3 warning signs that your company may not survive
When my business was struggling it was hard for me to admit that the problems were insurmountable, I’m a very positive person naturally and in this scenario, my positivity worked against me.
If you had to walked into my office in 2015 and asked me how things were going, my answer would have been something like ‘it’s about to turn the corner’ or ‘we are just having a rough patch, it’s bound to change’ I was burying my head in the sand and not wanting to face the reality that the industry I was working in was in a dire mess and so was my company.
Looking for the early warning signs of insolvency in your business helps you make better decisions and the earlier that you admit there is a problem the more options that you have available to you and the better the outcome will be.
If you leave it too long before taking advice you could end up landing yourself in hot water when you finally speak to an insolvency practitioner. Remember, once your company becomes insolvent your responsibilities change and you have to act in the interests of your creditors and not make their positions any worse.
1. Is the business insolvent? Can your company pay its debts on time? Are the company’s liabilities more than its assets?
2. Is the business always skint? Cash Flow problems hit us all but if your business is constantly chasing its tail with money it’s a warning sign of insolvency.
3. Are your customers always late paying you? If they are late paying you that suggests they may also have cash flow problems. What would happen if your largest client went out of business? How would having to wait an extra 90 days impact the cash flow of your business? There is a wave of insolvencies due to hit the UK this year and if your customers go bust on you this could cause you to seek insolvency.
If your business is experiencing any of these please get in touch.
All the best,
1st Business Rescue