Serious external influences such as increases in the prices of goods and services, problems in the supply chains or in the security of supply of important raw materials can bring companies into critical and possibly existence-threatening situations. Very often, but by no means always, these external influences expose the company’s existing internal problems. Most corporate crises arise due to management mistakes. According to studies, lack of controlling, lack of corporate planning, financing gaps, insufficient equity, too high an interest burden, insufficient provisions, inadequate accounts receivable management, management errors, an outdated product range and incorrect production planning are among the most common reasons for insolvency. Here, negative external influences have a broad attack surface.
In order to avoid the occurrence of corporate crises or at least to limit their impact, you need to have a clear view of all facts and figures.
Integrated corporate management includes the necessary analyses of deviations between actual results and planned results. Here, it is necessary to put them in the right context and to self-critically scrutinize the essential issues. You as managing director and shareholder as well as your management team must be able to recognize and accept crisis symptoms at an early stage. Your risk management helps you to identify potential causes of crises in good time, and to reduce their impact.
If you recognize signs of crisis in your company, the planning and organization of a corporate restructuring is of paramount importance. By reorganization we mean any measure to avert lasting negative developments on a company, the continuation of which can lead to a threat to the company’s existence.