Company rescue

We sometimes get asked – How do I revive a dying business?

Running a business can be challenging, and many companies may face financial difficulties at some point. However, formal insolvency procedures, such as liquidation or administration should not be the first or only option. There are several strategies that can help revive a dying business and potentially avoid the need for formal insolvency. We explore below some of the key areas we can help. While no two companies in business recovery are the same, there are often many of the same issues that arise when dealing with business failure and company rescue situations. We set out some of these below.

Recognising the Signs of a Dying Business

It’s crucial to identify the early warning signs of a struggling business to take prompt action. Some common indicators include declining sales, increasing debts, cash flow issues, inability to pay suppliers or employees, loss of key customers or contracts, legal disputes, and creditor pressure. If your business is experiencing these challenges, it’s time to take action to turn the situation around.

There are a number of company rescue strategies you can take advantage of

1.         Restructuring

The question “How do I revive a dying business” will usually involve some sort of business restructuring or company restructuring plan, looking at a business turnaround to lead to business recovery. In any business recovery situation, it is important for company rescue and business recovery to stabilise the business, and defining a business recovery strategy is often key in any method of company rescue.

Restructuring involves making significant changes to the company’s operations, finances, or management structure to improve its financial stability. This may include renegotiating contracts, reducing overheads, consolidating debts, or divesting non-core assets. A thorough review of the business’s financials and operations can help identify areas that need restructuring.

2.         Cash flow injection

Lack of sufficient cashflow is often the main reason companies fail in tough economic times.  Refinancing or cash flow injection can make all the difference.

Refinancing involves obtaining new funding or renegotiating existing debts to improve the company’s cash flow and financial position. This may include securing additional funding from investors, obtaining loans or credit facilities, or negotiating new payment terms with creditors. Proper financial forecasting and business planning can be helpful in securing refinancing options.

On a practical level, whilst support is put in place, directors should prepare a plan to work out how can you prevent a business from failing if they have no cash coming in for a period of, say, a month. That way a business owner will be prepared to handle a cash flow shortage which is vital to any successful business recovery strategy to bring about an effective business turnaround and company rescue. Taking control of cash flow and sorting out proper business funding is therefore crucial when considering how do I revive a dying business.

Our 20+ years’ in business mean that we have fantastic connections with financiers and brokers – and we would happily put you in touch with them to see if they can help.

4.         Reducing waste & overheads

It is often important to reduce overheads and cut out the waste in a business turnaround. Remove the nice to have during a company rescue, and anything not essential to the business recovery strategy. Work to identify an appropriate finance partner to work with you to restore the business in business turnaround to bring about a successful company rescue and business recovery.

5.         Only keeping the best employees

Other options on how to revive a dying business are to keep on only the employees who are essential to the business recovery strategy, or, for employees with a lot of experience, you may be able to agree to cut their hours temporarily with the hope of increasing them later.

6.         Better strategic planning

Lack of strategic thinking in management is often a cause of business failure and will undermine any company rescue and business recovery. A key turnaround strategy for business in crisis is understanding your customer. In a company rescue you must understand your customers well.

7. Chase your own debts

Often companies in trouble are owed money themselves which they are not chasing properly.  Our experienced debt team can help chase down these debts – which can give an immediate cashflow injection and help save the company.

8. Take advice from a restructuring professional

Finally, for an effective business turnaround and company rescue, it is often very effective to approach a business rescue expert to seek their opinion on how can a business avoid failure, and discuss with that business rescue expert an effective business recovery strategy.

Turnaround management involves appointing experienced professionals to assess the company’s operations and implement strategic changes to reverse its decline. This may include changes in leadership, operational efficiencies, marketing strategies, and employee restructuring. A well-executed turnaround plan can help restore the company’s financial health and competitiveness.

Our brilliant team work in conjunction with other specialists – so you always have the right team in place.

We are often asked about preventing a company from being dissolved.

What is company dissolution?

To understand about preventing a company from being dissolved, you first need to understand what does dissolving a company mean?

The dissolution of a company takes place at Companies House. The Registrar of Companies will dissolve the company, which means taking it off the companies Register so that it no longer exists. There can be many reasons for the dissolution of a company and preventing a company from being dissolved will depend on why the company is due to be dissolved.

