The BCR Insolvency Blog

How To Save A Struggling Business In 10 Steps

Posted by Chris Knott on 22-Mar-2017 10:10:00

How To Save A Struggling Business In 10 Steps.jpg

Running into problems with your business is by no means a pleasurable experience. However, problems do not have to spell the end of your venture. The good news is that you could potentially save your business by following these easily-applicable steps.

1) Call An Insolvency Practitioner

Your business may not be anywhere near insolvency. However, if you are facing long-term cash flow problems, or difficulties making debt repayments, this could be the ideal time to get in touch with an insolvency practitioner. These professionals have an objective view of your business, and they know the signs of insolvency before it occurs.

2) Make A List Of Your Outgoings

Make a list of your expenses and see which can be eliminated. Cutting your budget will free up more working capital for paying employees and creditors.

Trimming your budget may also include considering making employees’ redundant. Although this can be an extremely difficult part of saving your business, it may be necessary for its survival. Those who are making the company money by getting new customers, making continued sales or servicing your sales department will help your business to survive. It may even be that you only need to cut employee hours and not cut jobs. However, the only way to know this is to look at your departments and employee list.

3) Make A Recovery Plan

Your business may be struggling, but plans for the future are still required. Your plans need to include information about what has happened to your business thus far, as well as looking ahead to what may be in store. Although you may think it’s too late to make a plan when your business is struggling, doing so now may be the healthiest decision you can make.

4) Concentrate On Profits

The focus needs to be on sales. That being said, you will want to identify the most profitable areas of your business and focus on building them. Focusing on your core business may not seem exciting, but it is absolutely vital if you want to save your company.

5) Gather The Troops

The next step is to meet with your fellow directors and other key personnel. Arrange a strategy meeting and discuss what to do to fix the company. Before you meet, it’s crucial that you have your own plan and vision written down. You’ll also want to be ready to speak about the plans you have created, and then revise them if necessary. After revisions, it will be time to present the plans to all employees at a staff meeting.

6) Employee Input

Your meeting with employees needs to be transparent and honest. Tell them you are in trouble, but that you’ve already met with your board of directors and other stakeholders, and have made solid plans to turn the company around. Your employees will want to know where they fit in with your future plans. They’ll also want to know what they can do to assist you with saving the business. Involving staff and encouraging their input on relevant parts of your business plan can yield some useful perspectives.

7) Put Out The Fires

When your business is in trouble, this news will spread quickly. The best way to shut the rumour mill down is to meet with your customers. You must keep them informed about what’s going on and let them know your plans for saving your business. Reassure them that all will be well, and remember the value of transparency. No time is a good time for deceit, but especially not when you are struggling.

8) Prepare A Statement For Suppliers

Just like your customers, your suppliers will want to know the truth about the prospects of your company. Having a statement ready that sheds light on what’s happening and how you plan to rectify things will go a long way to easing supplier tensions.

9) Tell The Tax Man

The instant you experience problems with paying your taxes, or if you feel this will be imminent, you need to tell HMRC. By notifying them early on, you may be in a better position to get the help you need. It will also go a long way to easing your stress.

10) Notify Creditors And Banks

Your bank and other creditors will also need to know what is going on with your company. The best way to do this is to meet with them face-to-face. Ensure that you discuss your action plan and that it is presented confidently. Just like HMRC, your bank and other creditors will be much more willing to continue working with you if they know you’ve taken the time to discuss your plans with them.

When your business is in trouble, there is no substitute for professional advice. Even a free consultation with an insolvency practitioner can provide you with the information needed to save a business. Don’t delay in taking the necessary steps to save your business. Contact us today on 0333 0143454.

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Topics: Business Rescue

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