Restructuring is a crucial step for any business that is looking to grow and evolve. In the modern world, industries and landscapes are always changing, and unless you have set up the perfect structure from the very beginning, you will likely need to restructure your business at some stage. Today we are going to run through when and why you need to restructure and how to restructure your business for growth.
If you want to understand how to restructure a small business, you are in the right place. Our team at Taggart & Partners is here to provide you with expert corporate structure advice. Reach out today via our online contact form, by calling 07 3391 1188, or email us at enquiries@taggartandpartners.com.au.
When and Why to Restructure Your Business
Before you begin asking how to restructure a small business, you first have to know why you might do it in the first place. Maybe your business is outgrowing its current structure, or perhaps the goalposts have moved. Knowing why to restructure your business will help you know when it’s the right time to do so.
Business Growth and Expansion
As your business grows, the structure you have may become inefficient. This is especially common if you are experiencing rapid growth, are hiring more employees more frequently, or are entering into new markets. A new structure can help to streamline your operations for better long-term decision making and business success.
Improving Operational Efficiency
When you have a poorly designed business structure, you may run into inefficiencies, redundant processes, or communication breakdowns. Restructuring can help create a better workflow by redefining roles and addressing these inefficiencies head on.
Following Market Changes
No matter what industry you work in, it will constantly be evolving. To stay competitive, it is important to be able to adapt. If you are struggling to keep up with changing trends, a structural change may be helpful to stay responsive to market demands.
Financial Challenges
A restructuring can be useful when you need to protect assets, address financial challenges, or improve your cashflow. If your business is currently experiencing financial strain, restructuring can help by optimising resources and creating an easier to maintain model.
Regulatory Changes
The business landscape often experiences new regulations or tax law changes that can easily impact a weak business structure. To ensure compliance, your business may require structural changes, both to align with legal requirements and to take advantage of tax benefits.
How to Restructure a Small Business
Equipped with the why and when, we will now explore how to restructure your business for growth.
Assess the Current Structure
As a starting point for any restructuring, you will need to identify exactly what isn’t working in your business. Look for inefficiencies and pain points within your current structure, then evaluate how and if your current structure supports your long-term goals and business needs.
Engage With Key Stakeholders
Restructuring will impact all key stakeholders, such as employees, investors, and customers. You will want to engage with all these stakeholders with transparent communication to ensure a smooth transition and to minimise any resistance.
Define Your New Structure
Having identified any current issues, you can now identify the most effective structure for your business based on your goals. This may involve reorganising entire departments, redefining key roles, or transitioning the business entirely. One of the biggest leaps we see businesses take is from a sole trader structure to a company structure.
Consider the Implications
While restructuring does come with some great benefits, it’s important to understand the legal and financial implications involved. These will be different for each business and the best way to understand your unique situation is to seek corporate structure advice from the professionals at Taggart & Partners.
Restructure Gradually
By using a phased approach to make your structural changes, you reduce the likelihood of disruption to your business. This gives your employees and processes time to adjust gradually. Setting milestones and monitoring changes will make for a smoother restructuring.
Keep Open Communication
Making sure everyone in your organisation is on the same page is crucial for any successful restructuring. You will need to clearly outline the reason for restructuring and provide any necessary training for employees. This will help them adapt to their new roles and responsibilities.
What Are the Key Benefits of Restructuring?
Restructuring, when done right, will be amazing for your business. The benefits include:
- Increased efficiency
- Better financial management
- A greater understanding of the market
- Unlocking future growth – just to name a few.
Restructure Today with the Help of Taggart & Partners
Now that you know when, why, and how to restructure your business, the last step is to do it. With the help of a SME accountant from Taggart & Partners, we identify the need and benefits of a restructure of your business. Don’t wait; get started today. Reach out to us via our online contact form, by calling 07 3391 1188, or email us at enquiries@taggartandpartners.com.au.