Insolvencies

It is indeed scary times for many small business owners.  A colleague of mine last year advised several clients that if they think that administration or worse may be a possibility then they should sit down and develop a plan to position the business with a positive cashflow.  If the business must make cuts then “cut once and cut deep”.

I encourage all businesses to develop a plan based around regular internal reporting.  Ask the questions:  What commitments are there over the next two weeks?  What receipts can be counted on over the same period?  Does performance match the budget (which means most need to set a budget)?  How much risk is the business currently exposed to?  What single event can cause a major cashflow crisis?  Is there is steady trend towards reduced cashflow and capacity to meet commitments?

Act now but don’t knee jerk – implement systems to make sure the business grows by learning.