How learning from failure can be the making of a business
In a recently published article in Business Insider, Business Recovery Partner Jason Elliott looks at how learning from failure can be the making of a business.
No one will be surprised to hear that getting introduced to a distressed situation at an early stage is vital to ensuring that all options can be explored and the chances of rescue maximised.
Over the years we have been presented with situations that have been allowed to go on for too long and have unfortunately tipped over the precipice, rendering turnaround either impossible or very restricted.
Occasionally the delay is down to inadequate financial information but in a day and age when basic Management Information software tools are available free of charge this is less common.
More surprising is when it simply comes down to the board of directors not wanting to admit that there is a problem and believing (sometimes blindly) that it will turn itself around. They are concerned about reputation amongst their peers or, quite simply, that as soon as they are seen to be taking such advice the funder/bank will freeze all monies and force it into liquidation. Sometimes it’s as basic as they believe that an advisor only wants to achieve a fee for himself and that he/she can pose more of a risk than a solution if brought in.
As such, they continue to trade and regularly take it too far, by the time we enter the fray our options are massively limited.
Nothing could be further from the truth, my experience is that the funders are supportive and will work with businesses to achieve solutions and, provided you use a reputable qualified adviser, they will work in conjunction with the funder to ensure the position is managed with a view to achieving the best solution.
I have lost count over the years the number of times this has happened, but when I look at the main barriers that I still see, even in today’s day and age, in achieving a complete or partial turnaround of a business this is the one that comes up again and again.
- Receiving regular Management information is important as is reviewing it, checking and understanding what it actually tells you about how your business is performing.
- Use an accountant who has the skillset to assist if you have concerns. Don’t just give them your numbers annually and ask them to put them into statutory accounts format. More importantly seek out their advice.
- If you believe that you require professional assistance due to financial distress revert to your accountant or solicitor for any recommendations, do not just “google” and settle for the first name that you see.
- Do this as soon as you believe there are financial issues, not when everything is coming crashing around you. This will ensure that all options can be carefully considered and no forced or knee jerk solutions are necessary.
The information was correct at time of publishing but may now be out of date.