Not all businesses that experience difficult times need to go through a formal insolvency process. In most cases where a business turnaround can be effected, the most important thing is for the owners to take advice at the earliest possible point in time. That however, is not always as easy as it sounds. There is always a temptation to try different strategies and see how they go, either to save costs or to save face, or often even both. It is particularly difficult to make the decision to take advice from an insolvency practitioner. They just close businesses down, don’t they?
Actually we don’t, but if we are not consulted until it is too late, that perception may just become a self-fulfilling prophecy.
Most successful business turnarounds are achieved through communication with lenders suppliers employees and other stakeholders, who often are far more helpful than most business owners would imagine. It is much easier and therefore much more likely to produce a positive outcome, if that communication begins before those stakeholders are feeling insufferable pain created an under-performing customer.
There can be very little hope in expecting support from a supplier who has not been paid for six months, having received a number of dishonoured cheques. However if that same supplier had been approached at a time when payment was just a little late and things were likely to become worse, with a request for support and forbearance for what could be an extended period of time, he just might have been able to help. The important point to remember in such circumstances is that no supplier wants to lose turnover, but they all want to be paid. If suppliers can see that you are behaving responsibly and doing your best, they will more than likely to be supportive.
The same approach works with banks and other lenders. There is however a great balancing act required. It would be fatal to go to a supplier or lender and simply tell them there is a problem. They are not interested in problems, but if you go to them with a solution to a problem they did not know they had, you have a much greater chance of a successful outcome.
We can help in these situations, and can help with your negotiations. However, the essential prerequisites to success are that your business must be viable going forward and you must be committed to ensuring its success.