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How can TMP help?
How can TMP help in our troubled and turbulent times? We are currently being asked this a lot and although it sometimes seems obvious to say we go back to basics.
You have to assume that, if not already, there is a reduction in turnover. If it has not already happened it may just be you are one of the few businesses (such as domestic cleaning product businesses) that are seeing a rise in profits.
If we expect a downturn in turnover we need to assume that the rest of the business may require downsizing to cater for reduced demands. This requires independent and detached thought as you need to consider operational costs, management and plans, staffing and other logistics. A bridging statement is essential in this process. This is effectively a cost strategy guide depicting how to bridge from current cost status to cost efficiency. Finally, you require the toughness to implement the decisions made and to align the business interests correctly.
Experience in this process reaps benefits and this is where we find ourselves helping clients.
Turnaround Finance, (investing in distressed businesses) is another of our prime activities. We find our clients are primarily looking for two things. The first is cash for their own business to get it into shape and that combined with our corporate restructuring experience is invaluable but secondly clients are looking for hand holding and or cash to make investments or acquire other businesses. Those businesses, for example are those that haven't moved quickly enough to get themselves into shape.
Business values have radically eroded in recent times and having your own business on a strong financial platform, allows you to use new money invested (through our turnaround investment fund, or partners) to buy over complimentary businesses. Clients benefit from the vertical effect of restructuring, improved stability, economy of scale and the ability, if well managed, to generate long term value and good returns.
With a small amount of cash invested, restructuring the balance sheet, (informally or through a formal insolvency process so as to not harm the business) operationally downsizing (a viable bridge for maximum cost efficiency); what better way is there is in today's gloomy climate to benefit and build long term wealth?
Of course, all this sounds so simple and in principle it is. The reality however is that many of our clients are investment hungry either to survive or make acquisitions. They have learnt the lesson previously that it is the bold and unwise who step into the restructuring world without an army of experience behind them. At TMP we have over 16 years of restructuring experience and over 13 years of distressed business investments under our belt. That wealth of experience cannot be replaced with flash cash which is a recipe for disaster.