Consulting in Social Economy
Due to the cost pressure in all areas of the social economy and in all services according to the German Social Code, the providers are increasingly forced from the outside to design the social work and the administration behind it as effectively and efficiently as possible. Such a design always has to take into account the social work of the employees on site and the professional, people-oriented advice, support and care for the clients. Our goal is always to incorporate both aspects and find a balance.
Due to the cost pressure in all areas of the social economy and for all services in accordance with the Social Security Code, the institutions are increasingly forced from outside to make social work and the administration behind it as effective and efficient as possible. Such a design always has to take into account the social work of the employees on site and the professional, people-oriented advice, support and care for the clients. Our goal is always to include both aspects and to find a balance.
The first step of the consultation often means first of all getting clarity in the figures and evaluations of the accounting. It is necessary in order to put all further steps of the consultation on a solid basis. In our experience, EDP often plays an important role in changes to structures and processes. The path from the “analogue to the digital age” means that workflows have to be simplified or not duplicated.
Using benchmarks from our more than ten years of extensive experience, we can define a target structure together with our client and accompany the implementation. In the facilities and advice centers, we analyze the economic viability on the basis of important key figures such as the occupancy rate or the classification management of the residents in care facilities or dormitories for the disabled. In the inpatient facilities, we examine the design of the duty roster and advise and support you in redesigning the duty roster.
This applies until the negotiation with the employee representatives. In the workshops for people with disabilities, the focus is on the calculation of basic and flat-rate fees, as well as the composition of the production groups and the processes, from acquisition and work preparation to creation and delivery to customers. The aim of all of our engagements is to create a sustainable economic basis and thus to ensure the best possible work for the clients and those being cared for.
The development of the last few decades in the social economy has led to the organizational structures being expanded or adapted to current needs. With the development, the self-image of the wearer has also changed. This often leads to different ideas and cultures being fostered in one institution, which prevent sustainable further development.
In organizational consulting, the focus is on the structures, processes and the self-image of an institution. Consulting usually begins with the structures and processes being analyzed. In a second step, objectives are discussed and defined in workshops with the client. In this process, the various bodies of the executing agencies are involved with their specific interests. Only in this way can a successful basis for the definition of measures and their implementation be defined. The then changed processes can then be fixed for all those involved using an organization manual. Of course, they are to be adapted to further developments.
As a rule, the social economy providers of a certain size have extensive fixed assets. This applies in particular to those who use stationary facilities. The renovation of existing buildings or the construction of such facilities requires – despite external planning services and construction management – considerable capacities on the part of the client. Above all, building means making a large number of decisions with different scope.
We have accompanied various construction measures by sponsors and have taken over the intersection between external planners or site managers and the management of the sponsors. These services range from planning discussions to the completion of the construction project and, if required, to the creation of a report on the use of funds. In between, the decisions for a construction project are discussed with the planners and site managers and prepared until they are ready for decision-making or decisions are made directly on site.
This applies to both the planning phase and the construction phase itself through to the organization of the commissioning of a building. The constant support as well as the experience from accompanying various construction projects have meant that both the costs and the schedule for our projects could be kept within reasonable limits.
Our experience shows that our clients usually have an idea or at least an idea of what needs to change. Sometimes there are different interests within the organization that prevent change or there is a lack of knowledge or experience as to how a more profound structural and economic realignment can be carried out.
The implementation support starts with a brief analysis of the situation or the joint definition of measures. Afterwards, areas of responsibility and the procedure are coordinated. As a result, we jointly implement the measures. This ranges from negotiations with employee representatives to negotiations with contractual partners. If the conditions are right, we also take on organizational responsibility for a certain period of time – as managing director as well as administrative manager or commercial manager.
As in all of our projects, open communication and transparency are the basis and goal of our actions. Only in this way can the process of change, which is often experienced as painful or frightening, be implemented successfully in the long term. With the proverbial, famous “salami tactic”, that is, communication and implementation of small steps, this cannot be achieved. After the successful implementation support, we hand over the tasks to internal departments at the carriers. In some cases we continue to support our clients in the form of coaching for a limited period of time.
