You don’t need me to tell you that times are hard.
Increasingly companies who thought they had weathered the worst of the recession, are finding that they are struggling to carry on any further.
In some cases their customers are struggling, or have gone bust themselves; in others their banks are refusing to play ball and are withdrawing their overdraft facility.
If you are thinking the worst with your business it is very important that you don’t the following:
1. Stick your head in the sand! Ignoring the problem is not going to make it go away. If you don’t take control of the situation it may well end up taking control of you!
2. Do anything rash! As bad as ignoring the problem is taking rash action can be worse. I have seen business owners take on high interest debt to save a company which is beyond saving. This has left them personally exposed and, sometimes, bankrupt as a result.
3. Keep your staff in the dark! In my opinion is morally right to keep your staff informed of the business situation, and is also sensible from a business view point too. Firstly, you may think that staff do not know the business is in trouble, but in my experience your very behaviour is likely to alert them – certainly irate calls from creditors will. It is better for them to hear the truth from you than to imagine a worse truth themselves. Secondly, if you keep them informed, and hopefully on your side, you are more likely to hold onto them than if they feel, perhaps erroneously, that there is no future and leave anyway.
DO SEEK PROFESSIONAL HELP AT THE EARLIEST OPPORTUNITY!
If you don’t know the exact financial position it is important to find out what it is from your accountant. You will need to look at both your business and personal finances together as they are inextricably linked.
If you suspect the situation is bad talk to a debt specialist – they will be able to review: where you are; what your options are; and the order in which action should be taken. Chris and John from Lightside Financial, for example, are fantastic at getting to the nub of what needs to be done.
Finally, do what your professional advisors advise! It may be unpalatable medicine or even terminal from your business’s view point, but it will almost certainly enable you personally to come out of a terrible situation as painlessly as possible.