Being at the helm of a company facing a financial crisis is not a position that any business boss would want to find themselves in. The challenge can be extremely testing but the decisions taken by directors during these tough times can go a long way to deciding what a struggling company’s eventual fate will be.
Here’s a look at some action points that can help turn around a company that’s been brought to the brink of failure and insolvency.
1. Step above the fray
For a business leader whose company is facing serious financial difficulties and creditor pressures, doing less can often be more beneficial than doing more, at least if it means a director is able as a result to take a broader view on what their company’s issues really are. In short, doing more of the same and hoping for the best is unlikely to succeed and directors need to take whatever time they need to think strategically about what changes they might make for the better.
2. Sell off non-essential assets
When insolvency is a realistic prospect for a company, its non-essential assets should be sold to raise money and to keep that prospect at bay for as long as possible while more over-arching solutions are sought. Taking these steps can be difficult for any number of reasons but liquidating assets that aren’t integral to the running of the business buys directors time that can be absolutely inviable in these situations.
3. Make redundancies where necessary
Making redundancies and ending long-established relationships with suppliers can be extremely tough for company directors but they can be unavoidable and absolutely necessary. The imperative for company directors is to maximize the potential for their operation to stay in business and it is an unfortunate reality that cutting jobs can often help improve the scope for sustainability of a struggling business.
4. Investigate all financing avenues
There are an increasing array of financial solutions available designed with the needs of companies facing insolvency in mind. These rescue options are often tailored towards operators within specific industries and they can save businesses from disaster in broad variety of different scenarios. What’s crucial from a director’s perspective is to ensure that no stone is left unturned when it comes to pursuing potential financing options that could make a crucial difference during difficult times.
5. Get advice from established experts
Company directors carry a lot of responsibility at all times, but that burden can be particularly tough to bear when the future of a company is on the line. Speaking to experts on the details of insolvency, corporate administration, and financial rescue, can help offer important clarity on key issues to directors in need of third-party guidance and impartial support.
Unfortunately, the truth is that even the best efforts of company directors will not always be enough to save a company when financial challenges are simply too steep to overcome. But bearing the above points in mind can help company bosses give their struggling businesses the best chance of survival and recovery.
*** This article was written by Mark Halstead and was originally published at EconomicVoice.com on March 18, 2016.
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RISE UP from these challenging times!
The Center for Global Best Practices invites you to attend this three-hour webinar entitled:
1:30 PM to 5:00 PM
Wednesday, February 10, 2021
This program is about rescuing your business by applying to your advantage the Financial Rehabilitation and Insolvency Act (FRIA law). Attend this training to learn the essentials of this law and understanding the processes of going through corporate rehabilitation.
If your business was doing well and making money before COVID 19 hit hard on your cashflow, this could provide you a solution to save and rescue your business that is now in danger of insolvency – in not being able to pay your liabilities.
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CGBP Team of Seasoned Practitioners and their Topics:
• Essential Aspects of the FRIA Law
by Atty. Nilo Divina
UST Law Dean, Founder & Managing Partner Divina Law
• An Executive Briefing on Corporate Rehabilitation from A-Z
by Bienvenido M. Araw II
3 Times Receiver
• A Guide to Prepare A Corporate Rehabilitation Plan
by Grace Socorro Larceña, CPA, MBA
5 Times Receiver & Expert Court Witness Preparer of Corporate Rehabilitation Plan
WEBINAR FEE:
Training investment inclusive of an e-certificate to be emailed to each attendee:
- P 2,980 (when you register and pay on or before January 10)
- P 3,880 (when you register and pay after January 10)
*Optional: Add P450 for a printed copy of a certificate of attendance inclusive of delivery charge
You may also find of interest other Best Practices Programs via ZOOM:
1:30PM to 2:30 PM
Wednesday, September 30, 2020
• Best Practices Strategies in Collecting Delinquent and Bad Accounts
2:00 PM to 5:00 PM
Thursday, November 17, 2020
Pre-registration is required. To enroll, visit the website www.cgbp.org
Contact Person:
Kyra Villanueva
Program Leader
(+63 949) 414-3935
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