A well-planned approach is one of the main tasks of a responsible manager in a dynamic environment. Besides a corporate planning at the beginning of a business activity or its further development, regular annual planning is an important internal and external control and communication tool. Among other things a Business plan should set the pursued goals and thus make them measurable. In particular, stakeholders such as banks expects the managers to create and check a business plan regularly
A company in a critical crisis needs to provide investors and stakeholders a transparent realistic and fast overview on the situation. Investors are not only interested in the analysis of the current financial situation they need to understand the underlying reasons and want to see actions and measures to deal with the crisis of the business.
If investors feel sufficiently informed and not part of the process, there is a good chance that they will withdraw their support. Our standardised business quick check is the basis for the discussion of viable solutions with investors and financing partners thus developing first measures to secure the business and overcome the crisis.
The implementation of the BASEL III standard led to a serious constraint in the lending policy of commercial banks. Increasingly financial institutions require advice by an external party to assess the viability of presented business plans and concepts as a basis for their credit decisions. The plausibility check of business concepts and plans offered by perpuls does not only provide additional security to the financing partners, it goes along the internal evaluation of the company’s further development.
Our long standing experience in consulting projects across all industries enables us to quickly comprehend and evaluate business concepts and plans. The perpuls business reviews create significant additional value for investors, creditors and especially for the managers of the business under review.
We are fully committed to the individual needs of financial institutions and clients. Our target is to reduce the information “asymmetry” between the company and its investors.
Surely the view of Albert Einstein that „planning is replacing coincidence through error“ cannot be denied.
But, especially in a world with more and more complex disruptive influence a planned approach is getting more important. A bussiness planning is a compass for the Management as well as a guiding framework for the stakeholders.
Planning processes should be used to scrutinise oneself regularily and to initiate changes or measures when they are needed.
We provide support for the business planning process, especially in case of an investment project. We develop – in a close collaboration – a transparent and understandable fully integrated business planning and record the results in a report which can be used not only for negotiations with your financial institution or other stakeholders but also for discussions among the owners.
Restructuring and Turn Around Management
In today’s highly competitive globalised world, crises are a part of the life-cycle of a company. Successful companies have gained strength by successfully managing internal and external crises. Key to successful management is the early identification of economic and business crises and to react with decisive measures to contain negative impacts. However, this is hard to achieve in practice. Crises typically arise suddenly and unexpectedly: e.g. an important customer files for bankruptcy despite recent talks about new projects or a major project is delayed due to unforeseen statutory requirements.
Companies facing a crisis which threatens the future prospects often require an injection of fresh capital. Necessary funding can only be provided when all financial partners are pulling in the same direction. Consistent and accurate information by the management to shareholders and creditors is the basis for keeping them on board and to convince them to provide additional funding.
Our corporate recovery plan follows the guidelines of the German Institution of Auditors (IDW S 6). perpuls offers a tailor-made report which reflects the individual requirements of the company and investors.
The analysis of the company’s history and the underlying reasons for the crisis as well as the resulting restructuring measures are essential parts of corporate recovery concept. An integrated business plan reflecting the restructuring measures and their planned effects highlights the funding needs and additional measures to resolve the crisis.
As soon as investors, creditors and stakeholders have agreed on the recovery plan the measures outlined in the plan should be implemented as soon as possible.
Our team has proven, in many successful engagements, their special experience in the implementation of cost reduction programmes and the optimisation of production and manufacturing processes. Furthermore, perpuls offers expertise in implementing redundancy programs and negotiations of social plans. However, focusing on costs only may not lead to successful restructuring if the top-line is neglected and turnover declines. Our specialists for sales and marketing ensure that the recovery plan becomes a success story.
In case of a rating downgrade, for instance through stated losses in the last annual financial statement, the financial institutions want a statement that the companies followed strategy and business model is sustainable or rather competitive.
With an Independent Business Review („IBR“) which is developed in corporation with an independent and qualified third party you are able to negotiate with your financial institution on an eye level. The IBR usually provides detailed informationen about the current economic situation and the future perfomance of the company.
