How can you move forward when your company's cashflow is tight and profit is on a downward trend? Employing business turnaround and restructuring is one way that many Australian businesses have moved forward from significant financial difficulty. With nearly 10,000 companies entering external administration in the 2015-2016 financial year (based on ASIC data), there are many organisations that could benefit from such measures.

Turnaround and restructuring isn't just a way to escape liquidation – it can be the first step to a healthy and successful business. Here are three examples of household names that have done just that.

1) Billabong

In 2012, Billabong posted an $860 million loss. Rather than shut up shop, it implemented a seven-year turnaround strategy, which has already reaped results. It began posting a profit in 2015 – while only $4.2 million, it is a considerable reversal of fortunes.

As Business Insider reports, even a half-year loss in 2016 hasn't particularly impeded their restructuring.

2) Myer

Sometimes a turnaround means refocusing your core offerings. For department store chain Myer, this meant promoting labels like Topshop and Industrie, while cutting loose more than 100 other brands.

The gambit was successful, with AAP reporting in September that full-year profits for Myer had doubled to approximately $60.5 million. after successfully implementing restructuring and turnaround measures your business  might not look or operate the same as before. Your operations will run more efficiently and and your business will be more likely to survive and thrive.

3) Qantas

Here's one you are probably familiar with. At the very least, you will have heard all about the calls for Alan Joyce to be sacked after grounding the entire fleet in 2011 as a response to union disputes. Follow that with a $2.8 billion loss in 2014, and you wonder how the company turns it around.

Qantas is flying high through a turnaround and restructuring.Qantas is flying high through a turnaround and restructuring.

In 2016, Qantas posted a full year underlying profit of $1.53 billion. This is an example of a turnaround occurring from smart internal measures and also thanks in part to external factors. The price of oil and the Australian dollar are both attributed with responsibility for the turnaround, while ICAS reports that Qantas made smart hedges to ensure fuel would remain cheap. The reconfiguration of the A330 planes for wider use will also have improved profitability.

It was a wholesale turnaround program that saw Qantas win many awards, showcasing that even with incredibly large debts, things can be restructured into success.

Avoiding corporate insolvency isn't a simple process. Sacrifices have to be made and you must be proactive in seeking out advice on what to do. As you can see from our examples, even deficits in the billions can be restructured into success. At Cactus Consulting our pre-insolvency advisors can give you advice and lay out a plan to restructure your company in a way that could see it thrive like these big businesses.

Posted on 14-02-17 in Corporate finance insights and updates.