Business Recovery Plans
Business recovery plans are sometimes required, as business operations in an economic environment are exposed to fluctuations, sometimes even extreme ones. An economic crisis, whether local or global, can severely impact businesses, potentially leading to a real threat to their continued existence as a going concern. At times, companies and/or businesses need to implement a process called business recovery plans, during which the organization or business must undertake cost-cutting measures in areas such as workforce and other expenses. Additionally, it may be necessary to sell off fixed assets or real estate. On the other hand, such plans also focus on increasing revenues and expanding the customer base or order backlog. The main goal of these actions is to ensure the long-term survival of the business.
Poor business management will often lead to similar outcomes as an economic crisis. A business that incurs ongoing losses without taking timely action to plan a recovery and efficiency program is unlikely to survive in the long run. Typically, without owner capital, the banking system will lose confidence in such a business, potentially leading to insolvency.
It is important to note that in some cases, after reviewing the data, we may conclude that the business is not economically viable. In such a scenario, we will consider various alternatives with the business managers, including the possibility of a liquidation plan. This plan will take into account risk minimization for the owner, maximizing asset realization, arranging favorable agreements with creditors, and so forth.
At Michael Weitzman & Co. – Advisors and CPAs, we have extensive experience and proven success in preparing recovery plans for struggling companies and businesses and providing professional support throughout their implementation, including rebuilding the business’s credibility with the banking system.
Often, during the preparation of a recovery plan, a detailed business plan is required to assist in the recovery process. For more information available on our firm’s website, detailing the main topics to consider when preparing a business plan, refer to the published article. For your convenience, here is the link to the article: Business Plan.
An accountant from our firm will be happy to assist you with this service. Feel free to contact us without obligation.
