Restructuring can take many forms but the key issues are usually:
- The financial structure is unsound, either as a result of losses or lack of funding; and/or
- The business is not profitable
If the financial structure is weak, the balance sheet will most likely need restructuring and additional capital for the business to have a chance of succeeding.
If the operations are not profitable, the business needs to be carefully analyzed to assess the source of the problem. Businesses that were previously profitable may be suffering from management issues or changes in industry structure. We have converted many losing businesses from manufacturers into successful distributors of subcontracted products.