We are getting close to listing our manufacturing business but the last two years have been rough. Our advisor suggested bringing in a turnaround consultant before we go to market. I don't really understand what they do in the first week. Do they just walk around and ask questions? What should I expect?
Turnaround
What does a turnaround consultant actually do during their first week?
First week is usually a lot of questions and very little action. They will want to see cash flow, AR aging, and your top customer list. Expect them to ask for things you don't have organized. That is part of the diagnostic.
They will also ask to talk to your key ppeople without you in the room. That can feel uncomfortable but it is normal.
Mine spent the first three days just reading financials and walking the floor. He did not give any recommendations until day five. Looking back that was a good sign. The ones who show up with a plan before they know your business are usually selling a template tbh.
Did yours want to meet with your management team immediately? I am worried about how that will land with people who have been here for years.
Yes, they will want one-on-ones with your managers. The good ones frame it as listening, not evaluating. But everyone knows why they are there.
One thing people don't mention is that the first week often includes a 13-week cash flow forecast. If they don't ask for one, ask why. It is the basic tool for understanding whether you have a liquidity problem or a profitability problem. Those require dif ferent fixes and different timelines.
That was the most useful thing ours did. The forecast showed we were actually fine on cash but bleeding on a product line nobody wanted to kill ngl.
They will want to know why you are selling. If they think the business is in worse shape than yoou are presenting, they will say so. Be ready for that conversation.
Ours asked for a list of every customer over 5 percent of revenue and what would happen if each one left. That was eye opening.
This is helpful. I think the part I am struggling with is how much access to give them in week one. Do they sign NDAs and then get full access to everything?
NDA, yes. But I would not hand over the whole drive on day one. Give them what they ask for as they ask for it. You will pearn a lot about how they work by watching what they prioritize.