This is not a complete guide to the actions you should and should not take, but it will hopefully guide you through this very difficult time.
There is one golden rule -
If an action or step seems wrong or smells wrong - it generally is!
Think hard about what your creditors might think - extenuating circumstances may seem reasonable at the time, if the company fails and you have no record of why actions were taken it is less likely that the actions will look correct.
- Follow our guides to your options. And talk to us.
- Build a detailed picture of the company's financial position.
- Note down decisions taken. Where difficult decisions need to be taken outside meetings, write a note to the company saying why you took it. People make mistakes, but if the decision taken was reasonable, show why it was taken at that time.
- Build a detailed picture of the company's sales prospects.
- Build a snapshot of the company's assets and liabilities (all of them including you).
- Hold regular management and board meetings, minute the decisions taken and file the minutes carefully (this seems common sense but is rarely done in our experience).
- Be honest with yourself, your employees, your customers and your creditors.
- Formulate an action plan, get your team to buy into it.
- Take advice from professional advisors.
- Talk to your bank.
- Consider even the most unpalatable options.
- Be determined.
- Bury your head to the problems - reading this website is a good start!
- Guess, say financial figures don't matter, spend lots of time building detailed accounts - they are history.
- Blame everybody else.
- Ignore legal paperwork.
- Prioritise creditor issues incorrectly.
- Make promises to creditors that you cannot possibly keep. Remember, while you may expect to be able to pay PAYE back over time, you will have to pay ongoing debts and probably cash will not come in as fast as you think.
- Hide the issues from your people - they are the business, not just you.
- Talk to lots of people and procrastinate.
- Keep changing plans.
- Lie to the bank.
- Ignore closure as a real possibility.
- Be unrealistic.
Most of all, DO talk to experts in turnaround. Call 0800 970 0539
Request our FREE 40-page guide for worried directors
Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.