Business Viability Review

For a commercial enterprise surviving financial difficulty is a careful step-by-step process best approached by consulting with experienced advisors.

ibv have dealt with many businesses in difficulty, and are able to provide advice on the best approach to a particular situation.

A business viability review entails working with the owners of the business, assessing the present financial position of the business and its short to medium term viability by reference to profit & loss and cash flow forecasts which may be prepared upon several different scenarios. The review is carried out objectively and we have found from experience that owners often find the process useful for it gives them the opportunity to consider:

• What needs to be done in the immediate short term to maximise survival prospects.
• Review and discuss their strategies for the future.
• Critical assessment of management’s business plan
• Management /personnel issues and succession plans
• Products
• Capital equipment investment
• Sales and marketing plans  
• Cost reduction
• Working capital improvement - credit management, stock control
• Funding requirement and cash flow management
• Action plan - the who, when and what
• Key performance indicators to measure success
• Background of the company’s operations
• Detailed review of historic trading results, balance sheet and cash flows
• Likelihood of forecasts being achieved (including a sensitivity analysis)
• Assessment of accounting policies, financial systems and controls
• Assessment of appropriate debt structure and bank security issues
• Key recommendations to the company on strategic direction and methods to improve cash generation and profitability
  

When the business viability review is completed, discussions will be held with management to consider the options and best way forwards for the business. Depending on the outcome of the review, turnaround management may be required to ensure the company returns to profitability and is a viable business going forwards.

If it is considered that the business is not viable in its current format, insolvency options may have to be considered.