When Good Companies Go Bad
All businesses start of fresh faced and ready to take on their chosen markets with all the energy of a young company. What often happens after a number of years is that the business ages a little and staff get sloppy or even bored. Before getting handed a garnishee notice because of bad book-keeping it pays to examine your company and how well it is running.
When the Shine Wears Off
That new company glow can wear off very quickly unless the company is being run correctly and making the most of its market position. If you can remember when your business first started operating then it probably had the following advantages:
New Business Plan – Your initial business plan has probably driven the company to where it is today (for better or worse!).
Scope for Expansion – A new company can only expand and increase its market share.
Excitement – Because of the challenges associated with a new company you and the employees would have been thriving off the excitement.
New Branding – Brands always look best when they are fresh and new.
If your business is getting a bit more mature it can start to have problems especially with the brand getting stale amongst staff and customers. This does not necessarily mean that the company is dead, but rather, it needs a drastic makeover! Try to implement changes quickly in order to rescue a business.
Collapse to Recovery!
Many businesses have been restructured and gone on to become bigger and better companies. The trick is to have a sound plan as well as outside, non-biased, help when making big changes. If you want to avoid a worst case scenario (like a director penalty notice) the more than quick fixes have to be applied.
Start with the following process to help you decide the companies financial future:
Assess the current standing of the company in your industry.
See what immediate changes need to made.
Contact professional consultants to formulate a rescue plan.
Don’t hold back when restructuring. If something needs to changed, then change it!
There are times when a business is just not capable of surviving a bad turn and this has to be handled properly as well. If a company has failed to survive a restructure the usual coarse of action is liquidation. This involves selling all assets in order to recover as much from the business as possible. Before you consider liquidation you can also consider a voluntary administration:
A voluntary administration allows a company limited protection from creditors as it restructures.
If no resolution can be found for the company within a certain time frame then liquidation can still be achieved.
A liquidation may be done in order to satisfy creditors or simple to fold up the company and cease trading. This must always be done properly or creditors may be looking for what is owed long after you have ceased trading. Because of the legal implications of liquidating a company you should always seek professional advice.