Please read the supplement by clicking above. This flat lining economy has resulted in thousands of businesses that are carrying large debts, no growth or declining sales but are managing to continue to trade. Good people are tied up in these unprofitable companies that means that other more lean companies are having to work harder says John Moulton of Better Capital. This situation is not helping the economy recover and grow.
Mild cashflow problems? Serious threats by creditors? Winding up petition threats from the tax man?
It is, in our view, an abdication of management responsibility not to ACT when the pressure is building. Hence the lack of confidence that banks may have in the board.
When pressure from creditors starts to mount and the threat of legal action comes along, then there is a powerful alternative to terminal insolvency. Keith Steven writes that a company voluntary arrangement is often the best option for companies that are struggling with debts and need to stop firefighting and allow the turnaround to get under way and allow existing or new directors to get on with running the business. Read the Telegraph article here
Of course, business turnaround needs more than just a single mechanism like a company voluntary arrangement but also the need for turnaround experts in finance and operations. Management often need to change and they should use tools like daily cashflow forecasts, get up to date financial reporting from experts like Insight Associates, also featured in the supplement and set out a recovery plan with stakeholders such as banks, employees, creditors, investors and shareholders. Often it is necessary to bring in interim managers to help them move forward. KSA Group has close connections with experienced quality people who can help in this regard.
Phone us on 01289 309431 for details.