With the impact of the pandemic on businesses everywhere, 2020 saw an unprecedented rise in the number of companies unable to pay their debts and going into administration as a result.
Should you find yourself in this difficult position, here are several actions you can take before you decide to wind up your business.
1. Analyze What’s Gone Wrong
While many businesses failed due to Covid, others flourished. Take some time to analyze exactly what went wrong in your case. Was it a lack of a long-term plan? Failure to respond to changes in consumer behavior? Lack of certain critical business skills, such as marketing or financial management?
Ask yourself whether it is too late to address any of these types of issues.
2. Understand the Implications of Putting Your Company Into Administration
Consider not only the short-term implications but how they may affect you and your family over the longer term. To find out more about company administration, read this guide by the Insolvency Experts.
3. Get Expert Advice
If you believe there’s still a chance to save your business, the next step is to obtain expert advice to help you put any rescue plan into action. Could you restructure your debts and reach agreements with your creditors without the need for administration? Could securing a major new contract or breaking into an untapped market help you survive? Taking advice from an expert who can provide an objective assessment of how realistic any recovery plan might be is what’s needed to point you in the right direction.
4. Consult Your Employees
If your company has been struggling, the chances are that your employees will already have realized, and be worried about their future. It’s only fair to let them know what’s happening, and what could happen, so they can make their plans and protect themselves and their families. This is the time you need to step up as a leader, and how openly you communicate will have an impact on your reputation for years to come.
5. Family
If your company goes into insolvency, there’s no doubt that it will have a significant effect on your family. Their sense of security is likely to be severely shaken, and there may be consequences for their standard of living as well as their perception of their place in the community. Their worries can add to the stress you’re already feeling. The best option is to be as open as possible about what is going to happen, at each step of the process, as emotional support will be invaluable for everyone involved.
6. Make a Plan for Your Future
When you feel that your business has failed, and your sense of yourself is being severely tested, it can be hard to focus on the future. But this is what you need to do. Insolvency, while painful, can also represent the opportunity for a fresh start. So, while facing your current situation head-on, take it as an opportunity to learn from your experience and focus on how you can rebuild your future on a strong and secure footing