Delivering Measurable Results

K. A. Lindow, CPA, P.C. CPA Firm, Phoenix, AZ.

Z Biz Fix

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Z Biz Fix: Business Turnaround

The purpose of Z Biz Fix: Business Turnaround is to take a business that is either in a pre-bankruptcy state or not doing very well and restructure that business so that it can be put back in a healthy financial condition and literally set up to grow and become financially successful in the future.

This is achieved through a verified utilization of a formula developed by Prof. Edward Altman in 1968. It was verified through various studies to measure its effectiveness to have shown that it was between 82% to 85% reliable as an indicator of bankruptcy. Thus, using the same formula to change the various components that would take a business farther and farther away from a bankruptcy and bring it back to financial health is what this Z Biz Fix: Business Turnaround process is all about.

By taking the following components of a business’s financial statement and either increasing them or decreasing them respectively, will enhance the overall health of a business. The following components of a business/financial statement should be changed accordingly:

Working Capital – Increase

Retained Earnings – Increase

Equity – Increase

Sales – Increase

Profits – Increase

Total Assets – Decrease

Total Debt – Decrease

The manipulation of the above components encompasses reworking the entire business to create a structurally financially healthy entity and one that produces profits on a consistent basis.

Below are a few the ways that should be considered to either increase the respective component or to decrease it:

Working Capital

1) Earning profits

2) Issuing common stock or preferred stock for cash

3) Replacing short-term debt with long-term debt

4) Selling long-term assets for cash

5) Settling short-term debts for less than the stated amounts

6) Collecting more of the accounts receivables than was anticipated and then reducing the balance required in the current asset account Allowance for Doubtful Accounts

Retained Earnings

1) Earning profits

2) Reinvest earnings back into the business

3) Reducing costs

4) Reducing dividends and owner payouts

Equity

1) Reduce employee costs

2) Reduce operating costs

3) Increase shareholder capital

4) Reducing manufacturing or service production costs

5) Closing an office will reduced space utilized by the business and costs

Sales

1) Talk to your current customers for ideas

2) Bundle your products and services as a package

3) Ask current customers for referrals

4) Have a limited-time sale or promotion - discounting services or products

5) Listen for ideas from current and potential customers

6) Use social media to your advantage such as obtaining a following on twitter or Facebook

7) Raise your prices – don’t do it quickly

8) Increase the marketing effort and product or service exposure

Profits

1) Figure out your gross profit margin

2) Analyze your profit margins – how can it be improved?

3) Increase your prices

4) Review all your prices

5) Do not offer discounts

6) Don't compete on price

7) Take all cash discounts from suppliers

8) Prevent theft

9) Watch supplier bills

10) Using an inventory control system to reduce the amount of inventory held

11) Increase the marketing effort and product or service exposure

Total Assets

1) Sell excess property and equipment

2) Lease property and equipment

3) Outsource operations

Total Debt

1) Increasing sales revenues and profitability

2) Raising prices and use to reduce debt

3) Increasing sales or reducing costs

4) Contribute additional capital to paydown debt

5) Reduce inventory to use funds to pay down debt

Remember, this system gives you your business report card every month/year and shows you exactly the areas that need to be focused on to improve the business operation month after month. It virtually guarantees you the ability to continually improve your business operation every month and focus in on those areas that need to have attention. This system when linked with the Turbo Growth Management program that was used to grow a top Inc. 500 company by 1985% over three years and achieved the rank on the Inc. 500 list of 119/500.

The reason I developed a system was to give management a tool that they could focus their efforts into specific areas of the business that need to be improved, thus not waist time and money in unneeded areas of the business. This focused approach will help management make improvements in the shortest possible time, utilizing the least amount of resources.

This process when rigorously applied can produce dramatic improvements over a very short time for any business operation. The key is, to have the entire management team solidly committed to the business operation improvements and to having this focused approach at improving those areas that are underperforming and are critical to business success and Z Biz Fix: Business Turnaround.

This focused approach is very economical to use, in that it literally only takes five minutes a month produce the scorecard for the prior month once the financial statements for that prior month have been completed.

When the scorecard is produced it will instantly give management a score for the month and pinpoint the specific areas that the management team needs to focus on to improve results and the score for next month. The system produces a very economical way to utilize business resources to create the most results as fast as possible. It enabled the company management to have a focus on the goals, problems, and achieve the desired results for the business. The system creates desired results fast, GUARANTEED.

The system has capability of being custom tailored to your particular business or industry so as to produce the most focused measurements and improvements possible.


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