Many businesses go through restructuring at some point in time. Businesses usually restructure to modify their capital structure or operations significantly.
A successful business restructuring is an intensive and complicated endeavour, best served by accurately estimating the company’s overall value or the value of the individual parts.
Business Restructure- Explained
A business restructuring is a process of reorganising or modifying the financial or operational aspects to reduce debt, increase efficiency and improve the business in the future. Businesses take this step to ensure the seamless running of the business. The failure of a business can be due to financial reasons or macro and micro-economic factors that entirely change how a company operates. Political issues like Brexit or global pandemics like the COVID-19 crisis can be taken as real examples.
Other common causes for restructuring are:
- Reduce/consolidate debt
- Merge with another business
- Reduce company costs
- Rearrange roles within the company
- Reducing size through the sale of assets
Depending on the severity of the situation, a business can either opt for an informal restructure (outside the court system) or formally through one of the various legal corporate restructuring strategies.
Why is Business Restructuring Important?
Business restructuring is essential for several reasons.
Adapt to changing circumstances
By opting for business restructuring, companies can adapt to changing market conditions, such as increased competition or changes in consumer preferences. It helps companies become more efficient, reduce costs and improve their profitability.
Improving financial performance
Business restructure can help companies reduce debt levels and improve cash flow and credit ratings. This is usually achieved by streamlining operations, consolidating business units, clearing non-core assets, or restructuring debt.
Enhancing organisational effectiveness
By restructuring their business, companies can improve their organisational structure, decision-making processes, and overall efficiency. In fact, they can become more responsive to changing market conditions by eliminating monotonies, simplifying operations, and improving communication.
Zimsen Partners can help with Business Restructuring
Zimsen Partners Pty Ltd can assist businesses with restructuring needs by providing tailored solutions aligning with their goals and objectives. Our experienced team can assess the current business structure and identify areas that require improvement or modification. We can also assist with financial modelling, restructuring plans and implementing strategies to improve profitability and operational efficiency. Rest assured, our years of expertise in tax planning and compliance can help ensure that the restructuring process is executed in a tax-efficient manner.
Contact our team today at 03 7065 5555 to learn more about our business restructuring services.