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IF My Business Is Failing! Options Available?

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Author:

John A Waller

Director

Reviewed: October 3rd, 2021.

If My Business Is Failing! Options Available?

If my business is failing! Options available? To therefore help my business survive? 

During the present Coronavirus COVID19 pandemic, many companies are experiencing unprecedented pressure on cash flow. Companies of substantial financial standing are running out of money.

Then, what are directors to do?

Sadly, many are hanging on, allowing the company’s situation to grow worse, but more importantly, the company’s creditors’ position deteriorates.

Whatever you do, do not panic!

Contacting HBG Advisory allows you to benefit from much-needed support.

The usual causes of business failure

  • Weak inexperienced control at the top,
  • Growing your business beyond its working capital;
  • Poor planning of your business strategy;
  • Allowing a major customer to have a substantial portion of your sales, then failing;
  • Insufficient robust financial management;
  • Debtor ledger outgrowing companies finances;
  • Management team weakness;
  • Operating costs due to inflation not recovered;
  • Sudden change in business environment;
  • Failing to connect with your businesses target audience;
  • Failing to generate secure business systems;
  • Business fraud.

Common warning signs of potential failure of your business?

Company directors as acting responsible officers must be alert at all times. Ignorance of issues is often no defence when all goes wrong.

Keep a look out for the following signs, however, not exhaustive, they may help your business survive:

  • Repeatedly, carrying out the same business decision mistakes;
  • You feel constant pressure;
  • Sales drive fails;
  • Lose of market;
  • Your business is exposed to further commercial risks;
  • Uptake of new customers stops;
  • Existing customer sales fall;
  • Employees feel uncomfortable about their future;
  • Key workers leave.

If My Business is Failing! Options available? – Ways to prevent business failure?

Not all is lost, consider:

  • Request renewed terms with your business creditors;
  • Considering arranging a ‘time to pay’ arrangement;
  • Raising additional working capital;
  • Finally, meet with HBG Advisory to consider an insolvency procedure to preserve the business via a company voluntary arrangement failing which a company administration.

However, if the above fail? Options Available for a failing business

My Company has financial problems.

Sadly, many directors leave matters too long. The longer you leave it, the fewer alternatives remain available for directors to use.

Unfortunately, we hear this same story often. 

We recommend you consider talking to a professional insolvency practitioner, as several factors are simultaneously at work. Sometimes a Company Voluntary Arrangement (CVA) would be the best option to set up a reasonable repayment plan with your creditors, including HMRC. However, having a CVA rejected may then require the company to enter a Company Administration to ring-fence the business to protect the company’s assets and jobs. For further reading on a company administration, please view ‘Going into administration‘.

Other times, you may need funding or financing to keep your creditors paid while a turnaround of the business commences.

If your current product or type of service is outdated or no longer required, consider formal insolvency proceedings. Your current directors may not meet their current challenge, which will require changes at the top. However, wanting to continue trading though insolvent is illegal. You must cease trading immediately to avoid wrongful trading claims. Please read ‘Directors duties and responsibilities‘ for further guidance.

If all else fails and your business is no longer viable and insolvent. Company directors may call a meeting of shareholders to approve a liquidation.

For further reading, please view:

What are my options?

PEASE Talk to the team at HBG Advisory today and discuss:

We give a FREE initial consultation, backed by written confirmation if required.

Act today before your company’s creditors seek to take control, wind your company up.

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