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Richard Pinder comments for Vision magazine
Glazing businesses face market challenges just like any other, but what steps can you take to protect from current and future economic headwinds
The glazing firms we are advising tend to be dealing with historical debt and are therefore susceptible to fluctuations in their sales pipelines. Companies with a high number of employees are also especially vulnerable - increases in national insurance contributions and the minimum wage have a major impact. When you consider a lot of these businesses are running on tight margins, it can often be the straw that breaks the camel’s back.
SEVEN KEY CONSIDERATIONS:
1. Don’t bury your head
It’s very easy to fall into the ‘hoping for the best’ trap, as business owners are naturally optimistic, and the alternative is too concerning to contemplate. It’s essential to take stock of the situation then bring together the relevant people to review the strategy and decide what needs to change. This needs to be done at an early stage of any distress.
2. Forecast, and then challenge it
Regular forecasting, particularly cashflow, is important for any business. Once drafted projections are an extremely effective guide to developing strategy and managing day to day operations. Regularly review and challenge forecasts to establish how you can bridge any gaps in your cashflow.
3. Act quickly when you see trouble ahead
The longer it takes to acknowledge difficulties, the quicker they accelerate, and the more problematic they become. If caught unawares, often by the time the ‘cashflow crunch’ hits and creditors are chasing for payment the options for remedial action reduce.
4. Ask for help
Nobody should be afraid of asking for help, there is plenty of trusted support available from qualified professionals, including Leonard Curtis, and we have a very open-door approach. More businesses could be saved if issues are taken on board and specialist advice sought early.
5. Be a good communicator
Once you have identified the cause of the distress and developed a plan to deal with the situation, communicating well with employees, customers and suppliers will help turn a distressed situation around. So, knowing what to say and when to say it is important and part of the guidance we can provide.
6. Engage with lenders and creditors
The simple advice is to engage with lenders and creditors at an early stage, especially where difficult messages need to be conveyed. If you make a promise to pay later as part of a deferral arrangement, stick to it, otherwise, your credibility may be damaged and confidence in your ability to manage the situation is lost.
7. Don’t be afraid of insolvency
Confusion surrounding the insolvency process - and fear of repercussions from seeking advice from an insolvency practitioner - means that many owner managers leave it too late to get help. The key thing to remember is as cashflow pressures increase your options typically decrease. Identifying the warning signs early often means we have more options available and sufficient time to implement them.
Our priority - and that of most restructuring firms – is always to try to save a business if possible. Where we are consulted early enough, we can often develop a practical strategy to put the company back on a steady footing. Whether that be sourcing new finance, arrange a time to pay with HMRC, make informal payment plans with creditors, start communications with creditors, or operational restructuring.
Read the article in Decembers edition of Vision Magazine here.
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Leonard Curtis is a trading style of Reach Commercial Finance Limited, registered at Riverside House, Irwell Street, Manchester, M3 5EN. Company Register number is 09056450. Reach Commercial Finance Limited is authorised and regulated by the Financial Conduct Authority, FRN: 753686. Reach Commercial Finance Limited is an authorised credit broker and not a lender. We work with a an unrestricted number of lenders to find a potentially suitable arrangement for your consideration. ICO registration ZA069234 and you can check via www.ico.org.uk. We will receive commission from lenders. Different lenders pay different amounts depending on different commission models. For transparency we work with the following commission models: fixed fee, fixed rate of commission, percentage of the amount you borrow and rate for risk (this is based on the risk profile of the business). Further details of the commission model, calculation and amount will be disclosed to you throughout your customer journey. Privacy notice.
Leonard Curtis Legal Limited is a limited company, registered in England and Wales with registered number 09820186. Registered office: Riverside House, Irwell Street, Manchester M3 5EN. Leonard Curtis Legal Limited is registered with the Solicitors Regulation Authority with number 626004.