The current economic climate can punish failure very harshly in the sphere of business, particularly when it comes to small start-ups. Without a flexible, creative approach, many businesses find it difficult to juggle their outgoing costs and maximize profits. However, there are plenty of options that should be explored if your business does run into financial difficulty. It can be an extremely stressful time for business owners and managers, but this doesn’t mean that your company can’t come through it, and come back stronger and more profitable than ever before.
Honesty is the Best Policy
As an owner or manager, you may feel as if the responsibility for financial troubles rests solely on your shoulders. It can be tempting to pretend as if there is nothing wrong so as not to worry employees and investors, but honesty really is the best policy. It’s essential that you face up to the money that your business owes so that you can start to plan an effective strategy for dealing with debt or falling sales figures. Investors and employees can be informed of the current situation in a calm and collected way, before being presented with or involved in the proactive strategy for turning things around. It’s important that those in leadership positions stay strong and committed to improving the situation, no matter how stressful the situation seems.
Consider a Company Voluntary Arrangement
Instead of going into administration or liquidation, your business should consider a Company Voluntary Arrangement. This allows the directors of the company to retain ownership and the company shareholders to remain in control of their assets, while involving the services of a Licensed Insolvency Practitioner. CVAs are flexible arrangements, where the company director comes to agreement with creditors regarding the timing and scale of debt repayment. This arrangement can be tailored to suit the needs of any business, and once it is agreed on, it is filed with the Court and with Companies House. The agreement is then legally binding and a supervisor is appointed to make sure that is adhered to. The key benefit of a CVA is that the company can continue to trade and hopefully turn the financial crisis around. The arrangement is kept private so that there is no negative publicity generated and customers are not informed. Your company can continue to do business as usual. If you’re interested in finding out more about Company Voluntary Arrangements, contact a specialist firm like Gibson Hewitt.