Business Planning is critical to any company’s future.
Company rescue of an insolvent business can be very tricky as you are juggling so many dynamic challenges in a highly
charged and very often emotional environment. One of the very few good things to come out of these situations very often is I get the chance to see people evolve and change in a very short space of time.
When directors or sole traders fail and become insolvent others are very often affected. The definition of insolvency is the inability to pay your bills when they are due or simply that the liabilities outweigh the assets. If you put these definitions under closer scrutiny you will see the ‘bills not being paid’ will mean the vast majority of those creditors are businesses like you and I.
Over years it is not unusual for the business owner to establish a relationship and sometimes become friends and the subsequent inability to pay the bill can cause resentment as the situation becomes personal. Insolvency personal or company affects everyone within the business but also those creditors who do not get their bills paid and we should not forget that.
Employees who are made redundant due to company liquidation may get looked after by the government’s RP1 scheme but the trauma of losing your job unexpectedly will impact on their lives too.
The sense of failure is palpable when you meet these directors who once had a great idea and dream only to have the dream dashed. Unfortunately very often it is the directors themselves who will put their hand up and admit to the lack of training and just how unprepared they were to venture into business alone. I am not aware of any free of charge Government training and development scheme that will provide the basics of starting up in business – if I’m wrong then please someone contact me so I can make the scheme more widely known. Wouldn’t it be great if before someone was allowed to start a limited company they had to sit a test? Or at least commit to a course of business modules and have them signed off by an appropriately approved Mentor programme monitored by Business Link. Unfortunately the Business Link that once was has been shut down for all intents and purposes as you are now diverted to anonymous government website.
We rescue businesses that have usually hit a brick wall of insolvency but very often the wall should have been avoided with a little forethought and planning. I was always taught if you’re failing to plan you’re planning to fail and that still holds as true now as it ever did. The good news is that if you have a solid detailed plan in place the chances of achieving success rise to around 95% or to put it another way if you don’t plan in your business you only have a 5% chance of success and avoiding the insolvency pitfalls.
Written by: Mike Smith