Voluntary striking-off

Any company can apply to the Registrar of Companies to be struck off the Register of Companies and be dissolved. If the criteria is met, then once the application has been made a notice of the proposed striking off is published to give interested parties an opportunity to object. If there are no objections the company will be struck off the register not less than two months from the date of the notice.

Striking off by the Registrar of Companies

The Registrar of Companies has the power to strike off a company if he has reasonable grounds to believe that a company is not carrying on a business or is not in operation. This is likely if for example a company has failed to make its annual statutory filings within a reasonable period.

• After a series of letters to the company, notices and following the statutory notice period, a company will be dissolved once the Registrar has published a notice that the company has been struck off.
• For the owner of a business looking at preventing a company from being dissolved, that business owner will need to be in contact with the Registrar of Companies to discuss why the company should not be dissolved.
• If there is good reason, it is unlikely that the Registrar of Companies will strike off the company if it is a viable company that is meeting its statutory obligations.

A possible reason for preventing a company from being dissolved (albeit temporarily) may be that a company insolvency process has led to the sale of some of the assets of the company, and it is important that the sale happens while the company is still live, so that if there are any problems with the sale, the company remains live in order to deal with these. For example, if there is a receivership sale of property of a company that is dissolved or intending to be dissolved.

Restoration to the Register

When a company has been dissolved or struck off the Register it may be possible for the company to be restored to the Register if various criteria is met. This can be through a court order or by what is known as “the administrative restoration procedure”. An application to the court may be made by anyone with an interest in the restoration. The administrative restoration procedure only applies to companies that have been struck off by the Registrar of Companies (not voluntarily struck off). It can be made by a former director or shareholder of the company directly to the Registrar who will restore it if certain conditions are met.

Business rescue is possible even in the bleakest of situations. Our team has been saving companies since 2002. We can help you too.

There are many methods of business rescue. What method is best very much depends in the particular circumstances of your business turnaround requirements on the issues which the company seeking company rescue is facing. In order to avoid a formal insolvency process, a company looking for business rescue will often take advice on whether it is possible to bring about a successful business turnaround without having to enter a formal insolvency process. Advice can be taken from an independent business rescue expert – and we know plenty.

Company rescue options

There are a number of options with company rescue. These can include

• the more formal company voluntary arrangement process whereby a voluntary arrangement is reached on a contractual basis with the company’s creditors that they won’t bring proceedings whilst the voluntary arrangement is in place. It is also possible for a company to look at a scheme of arrangement which is a more formal company rescue process sanctioned by the court, but it is not a company insolvency process;
• company restructuring such as a sale of non-core assets, debt restructuring, enforcing share security, or obtaining an equity injection into the company;
• a full review of costs and expenses, including the employee and management structure.

These (and other) options can form part of a business turnaround and company restructuring plan, as part of a company restructuring or business recovery strategy.

Advantages of business rescue

There are many advantages to company restructuring and in using less formal business restructuring methods.

• often, they allow for the goodwill of the business to remain intact and trading to continue, and therefore provide better return to creditors and shareholders compared with formal insolvency proceedings;
• it will probably cost less with a business turnaround than one of the formal processes;
• there is less publicity to a company restructuring/business recovery than a formal company insolvency process;
• an informal business restructuring can be very flexible, particularly useful if there are cross-border elements;
• the directors will usually remain in place on the whole in a company restructuring, and unlike formal insolvency proceedings, they are not subject to automatic investigations by a liquidator.

What is business recovery or company rescue?

Business recovery is when a company in financial difficulties adopts a business recovery strategy which leads to a business turnaround and eventually a company rescue or business recovery.

Business recovery is sometimes needed if the company requiring company rescue has some cash flow problems or is facing some other problems in the business and requires a strategy to bring about business recovery to allow for a turnaround of the business and a company rescue.

Choose the method which works for you

A business recovery can involve various different methods. These can be informal methods of such as a company restructuring or business restructuring which will review the costs and expenses of the business, including evaluating employee structure.

Formal methods of business recovery

Such a business recovery strategy may also include a more formal voluntary arrangement with creditors to provide some breathing space to allow for a company restructuring and therefore a business recovery, such as entering into a company voluntary arrangement.

• A company voluntary arrangement is a voluntary arrangement agreed between a company and its creditors that the creditors of the business requiring company rescue will not pursue their debts by way of any formal insolvency process against the company in business turnaround during the course of the company voluntary arrangement.

