Business restructuring process

Business restructuring is the process of evaluating and reorganizing resources, financial structures, organizational structures, business operations, and operational processes to address existing problems and improve operational efficiency. Depending on the objectives and actual situation, a business may implement one or a combination of restructuring options.

5 steps to business restructuring

Business current analysis

Businesses need to conduct a comprehensive assessment of their financial situation, organization, business operations, and existing risks to determine the reasons for restructuring and the extent of necessary changes.

Finance: Analyze revenue, expenses, profits, cash flow, asset structure, liabilities, and equity.
Business activities: Evaluate products, services, customers, markets, revenue, and performance for each business unit or segment.
Organization and personnel: Review the governance structure, departmental functions, human resources, and overlapping positions.
Operating procedure: Identify bottlenecks, non-value-adding costs, and areas for improvement.
Legal aspects and risks: Review ownership structure, contracts, financial obligations, and legal issues that may affect the restructuring plan.

Define objectives and develop a plan.

After assessing the current situation, businesses need to define specific goals and select a restructuring scope that is appropriate to their resources, time, and implementation capabilities.

Define your goals: The focus could be on improving cash flow, reducing costs, increasing profitability, streamlining the organization, or changing the business model.
Define the scope: Restructuring involves financial, organizational, operational, asset, technological, or combined areas.
Develop a plan: Identify the necessary actions, resources, deadlines, and responsibilities of each department.
Establish evaluation criteria: Identify KPIs and financial, operational, or business metrics to measure results.

Complete the necessary documents and procedures.

Not all restructuring plans involve legal procedures. However, when the plan involves changes in capital, ownership, business type, organizational structure, or division, separation, merger, or acquisition, the enterprise needs to carry out the corresponding procedures as prescribed by law.

Prepare the documents: Drafting resolutions, decisions, plans, and related documents.
Through this plan: Approval shall be granted in accordance with the authority of the owner, the Board of Members, the Board of Directors, or the General Meeting of Shareholders, as applicable.
Register changes: Carry out business registration procedures or specialized procedures if the plan involves changes that require registration.
Review related obligations: Assess the impact on employees, creditors, partners, taxes, and other stakeholders before implementation.

The specific procedures depend on the form of restructuring and the actual transaction; not all cases require registration of business changes. The current Enterprise Law includes Law 59/2020/QH14 and its amendments and supplements, including Law 76/2025/QH15 which takes effect from July 1, 2025.

Implement the restructuring plan.

After the plan is approved and all necessary procedures are completed, the business proceeds to implement the changes according to the established roadmap.

Financial restructuring: Implement debt restructuring, capital adjustments, and optimize cash flow and assets according to the plan.
Organizational restructuring: Reorganize the structure, functions, personnel, and governance mechanisms.
Restructuring operations: Adjust products, services, markets, processes, and business models.
Change management: Internal communication, assignment of responsibilities, and coordination between departments.
Address the problem that arises: Adjust the plan if risks arise or if actual results differ from expectations.

Monitoring and evaluating results

Restructuring doesn't end immediately after changes are implemented. Businesses need to monitor the set targets and conduct periodic evaluations to determine the effectiveness of the plan.

Track KPIs: Evaluate revenue, profit, cash flow, costs, productivity, and other metrics in line with restructuring objectives.
Compare the results: Compare the actual results with the initial goals and plans.
Risk assessment: Identify any new problems that have arisen or objectives that have not been achieved.
Adjust the plan: Add to or modify the solution as needed.
Report of results: Summarize the results of implementation and develop a plan for further improvement.

Business current analysis

When should a business restructure?

Businesses may consider restructuring when signs emerge that the current model is no longer suitable or operational efficiency is declining. Early identification allows businesses to proactively adjust before financial or operational problems become serious.

Some common symptoms include:

Cash flow shortage or increased debt pressure.
Operating costs increased, but business performance decreased.
A cumbersome management structure or overlapping functions between departments.
The product, service, or business model is no longer suitable for the market.
Assets and capital have not been used effectively.
Businesses need to change their ownership structure, capital, or organizational model.

Things to note when developing a restructuring plan.

An effective restructuring plan needs to be based on factual data and have measurable goals. Businesses should not focus solely on cost reduction but should also consider revenue generation, cash flow, operational capacity, organizational structure, and legal obligations.

Depending on the specific circumstances, businesses may combine various methods such as financial, organizational, operational, and asset restructuring to achieve their overall goals.

Need advice on business restructuring?

MAN provides business restructuring consulting services, assisting in assessing the current situation, developing plans, and implementing appropriate solutions in finance, organization, and business operations.

Consulting on restructuring options suitable to the company's situation.
Financial analysis, liabilities, and operational efficiency.
Support in developing restructuring plans and implementation roadmaps.
Provide assistance with necessary paperwork and procedures when needed.

Business restructuring process