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Every business market has its ups and downs. It’s the other side of the coin that has always been half of the risk when building and running a business. The GCC has been a growing business hub yet, at the same time, we have seen businesses rising, succeeding, stagnating, and failing. The competitive market can be a reason, for one. But usually it involves not enough profit, financial mismanagement, debts and payrolls.

Companies experiencing difficulties are put in a critical position of pressure to recover to avoid reaching a point of no return and let a business spiral downwards.

Here are strategic decisions that are commonly used by businesses in their recovery plan.

  1. Positive Variable Contribution

It means that what you are getting from the company’s offered product or service exceeds its costs. An analysis will reveal which among the products or services are bringing you margin and which ones do not.

Those that are negative can be priced higher or adjust the offer. You ought to find ways to make the offering profitable.

  1. Cost-cutting

Although this is easy to realize, it helps to re-emphasize the importance of reducing costs. Assess the financial expenses and cut off the discretionary spending. Unfortunately, it may involve letting people go or reducing their hours and wage. This is particularly tough but a must in exchange of helping the business survive.

  1. Prioritizing Payables

You have more things to pay than what you have in hand. It is extremely important to know the priorities to pay so you stay in business and get a chance to recover. This should include the component that generates business – employees, suppliers, operation location. Avoid missing obligations that bear more problems such as tax fines.

  1. Cashflow Management

Following the cost-cutting and prioritizing payables, the company assess receivables and build a cashflow plan. This will lay out how much is coming in and out monthly and allocating properly to make sure that the operations are still rolling. This will help the managers accurately plan how to keep up with the income and outcome, and definitely helps them stay afloat.

These are tough steps but when a business is on this critical state. It is highly necessary to act quick and fix every loophole possible. Before reaching a point of return, companies should implement change while they can. In critical situations like this, it is important to reach out for the help of experts and experienced strategists and advisors. SDAC Consulting has been helping businesses in the UAE get back on track for almost 10 years. The firm is comprised of highly experiences advisors who are experts in Strategic Management.

Are any of these recovery strategies applicable to your corporation?

Find out with the help on an expert. Get an assessment of your business. You can talk to us for an initial consultancy by heading to this link (https://bit.ly/2N5uvCT) or email us at commercial@sdacconsulting.com.


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