Turnarounds – typically where a company is fast running out of cash or in profit decline.
A number of cost reduction techniques may be required e.g. headcount reduction and rationalisation
better more effective systems, other overhead reduction, cash control and refinancing.
Cash Shortage – here a company is heading toward a breakdown in its relationship with its bank.
It needs skills to tackle the direct problem and to recreate a level of credibility with the bankers.
Organic Growth (rapid) – growth can cause a number of stresses (especially if the growth is rapid).
There are several potential needs e.g. financial planning and raising finance, upgraded or replacement
of systems and controls, more professional approach to marketing, a revamp of its logistics,
implementation of budgetary and forecasting discipline.
Organic Growth (sustained) – this places less stress on a companies resources but means that,
at points in time, it will demand a higher skill level from its executives.
These step changes can be closely and so buying the skill level on a part time
basis can be more cost effective.
Introduction of a new investor – if for example a company has raised institutional finance,
the demands in cash reporting, monthly reporting, budgeting and forecasting may suddenly increase beyond
the level of the current FD and require continual part time help.
Acquisitions – a company acquiring for the first time will require an investment proposal,
help with financing, help through the process, a smooth integration post acquisition and
continual appraisal to assess whether the acquisition achieved the objectives set at the outset.
Disposals – the company will need to be “packaged for sale” and robust plans prepared.
If the disposal is partial, it may leave a need to restructure to shrink the overhead
down to match its reduced size.
MBO’s & MBI’s – clearly there is a need in terms of reporting, cash management,
budgeting and forecasting. In addition, the MBO needs a person to help the investor
managers develop the shareholder value approach to their management decisions.