Have any of you got experience of turning around a failing business?

[NeatSoda]

A friend has offered me a share in a business and I'd love to take it. It's a beautiful shop, with high-end goods and (I think) lots of potential. However, it has been hard hit by the recession and morale among staff is very low.

It owns it's premises and a lot of stock so there are assets there. It's Ltd so no danger of me exposing myself to debt, and I'm not being asked to put in money, just time which would be significant - 20hours a week but in reality more time after hours.

TBH, I'm less concerned about my risk than my ability to put it back in the black. I have admin and management skills but never done anything like this.

Does anyone have experience? Tips for success?

Do you think you know why it is failing?

Yes, too high stock levels. No online presence. Low staff morale and difficult management. Zero branding or marketing done.

Can't change the management unfortunately.

Wow, sounds like a great challenge. I don't have any experience so can't pass on specific tips but it sounds like a low risk opportunity for you, if you know what you need to address and how then I would go for it. I was an accountant so probably have similar skills to you but would love to try something like that. Will be tough though! Good luck

Just thinking about practicalities here.

First of all, do be careful. You can become liable for the debts of a Ltd company if you are a Director and it is tradng insolvently. You can be a shareholder without being a Director but that means you have less power to direct the business.

On a personal level you may also find it difficult to work with your friend if she still sees it as 'her' business.

Finally, if you do decide to go ahead you will need to have the shares formally transferred to you and a proper contractual agreement between you and your friend bfore you start. You need to agree how and when you will be allowed to sell your shares and take the money out one the business once it is back on its feet.

You also need to consider whether the potential value of the shares will be worth the effort and how much will it cost in legal fees to get the agreement in place?

Thanks for your advice. Looks as though I am going to take it but the money is still not absolutely finalised.

Went in today - and things are a bit worse than I thought. Almost all the staff couldn't tell you the difference between hardware and software.