The right advice and the right action at the right time can make a world of difference to the success of a business. All businesses experience ups and downs. Knowing whether to persevere through the storm or to cut your losses and exit before things get worse can be difficult, particularly in the case of a family business. Emotional attachment, fear of failure, family pressure and expectation and personal liability which risks the family home are all factors that can make it difficult to make an objective decision. Seeking independent, professional advice at the right time can help guide you through the storm or work out a plan to achieve the best result should it be time to call it quits.
How do you know when it’s time to call for help?
There is a simple 4-step process you can use to help you determine whether you should persevere through the storm or call it quits. This is outlined as follows:
1. An independent evaluation of the business is required to determine:
·The current financial position of the business
·The viability of the business i.e. whether the business can be profitable.
·The root causes of the difficulties of the business
2. When the root causes of the business problems are determined, it is necessary to make
an objective, dispassionate assessment of whether the problems can be resolved.
3. If the problems can be resolved you will need a strategic plan which identifies the
conditions which need to be satisfied to continue trading and to start making a profit.
4. If the problems cannot be resolved and it is not possible to turn the business around,
you will need to develop a realisation strategy that maximises the return to all affected parties. This is likely to include selling all or part of the business as a going concern.
Timing is everything!!
If you call for help before its too late, you maximise the chance of either turning the business around to making a profit, or maximising the return on realisation of the business. To continue blindly hoping for the best you may erode any value in the business and be forced to appoint an external administrator or be wound up by a creditor.
You may also risk losing the family home if guarantees are called upon, and open yourself to the possibility of being liable for insolvent trading. This is how people lose everything in a business failure.
Take action now to protect your assets and your family. Call us for an independent, objective assessment of your business. We are experienced in advising and working with businesses in financial difficulty and have the skill and expertise to help you achieve the best possible outcome for your business. Get the right advice, take the right action at the right time for your and your family’s peace of mind. Further resources:-