• Business recovery is more beneficial to a company suffering financial problems if there is a viable business to allow for a business restructuring and a business turnaround to achieve a full business rescue.
• Many formal insolvency processes have a stigma attached and inevitably, unless allowing for a sale of a business in a situation such as a pre-pack administration sale, will usually lead to the cessation of trade of the business, preventing a business turnaround.
• A formal insolvency process may also lead to an investigation of the directors of the company and can be more expensive than a business recovery strategy that has been devised by a business rescue expert.

A business recovery strategy or turnaround strategy will be needed when a company is reviewing how can a business avoid failure. Our team is here to help. We have been saving businesses since 2002 – and have access to a wider team of professional experts.

Inevitably there will be financial problems and solvency issues in a company looking at a business restructuring or business turnaround in order to effect a company rescue.

A turnaround strategy in business can include a number of elements, depending on the problems within the company seeking business recovery or business turnaround.

• It is likely that a business recovery strategy will be put in place once a company requiring company rescue has contacted a business rescue expert to review what business recovery strategy is best for their company in order to overcome business failure and bring about a successful company rescue.
• A successful business recovery strategy might include some form of formal company insolvency process such as a company voluntary arrangement. This is a contractual voluntary arrangement between a company and its creditors giving the company some breathing space in order to affect a company restructuring and a business turnaround, in order to repay its creditors in due course.

It may be that a business recovery strategy devised by a business rescue expert will also consider certain less formal business recovery strategies, such as cost cutting measures, re-evaluating employees, considering the management structure, and refinancing, in order to improve cash flow.

Poor cashflow can be the death knell for a business. But with proper help and advice – we can help turn the situation around. Call our expert team today.

When considering how can a business avoid failure or what are the reasons why a business fails, a positive cash flow position is usually top of the list. Even with a healthy balance sheet, if you can’t pay your staff and your creditors on time, you will experience how poor cash flow affects a business first-hand, and will inevitably find yourself dealing with business failure.

• Late payment from customers is one of the primary reasons businesses are unable to pay their own creditors on time, which if left can lead to the need for company rescue and a business recovery strategy for an effective business turnaround.
• It is therefore vital that the person in charge of collecting payments in any business turnaround, must be good at their job and well rewarded to avoid cash flow problems, and this becomes more vital during a company restructuring and business turnaround situation.

At Francis Wilks & Jones we have an expert team of debt recovery specialists who can help collect in money quickly for you.

When considering how do you handle a cash flow shortage in a business recovery situation, and therefore how do you prevent a business from failing, directors of a business in business recovery should prepare a plan to work out how can you prevent a business from failing if you had no cash coming in for a period of time, say 7 days or 14 days or 28 days. That way business owners will be prepared to handle a cash flow shortage as it arises, and will have a good business recovery strategy in place to bring about an effective business turnaround and company rescue if this happens. Taking control of cash flow is crucial when considering how do I revive a dying business.

There are ways of improving a company’s cash flow situation, such as raising short term finance, cutting costs and other methods.

At Francis Wilks & Jones we have a vast range of experience on advising businesses in business restructuring or business turnaround situations on how to improve their cash flow issues. Contact our debt recovery team today

In simple terms, business turnaround occurs when a company experiences some form of financial distress which requires company rescue. Inevitably that company requiring company rescue will contact a business rescue expert with a view to some sort of business restructuring to lead to a business turnaround and full business recovery.

Business rescue expert

A successful business turnaround or business recovery will inevitably involve the advice of a business rescue expert, who will suggest some form of business recovery strategy most suitable for the business. A business rescue expert will have experience in all aspects of company rescue, and can be a specially trained insolvency practitioner, or a lawyer, or a company restructuring expert. At FWJ we have the expert lawyers you need – and access to trusted professionals who you might need to help.

Business recovery strategy

A business recovery strategy may involve company restructuring or business restructuring for a business turnaround. It will inevitably mean assessing certain key components of the business requiring business recovery. This will include looking at the cash flow position and whether this can be improved so that the business requiring company rescue can pay creditors on time and therefore won’t have the worry of creditors threatening formal insolvency proceedings, which can thwart a business turnaround and affect company rescue.

Business turnaround tools

The business rescue expert will advise, but the company may need to assess its management structure and re-evaluate whether the management accounts are adequate and up to date and available to all the managers.

