A recent report by the Association of Business Recovery Professionals has indicated that more businesses are showing signs of distress with 1 in 10 businesses worried about the possibility of insolvency and increasing worry about levels of debt. Loss of regular customers, decreased profits and cash flow difficulties are also major concerns.
The picture seems more worse in the north of the country and is certainly appearing to affect manufacturers more than other businesses. For example, 31 % of Northern businesses are introducing pay cuts, compared with 20% in the South and 16% in the Midlands.
Ian Brown, insolvency specialist at Wosskow Brown says “This is of course a worrying trend, and businesses need to take advice as quickly as possible. Many don’t realise that the business could potentially be saved if early steps are taken, preferably before encountering financial difficulty. Of course sometimes it seems to come out of the blue, but the fact is that businesses don’t generally fail overnight; it’s usually rather a slow process. Over the years, I have helped many companies encountering difficulties to find a way forward – be that a rescue, or to close the business with as little damage as possible. In my experience, it’s the company struggling to pay its creditors that also has the largest book debts and so it’s vital that debts are collected efficiently and not left on the books. The problem must not be left to fester. However, there are going to be situations where this is simply ‘too little too late’ and a business might have to try to enter into informal or formal arrangements with its creditors.”
If your business is struggling and you want expert advice, contact Ian for discussion as soon as possible on 0114 256 4770 or by email at firstname.lastname@example.org