Why Early Intervention is the Key to Saving Your Business

Statistics show that around 60 per cent of businesses don’t make it past the first three years – which is why it’s important to take action early should there be any signs of financial stress.

These years are key for any new business to determine its path to success. This path has many twists and turns and the likelihood that the cash flow dries up is pretty high. When this happens and the creditors come knocking, the only plan of action seems to be to seek the help of an insolvency practitioner to affect liquidation.

Unfortunately, many company directors procrastinate on when they approach an expert, and often it is too late – assets have dissipated and equity has run out, and there is not enough time to effect a restructure and get a good outcome for the business.

A large part of the problem is there is a lot of advice out there surrounding insolvency, but not enough of it is good advice coming from a trusted advisor and practitioner. Directors who do not enlist the help of an expert early and get the help to restructure their business could not only affect knock down liquidation for their business, but could also spell certain doom for the survival of the business.

Early indicators of potential trouble are becoming increasingly sophisticated. Banks watch “account behaviour” very closely (such as the balance deteriorating month on month).  However the usual signs are simply pressures from creditors such as suppliers and the Australian Taxation Office.

Without aggressive early intervention and communication, however, including the use of turnaround experts to oversee an increasingly complex range of issues, organisations will continue to pay more for restructuring the closer they get to insolvency.

Early intervention can be a tough decision, especially if a company is still making a profit. However, to try and avoid insolvency and eventual liquidation, early intervention coupled with a good strategy to improve operational processes and the drive to initiate change goes a long way. Focusing on profit improvement through timely operational and financial restructuring is key to help raise up a still solvent organisation.

DISCLAIMER: All content published on this site constitutes general information only and does not take into consideration your personal circumstances. We have used best endeavours to make it as accurate as possible at the time of publication, but be aware information can change rapidly. You should speak to one of our panel members to understand how this information might relate to you.

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Insolserve Pty Ltd, PO Box 2, Grange, QLD 4051 ABN 97 623 054 679

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DISCLAIMER: All content published on this site constitutes general information only and does not take into consideration your personal circumstances. We have used best endeavours to make it as accurate as possible at the time of publication, but be aware information can change rapidly. You should speak to one of our panel members to understand how this information might relate to you.

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Insolserve Pty Ltd, PO Box 2, Grange, QLD 4051 ABN 97 623 054 679

Privacy Policy | Terms & Conditions

DISCLAIMER: All content published on this site constitutes general information only and does not take into consideration your personal circumstances. We have used best endeavours to make it as accurate as possible at the time of publication, but be aware information can change rapidly. You should speak to one of our panel members to understand how this information might relate to you.

James Flaherty

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