Q. I’m bidding to acquire the company I worked for before leaving to run my own IT services business. The company I plan to buy is in big trouble but I think it’s a case of poor management and underinvestment. I’m preparing myself for the worst though and considering every conceivable angle before I take over. What’s the secret of a successful turnaround?
 
Giles Redpath of Euphony writes:

For a start, not every business can be turned around – some are failing for a very good reason. The secret of a successful turnaround is in buying the right company in the first place. I suppose it’s the difference between wandering aimlessly around the shops seeing what takes your fancy and starting out with a shopping list. I start with a vision of the sort of business I want to create and then build a shopping list of the attributes such a business will need to make the grade. I would then tend to buy the business that ticked most of the items on my list so that I had to change as little as possible post-acquisition.

Successful businesses have a clear vision of where they are going. If you know where you’re going then it becomes easier to assess what resources you will need to get you there. The other crucial elements are time and scale. How many times have you got lost on a map because you misjudged the scale of the map, and how many good business ideas have failed only to see someone else succeed with the same idea a few years later?

At Euphony our vision is to become the world’s leading distributor of home technology products through independent consultants. A vision tells you where you’re going but you need a map to figure out how to get there and a clock to work out the time it’s going to take. Every vision needs breaking down into a series of short journeys. A focused, efficient business employs resources and energy only on getting to the next juncture.

Start by writing a plan for your IT company that summarises what you want to achieve in each quarter after acquisition. This plan might for example identify the revenues, margins, overheads and brand aspirations you have for that period. Strip out everything that is superfluous to this plan. Concentrate on nothing else – this is essential. If you’re asked for a meeting or for some resource and it isn’t on the plan, don’t do it!

Once you have your plan, surround yourself with a good team of people you enjoy working with and try to keep a sense of humour. Good Luck!