What Is The Expected Timeline For The Restructuring Process?


“How long is the restructuring process?” The short answer is between several months and years. The more accurate answer is – it depends.

If you are looking for a quick bandaid solution, restructuring may not be the answer.

Restructuring is a lengthy process to ensure the longevity of the business. You can change a few things to keep your head above water, but the cracks seen previously reappear without an all-encompassing solution.

Management plans, project schedules and long-term problem-solving will influence the timeline. The roles and responsibilities of key stakeholders are critical to project timelines.

You will need excellent communication skills and manage business operations to prevent scope creep. Project management software may also be an asset to ensure restructuring is streamlined across all products and services.

In the first phase, the restructuring practitioner is focused on rescuing the business from the core issues that have led to the current state of affairs. They must identify the problems and implement solutions to restore profitability. In the worst case, it’s more about maximising value for creditors and shareholders to reduce debt.

This takes time. One must dissect the operations and processes to diagnose leaks and then utilise strategic planning to develop solutions.

The next phase is concentrated on recovery and implementing the proposed solutions to revitalise the business. This process can have a smooth transition if phase one is done well. However, many external factors impact this process.

Read more about the restructuring process in our free Guide To Restructuring Your Business.

Restructuring a business is a complex process that can vary widely in time. Explore the factors that impact HOW LONG the restructuring will take below.

Factors Affecting Business Restructuring

1. Scope and Complexity

The size and complexity of the restructuring plan play a significant role. A simple change in a department’s reporting structure might take less time than a complete overhaul of the organisation’s business model or the merger of two companies.

2. Size of the Organisation

The larger the organisation, the more time it takes to implement changes. There are more layers of management, more employees to communicate with, and more systems to integrate.

3. Financial Health

The financial health of the company can affect the pace of restructuring. If a company is in a dire financial situation, there may be a sense of urgency to implement changes quickly.

4. Legal and Regulatory Compliance

Ensuring that the restructuring plan complies with legal and regulatory requirements is critical. Dealing with these aspects can add to the timeline, especially if government approvals, permits, or legal disputes are involved.

5. Employee Engagement and Resistance

Employees are crucial in any business, and their engagement and reaction to the restructuring can impact the process. High levels of resistance or low morale may slow down implementation.

6. Leadership and Management

Competent and experienced leadership can expedite the restructuring process. The quality of decision-making and project management skills within the organisation can significantly affect the timeline.

7. Technology and Systems

If the restructuring involves changes to the organisation’s technology infrastructure or systems, this can extend the timeline. Implementing new software or IT infrastructure can be time-consuming.

8. Communication and Change Management

Effective communication with employees and stakeholders is essential. A well-planned change management strategy can help in minimising disruptions and resistance.

9. Resource Availability

The availability of resources, including funds, skilled personnel, and external consultants, can impact the pace of restructuring. Resource shortages can slow down progress.

10. Stakeholder Involvement

The involvement of various stakeholders, such as investors, creditors, and customers, can impact the timeline. Their approval or cooperation may be required for certain aspects of the restructuring.

11. Market Conditions

External factors like market conditions, economic trends, and competition can influence the timeline. For example, a company may need to restructure quickly to stay competitive in a rapidly changing market.

12. Cultural and Organisational Factors

The existing organisational culture and structure can affect the speed of restructuring. Ingrained cultures or resistance to change can slow down the process.

13. Project Planning and Execution

The quality of the project planning and execution plays a vital role. Delays can occur if the project is not well-structured or if there are frequent changes to the plan.

14. Available Tools and Technology

Using appropriate tools and technology for project management and implementation can make the process more efficient. Conversely, a lack of suitable tools can slow things down.

15. External Dependencies

If the restructuring plan relies on external partners, suppliers, or other entities, the timeline may be affected by their availability and cooperation.

How Long Will Restructuring My Business Take?

In summary, the time it takes to restructure a business depends on various interrelated factors. It’s essential to plan and manage the process carefully. Consider these factors to ensure a successful and timely restructuring.

Facing financial difficulties can be incredibly stressful and overwhelming. However, restructuring your business can offer a more positive and sustainable solution than insolvency.

A business owner can maintain control, improve cash flow, retain current employees and restore the business’s reputation. Working with advisors to reorganise your company’s operations, structure, management, and finances can reduce costs, increase efficiency, and restore profitability.

Working closely with specialist restructuring advisors is vital if facing financial difficulties. This will allow you to understand the options available to you.

If you want to discuss your circumstances with a restructuring expert, contact us at coffs@cloutadvisory.com.au or (02) 6650 5888.

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