Unable to pay creditors on time
A key indicator of business failure and how do you know if your business is failing is the inability of a company to pay its creditors as and when they fall due. The business will have repeated and ongoing pressure from creditors and may also experience increased customer complaints.
Your employee turnover rate may be high, which can indicate a lack of confidence in a business turnaround. Directors may be struggling to pay employees, may not have taken a salary from the business for a few months. This indicates the need for some sort of business recovery strategy to be put in place leading to company rescue before the business is irretrievable.
Inability to obtain financing
A business may have reached its borrowing limits on overdrafts or credit cards and have been refused further financing. This is a key indicator of potential business failure and any company in this position will require a business turnaround strategy with some sort of business restructuring plan to be put in place if they want to bring about a business recovery and company rescue.
Money tied up in capital investments not making a return
It may be that the business has been investing too much capital in products without seeing adequate returns, and therefore has a cash flow problem which prevents it from paying creditors or employees. Cash flow is essential to all businesses, and it is important that directors are prepared in the event they need to know how do you handle a cash flow shortage? Any good business recovery strategy will look at cost and expense cutting in a business turnaround, to ensure adequate cash flow to pay creditors and staff.
There is usually a way out of the difficulties – let us help
The above are just some of the signs of how do you know if your business is failing. However, they need not be fatal and many companies can put in place a good business recovery strategy with the help of a business rescue expert and lead to a full company rescue. Business turnaround happens all the time leading to a successful business recovery, often using a business restructuring tool or a company restructuring plan.
If you recognise a number of these warning signs in your own business, it is essential you act quickly. At Francis Wilks & Jones we have an expert team in place with a great deal of experience of business recovery strategies for businesses. With the right help from a business recovery expert, it is possible to turnaround your business and implement a business recovery strategy leading to company rescue. Contact us today to talk through a range of options for your business.