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INSOLVENCY - Surviving a Crisis
Can your business survive a crisis?
Do you know how to recognise the warning signs?
These may seem easy and straight forward
questions and you may answer yes with out much thought, but
the failure of management to focus on theses issues causes many
business to enter into insolvency proceedings. The simple fact
is that if management have the right information available and
act upon it in a timely fashion then many business’s could
be saved.
You might think it may never happen to you – but it could-
other peoples failures impact upon even the most long standing
of businesses. Understandably the majority of all your time
may be directed towards establishing new business contacts or
managing at the sharp end etc – this is particularly true
for owner managed and family businesses- but how much of your
time is honestly devoted to keeping an eye on existing customers
or even suppliers of vital stocks or services. It is all too
easy to consider that a long standing customer or supplier will
always be there - but will they?
So what do you do? The first step is recognising the warning
signs and secondly you must immediately do something about it.
This will allow you the maximum time to take the steps to mitigate
the impact upon your business.
Recognising the warning signs
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Customer Retention problems |
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Late customer payments or payments
on account? |
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Are you offered post-dated cheques? |
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Do customers dispute invoices unnecessarily? |
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Are customers requesting or allowed
unauthorisation credit limits? |
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Are salesmen extending further credit
on overdue accounts? |
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Are suppliers reducing your credit
period? |
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Do you suffer a high fixed cost base? |
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Deteriorating relationship with business
bankers or creditors |
It is
generally considered there are four main causes of company
failure. Bad debts, lack of working capital, failure of
management and the loss of business market.
| Bad debts - |
an efficient credit controller is
invaluable and can mean the success or failure of a business.
The key is to be flexible at all times but work within
acceptable boundaries to reduce your` exposure. |
| Loss of market - |
difficult to predict as it is usual
for it be a gradual decline rather than an overnight occurrence.
The production of internal management accounts together
with budgetary information will be invaluable if used
and interpreted correctly. |
| Lack of working capital
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This is difficult to over come especially
with small business’s, however if all the other angles
of business failure are adequately tackled then the business
should be well prepared and an attractive proposition
to investors and lenders. |
If you are honest with yourself and you
are feeling a little uncomfortable having read the above then
it is time to seek properly regulated professional advice. We
at Muras Baker Jones assure you of total confidentiality at
all times and offer you a NO OBLIGATION FREE initial meeting.
TAKE ACTION IMMEDIATELY AND TURN
YOUR FINANCIAL PROBLEMS AROUND
For more information or to arrange
your initial FREE consultation please telephone Mark Botwood
on (01902) 393007. |
