Businesses in Crisis
Distressed businesses typically show the following characteristics:
- Loss making
- Calamitous one off event
- Deteriorating cash position
- Increasing creditor pressures
- HMRC tax arrears
- Pressures from the bank
- CCJs, winding up petitions
What People Say About Us
Chairman J Scott (Thrapston) Limited
Some of our Solutions
- From the many years of working with companies suffering severe cash flow problems we have developed a series of stages by which companies can return to financial health
- Situation Analysis – viability, core business, cash situation, key issues causing waste and inefficiency
- Stabilisation – generate liquidity with current resources, negotiate, cost cut
- Time to pay agreements negotiated with Inland Revenue
- Action plan – formulation of a series of measures to eliminate the issues which resulting in loss making
- Business Plan – produce a business plan with financial targets which addresses all underlying issues – to aid understanding and support of third parties such as banks, HMRC
- Measure – establish monthly reporting and regular measurements to monitor performance
- Restructure/Refinance – as required depending on the scale of problems
The First Port of Call
The First Port of Call for companies showing signs of distress should be a turnaround specialist who will focus immediately on trying to save the business and avoid all the disruption that an insolvency process causes.
Independent Business Review
The major lenders often require a business with cash flow difficulties to pay for an Independent Business Review (“IBR”) whereby an accountancy firm on the banks “Panel” will perform a review of the status of the business.
A cost effective alternative is to request a root and branch review of the business which not only identifies the current status of the business but also delivers a road map of detailed actions, initiatives and improvements to return the business to rigorous good health and restore the confidence and support of the lender.
We are turnaround and transformation specialists who are accredited by all the major lenders to perform such valuable exercises.
Unpromising Starting Point
Perversely a cash crisis can sometimes be the best thing that can happen to an under performing company.
The crisis instigates a review of the business and what its core values are.
This unearths a series of issues which have not been addressed for years and sometimes not even previously identified.
The resultant wide ranging changes can completely revitalise an organisation and we often see companies go on thereafter to perform better than they ever did before.