HomeFWJ TakeawayResourcesDealing with business failure

The best way of dealing with business failure is to prevent business failure. Business failure usually means a company going into a formal company insolvency process such as administration, or winding up, which can lead to the end of trading for the company. There are many ways to avoid business failure and prevent the need for company rescue, dependant on what the problems are in the business.

While there are inevitably signs a business will fail, in many cases this is gradual and business owners considering how to overcome business failure may miss these, which can then lead to more serious problems with the need for business recovery and company rescue, and ultimately sometimes a formal insolvency process. We set out below some of the signs a business will fail that we often witness at Francis Wilks and Jones.

Management issues

A key cause of business failure leading to the need for business recovery and company rescue is when the business does not have the correctly focussed skilled and trained management in place. When considering dealing with business failure, a business should assess the management team, to ensure they are fully in touch with all aspects of the business requiring business turnaround, and are capable of setting clear achievable goals both for themselves and for the business recovery. Get someone to hold managers accountable on a daily weekly or monthly basis, for example an external business rescue expert, or a specific board member, which can help to focus management.

How can poor cash flow affect a business?

There are many reasons for a business failing, but business failure almost always involves inadequate cash flow. On a business restructuring a full review of the costs and funding of the business is vital in company restructuring and company rescue to address in adequate cash flow.

An effective business recovery strategy addressing cash flow problems will usually require the business turnaround plan to include cutting down on costs where possible. This might involve assessing the staff structure, and looking at a company restructuring to ensure only staff essential to the business recovery and success remain.

Review your market and your customers

Key to a successful business turnaround strategy is to really understand your customer and what you can do for them. In a company rescue situation try to innovate and differentiate.


At Francis Wilks & Jones we can talk you through the options for your business and consider ways in which you can prevent a business from failing, including more formal processes such as company voluntary arrangement as well as informal business restructuring options.

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