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Created with Fabric.js 1.4.5 Always have a plan B. If the situation cannot be resolved think about what you havelearned from the experience and what positives can be taken from the situation. Top Ten Tips for Businesses in Trouble. Take a hard line. Be critical with yourself and establish why the business is in the position that it is and more importantly what can be done about it. Speak to several advisers. Many of our previous clients have said that there is a mine field of contradicting advice from solicitors, accountants and insolvency practitioners. It may feel like you are being bounced from pillar to post but you will learn something from every conversation you have. Plan ahead. There is nothing wrong in having a new company formed with bank accounts in place should you decide to try again at the business you are in. Know where you are. Prepare a statement of the companys assets and liabilities doing this will allow you to make informed decisions based on the true situation. Look at your books and the bottom line. If your business is not making a profit and is struggling to pay you a salary then be realistic about how long you can carry on. The main problem is that when company directors and business owners alike are trying to save their businesses they find that they spend most of their day worrying about the problemsrather than looking for the solutions. As a result of this they may start speaking to creditors with less confidence (or even worse, they may ignore their calls altogether) and debtors more aggressively. Of course, more often than not, as a result of this employees may become aware of what is going on and that affects the moral within the organization. The result of these specific problems is that because the company directors or business owners are busy fire-fighting they are not focused on the business and generating new income, which compounds the financial position of the business. Broken promises to creditors are a clear warning sign that the business is in financial difficulty and the creditors start to become more aggressive in their pursuit of collecting any monies owed to them, debtors can tell when someone is desperate for money and sometimes think that if they can hold off paying or even dispute the debt that the business may fold and therefore they won't have to pay at all. The most serious problem is the moral of staff,if a staff member believes that they could be potentially out of a job due to the failure of the business they can become less productive or even start looking for other employment. In these situations it is important for the directors to remain focused on the problems at hand. A clear indication that things are going wrong is any of the above mentioned specifics. At this point it is imperative that they seek professional advice and below are our ten top tips for such situations. 1. Make sure you are speaking to someone who is experienced enough to advice you, not necessarily qualified but has dealt in the insolvency/turnaround business for many years. They can advise you of the many pitfalls of dealing directly with insolvency practitioners and other professionals. Do not be afraid of the unknown. If you have never been through the process of closing a business before and are daunted by the very mention of it, don't be. If you have done nothing wrong and have only ever tried to act in the best interest of the business and this can be clearly demonstrated then there is nothing to fear. If the staff become aware of the situation, our experienceis that it is best to have an open book policy and keep them informed of the situation and any possible avenuesfor resolution you are pursuing. This can provide them with some comfort in a difficult time and provide you with some much needed support. Last but not least, DO NOT ignore the situation, these things do not resolve themselves and being in denial is only going to compound matters in the long run. 2. 3. 4. 5. 6. Freephone: 0330 6600 701 We hope you found this article helpful and informative. If you would like more information on our range of business turnaround services or would like to speak with one of our consultants regarding your business call Clarior today. 10. 9. 8. 7. With over 20 years experience in the business turnaround industry we have held meetings with thousands of company directors and business owners who had failing businesses. At those initial meetings our primary task was to establish what the business owed to their creditors, 90% of the time our clients were unable to provide an exact figure or even one that was close to the amount that was actually owed.
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