On a company restructuring it is likely that

• a full assessment of the employees will need to be made as this may assist in cutting costs in a business restructuring.
• if creditors are pressing, the business rescue expert may as part of a business recovery strategy suggest some sort of either formal or informal agreement being reached with creditors.
• a more formal process could be that of a company voluntary arrangement being a contractual voluntary arrangement between creditor and company.

Quick advice can still save a business. But even if it is beyond help, a structured end to the company can go a long way to minimising risk. Our expert team can help.

We are often asked “What to do if business is going down”? One of the best things is to take stock and put in place a proper business recovery strategy. Seeking external help from professionals at this stage can make all the difference between success and failure of the business.

Business recovery strategy

If you want to know what to do if business is going down, it is important to review what are the problem areas within the business. You can then devise a tailored business recovery strategy for your business, leading to a business turnaround and company rescue.

There can many reasons for business failure, but one that must be addressed in all business recovery strategies is inevitably poor cash flow. On a business restructuring a full review of the costs and funding of the business is vital for business turnaround and company rescue. An effective business recovery strategy will usually require the business turnaround plan to include:

• cutting down on costs;
• and/or sell non-core assets;
• or selling shares.

in order to raise funds to ease cash flow. A business rescue expert might also discuss with you raising funds in some other way, by refinancing or increased borrowing.

It is likely to be beneficial to a successful business recovery strategy to discuss business turnaround with a business rescue expert. Selling assets and/or refinancing or increased borrowing may be the answer, but it is important to look at the reasons for the failure and what causes a business failure in the first place, so that your business turnaround plan doesn’t simply lead to an increase in debt and an inability to properly bring about company rescue in the long term.

Each business will need its own individual advice

There is no one formula for successful business recovery. All businesses have differing needs. It is advisable that the first step is to stabilise the business in order for a successful company rescue to take place.

This could mean looking at cutting costs, possibly some employee overheads. It should also involve defining a business recovery strategy to ensure that any cost cutting or increase in borrowing or, is worth doing in a business restructuring process.

Reviving a dying business requires proactive and strategic actions. Restructuring, refinancing, and turnaround management are potential strategies that can help avoid formal insolvency procedures. However, seeking legal expertise from lawyers who specialise in insolvency and corporate restructuring is crucial for navigating the complexities and ensuring the best outcomes for the company. If your business is facing financial difficulties, it’s essential to act promptly and seek professional advice to explore the available options for company rescue and turnaround. Remember, it’s never too late to take action and turn the situation around.

1. Act Promptly: Recognise the signs of financial distress early and take prompt action to address them. Delaying action can exacerbate the situation and make it harder to revive the business.
2. Seek Professional Advice: Engage lawyers or other financial experts who specialise in insolvency and corporate restructuring to guide you through the process and explore all available options.
3. Review and Revise Business Plan: Conduct a thorough review of your business plan and make necessary revisions to align with your current financial situation and market conditions. Update financial forecasts and budgets accordingly.
4. Cut Costs: Identify areas where costs can be reduced without compromising essential operations. This may include renegotiating contracts, eliminating unnecessary expenses, and improving operational efficiencies.
5. Increase Cash Flow: Implement measures to improve cash flow, such as accelerating payments from customers, negotiating better payment terms with suppliers, and reducing inventory levels.
6. Communicate with Creditors: Maintain open and transparent communication with creditors, explaining the situation and proposing realistic repayment plans or debt restructuring options.
7. Explore Refinancing Options: Work with financial experts to explore refinancing options, such as securing additional funding, renegotiating existing debts, or obtaining credit facilities to improve your company’s liquidity.
8. Focus on Sales and Marketing: Implement effective sales and marketing strategies to increase revenue and attract new customers. Consider diversifying your product or service offerings to capture new markets.
9. Engage Employees: Communicate with your employees about the financial situation and involve them in finding solutions. They can provide valuable insights and support in implementing changes.
10. Monitor Progress and Adjust: Continuously monitor the progress of your company’s turnaround plan and be prepared to adjust strategies as needed. Regularly review financial performance and make necessary changes to stay on track.

Remember, every business situation is unique, and the best strategies for saving a business from insolvency may vary. Seeking professional advice and taking proactive measures can significantly increase the chances of reviving a struggling business and avoiding formal insolvency procedures.

In conclusion, taking prompt action, seeking professional expertise, and implementing strategic measures can help save a business from insolvency. By following these top tips and working with experienced lawyers or financial experts, you can increase the chances of successfully reviving your business and securing its long-term viability.