What to do if your business is in financial trouble

What to do if your business is in financial trouble

If you think that your business might be in trouble it is a good idea to get some advice from a Business turnaround specialist or a qualified insolvency practitioner. They have a vast amount of experience and they will be able to explain all of the choices that are available, the risks and benefits of each choice and they can also help you put your chosen plan of action in place.

When businesses get advice early they can often rescue the struggling business and bankruptcy becomes a much less likely option. If your business is in financial trouble don’t wait until your problems get out of control, speak professional advice if:

  • You cannot pay your debts
  • You cannot pay your staff
  • You have a lack of working capital
  • You have received a County Court summons

Some of the warning signs of Financial Difficulty

The first signs of financial difficulty are subtle and can be easily overlooked in regular day-to-day business activities.

However if your business is exhibiting one or more of the problems listed below, then your business may be suffering from financial difficulties and your business could be at significant risk:

  • The business is constantly relying on its overdraft facility
  • Running payroll requires careful cash management every month
  • You are spending significant amounts of management time juggling cash rather than focusing on the business
  • You are receiving more calls and threats from creditors
  • Your customers are taking longer to pay their bills
  • Your payments to HMRC are constantly made late

Cash flow problems create more work for the business and can take up a significant amount of time. This puts your business at further risk as you have to spend your time working on resolving these issues rather than addressing the more serious underlying issues.

Preventing Financial Difficulty

The best solution to avoiding financial difficulties and insolvency is to have preventative measures in place.

The following measures should help your business avoid financial difficulties:

  • Conduct medium and long term cash flow forecasts and keep these updated
  • Adopt a strong and consistent approach to credit control
  • Have tight control over spending
  • Arrange new sources of finance such as factoring and credit protection
  • Get an objective view from a Business Finance professional

However if your business is suffering from extreme financial difficulties you should seek immediate advice.

To understand the whole range of options and to get help choosing the right one for your business contact us on 0800 597 4757 or enquire online using the form opposite.