In case you breach any contractually defined warranties the IBR provides your lenders the necessary transparency to detemine the further strategy in the ongoing restructuring process.
In contrast to a restructuring plan, the IBR has no defined content or minimum requirements. But often the IBR is another term for a short version restructuring plan because all issues which are relevant for a restructuring plan are also dealt with in an Independent Business Review.
Company crisis are often realised or accepted not before insolvency issues occur.
Besides the constraint of the companies capacity to act, there is the possibility of an Insolvency. In that situation your capacity to act is restriction by legal laws and duties.
For the Management it is therefore essential to know in which stadium of the crisis the company is and which different possibilities the are to solve the situation correctly
At the latest with the beginning of financial difficulties the Management should begin to check the solvency regularily. This can be done either by the Management itself or by an experienced and educated partner. We support our clients with checking their solvency and record the result
Is the company in a sales or an earnings crisis, it is likely that it realises more losses in the following years. In the course of the work on the annual financial statement, especially in case of an negative equity a going-concern forecast is needed by the auditor. In a situation of crises the Management has to provide such a forecast, especially to avoid any personal liability risk.
The key element of a going-concern forescast is the depiction of the possible future developments in a fully integrated short or mid term business planning. For the going-concern forecast it is not only necessary to critically analyse the different possible developments but to process the current situation and the causes of the crisis.
Insolvency and Turn Around Consulting
The crisis comes suddenly and as a surprise to those involved: a major customer files for insolvency, even though new projects had recently been discussed, or a major project is delayed due to new requirements imposed by the authorities. If management’s countermeasures do not work as planned and the spiral of negative messages continues, the company is often unable to overcome the worsening crisis on its own. Then it is time to call in external experts.
The bankruptcy of a company does not necessarily have to mean the end. On the contrary, with good preparation and a controlled procedure, this can be used to start over and to sustainably reorganize the company. With the introduction of the ESUG, the legislature has just expanded the scope for redevelopment. With the area of ”insolvency consulting”, perpuls takes this approach into account and offers companies, financing banks, investors and insolvency administrators a comprehensive business advisory package.
When planning an insolvency application it is often necessary to decide which insolvency procedure is to be pursued. In particular in the case of a planned restructuring in self-administration, a well-founded and complete processing of the insolvency application is of decisive importance for the success of the subsequent proceedings. In the past, we have advised on many insolvency proceedings right from the start, right through to the sale or termination of the proceedings. For advice in this phase, it is crucial to know the possible scenarios of the various insolvency proceedings and to be able to assess their economic consequences. In particular, the experience of how the various stakeholders are likely to behave plays an important role. This is the only way to create a viable concept with the appropriate planning premises and options for action.
A reliable outlook on future operational business is decisive for the continuation of business operations in an economic crisis or in preliminary insolvency proceedings.
In the Going Conern and liquidity planning, the history is processed in a targeted manner and the current actual situation of the company is analyzed in order to derive a reliable, future-oriented planning for the operative business. On this basis, the necessary decisions about the short-term continuation of operations, but also about the future of the company, can be made.
A rolling update of the planning offers transparency and security for all involved. The plans can also be used as a basis and to control a later restructuring as part of an insolvency plan procedure.
With the insolvency plan or protective shield procedure, the legislature wants to support the restructuring of the company through a corresponding insolvency procedure. The focus here is on maintaining the company. An essential requirement for a successful reorganization is the professional preparation of the insolvency plan.
In drawing up the insolvency plan, it is essential to work closely with the insolvency administrator and creditors. The creditors, along with the liquidator, play a vital role in accepting the company’s debt relief plan. The discussions and negotiations in advance create transparency and security for the very heterogeneous groups of creditors.
Without this prior agreement, individual interests can come to the fore so that the entire plan fails. What remains decisive, however, is that the planning premises and thus the entire planning calculation are based on a solid foundation in order to win back the trust of the creditors, which has often been lost in the meantime.