Are you are a professional advisor to a distressed business?

Whether you are a chartered accountant, certified accountant, business lawyer, professional business advisor, financial packaging advisor or management consultant you will, inevitably come across distress situations.

What should you do when faced with a distressed company, directors and managers under real pressure?

If you really believe in the business’s viability and want to see some the company helped our suggestion is to follow the same logical approach as the director when using this site. Of course the ability for the company to pay your fees has to be closely examined and a concise approach will mitigate costs.

If the business appears to be beyond saving, common sense would dictate that it is better to cut losses and advise the directors to quickly take advice from a turnaround or insolvency practitioner.

Bear in mind that most small business’s find making decisions very difficult. It seems to be easier not to take a decision for risk of getting it wrong. As professional advisors it is our duty to help the directors gather information, give appropriate advice and point them down the decision making process.

However, most advisors we are in contact with express a fear that they do not understand the various techniques - the word insolvency is associated with failure and most people wish to avoid that. So to improve your knowledge of the steps and techniques

Advisor’s Suggested Steps

• Establish if the business is viable if the current difficulties could be removed.
  
  
• Establish if it is insolvent - see this guide to do this
  
  
• Look at the warning signs page
  
  
• If they have legal actions against them, do you and the directors understand these actions? If not look at legal actions page and ensure they are reacting properly.
  
  
• Build a fast statement of affairs - essentially just an update estimated balance sheet showing assets, creditors and debtors. This helps establish the current position
  
  
• Look hard at the business and its niche within its marketplace.
  
  
• Is the market expanding or contracting - can you see if the business’s product / service is viable?
  
  
• Does the company have a sales and marketing policy?
  
  
• Does it just need a cogent plan to get out of the sales mire?
  
  
• Are the managers up to the job? Would some changes really help?
  
  
• Go to your objectives page and decide with the directors what they want to do with the business.
  
  
• With our professional help and removal of pressure will they have a fair chance of succeeding with a rescue?
  
  
• Should they consider closure to protect creditors and themselves?
  
  
• Could you help with refinancing with the bank or other debt providers?
  
  
• Then go to your options page and learn about the available options for distressed directors
  
  
• Dispassionately examine the business and then consider the options.
  
  
• Look at the disadvantages and advantages of each option: could they use a CVA, Administration, liquidations, trading out, refinancing
• Think about each technique - what would it do for their business?
  
  
• Obtain further information from the company and meet with directors
  
  
• Help them decide on a course of action
  
  
• Convincing them to act - whether closure or continuation - is vital

If you want more detailed assistance or information, email us, use the contact form or call 0800 9700539. We will need the following information to assist us in determining whether it is a suitable case for our assistance or whether closure is the most sensible option.

Brief information we will need.

• Up to date creditors list
  
  
• Debtors list
  
  
• Current bank and other secured lender’s position
  
  
• Last audited accounts
  
  
• Most recent management accounts.
  
  
• We will be happy to provide a confidentiality statement to protect the advisor/client relationship.
  
  
• We have many types of finance available and investors looking to get involved with distressed businesses, call us now or fill out contact form. New finance may obviate the need for radical action - study refinancing options.

We do not need lots and lots of paper or faxes - we need a simple synopsis of the current position, a view on viability and what the directors want to do. We are happy to answer - free of charge - any sensible query. Call now for a free chat about the company’s problems.

We look forward to helping your client.