframe and will be able to regularly meet all agreed-upon debt service obligations.
Even if a company is viable, this does not automatically mean that the restructuring itself will be approved. At that point, commercial banks, shareholders, and other investors must decide whether the effort involved in the restructuring is worth it and whether they are willing to take on the risk associated with restructuring financing. They must decide on the company’s eligibility for restructuring.
What is key to corporate turnaround?
Companies in need of turnaround are not generating adequate returns and are at risk of failure. However, these are merely the visible consequences of these organizations having lost the capabilities required for stable and lean learning processes. Turnaround means regaining these capabilities and putting them to use. Restructuring means rapidly enabling the organization to rediscover what is essential and sustainably returning it to strategic entrepreneurship and operational excellence.
In corporate restructuring during an acute economic crisis, the key is to immediately eliminate cash drains and quickly secure fresh capital through appropriate internal and external financing measures to restore solvency. Anything that contributes to this must be implemented swiftly. Unconventional steps must also be taken. Contracts must be scrutinized and payment commitments renegotiated. The only thing that matters is results.
When should a company seek outside help?
As soon as the first signs of an economic crisis become apparent, business owners should seek outside expertise. Companies generally do not have in-house expertise in restructuring. The success of a restructuring effort is highly time-sensitive. The sooner a professional restructuring process begins, the more opportunities there are to successfully guide the company out of its economic crisis.
Success comes from expertise and trusting collaboration.
