Case study
Rural businesses in distress - control the controllables
Siann Huntley, Director and specialist in advising rural businesses.
Ites reassuring that much of my work with agricultural businesses in distress has been in a troubleshooting or advisory capacity, with very few resulting in business failure. This is reflected in statistics which show a low level of agricultural insolvencies compared with other sectors.
As the last two years have proven, all businesses are subject to forces outside of their control but this has always been the case for farming. Rural businesses are vulnerable to unpredictable conditions, where the weather can make or break a yield, disease can cause devastation, costs are highly changeable and consumer behaviours can re-shape strategy year on year. Additionally, agricultural business owners are currently navigating the impact of political changes including a dramatic overhaul to farming subsidies.
All these factors can easily put severe strain on cashflow and creditor pressure can quickly creep in, resulting in worry and uncertainty. Some agricultural entities remain unincorporated with owners therefore being personally liable for their dealings and, by nature, work and home life are intertwined. When a business is struggling, therefore, these factors only serve to add additional stress to the situation.
When a business is facing financial challenges ites easy to put it down to factors beyond your control. So control the controllables ites essential to keep close to your business, to regularly review the financial position, to identify risks, and to recognise the warning signs when times are hard. The farming community is resilient but even the best are not immune from unexpected challenges and solvency issues.
Acting early and putting the right plans in place can make all the difference. Contingency planning, open communication with creditors and lenders and taking advice from your accountant or a restructuring specialist like me are all positive steps that can help maximise the options available and enable owners to retain control and weather even the worst storms.
Leonard Curtis are well placed to offer advice and support when times are tough; please do reach out if these challenges resonate with you.
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