10 Warning Signs Your Business Is In TroubleIf any of the following apply to you it may be time to seek help with your business…

Introduction Broken down into 10 separate categories this isn’t just a ten point list, each point is broken down to cover things which could be glaring indications of a company in peril.

Each category covers a different aspect of business, read through the categories and if any of them apply asks what that means for you and your business.

This isn’t meant for easy reading, but as a list against which you can check if there is anything which could flag up potential problems that exist now without your knowledge or could arise in the future.

If it helps, why not tick, or count up as you read through this document.

There is some generalised advice at the end depending on what you discover.

Warning signs from your bankYour overdraft is always at the limit

Your bank always wants more information.

Your bank has returned cheques.

Your bank has refused to increase your overdraft.

Your bank refuses to provide a Loan.

Your bank has refused to provide a small firms loan guarantee scheme loan.

Your bank has asked for facilities to be reduced.

Warning signs from your bankYour bank wants to introduce investigating accountants.

Your bank asks for increased security.

Your bank wants personal guarantees.

Your bank wants to increase personal guarantees.

Your bank wants security against your own personal property.

I don't know how much they owe me.

I don't know how much the company owes the factor.

Your factoring company is reducing your advance.

They don’t seem to understand my business.

We can never get enough advance against my invoices.

They are advancing 75% against my invoices but disallowing lots of invoices.

They are too expensive.

They claw money back from me after the debtor has not paid in less than 90 days.

Warning signs from Factoring Companies

Warning signs from your creditors

Cash flow always tight so paying creditors is difficult.

Inefficient production - can’t get stock because you can’t pay creditors on time.

You can't get stock on time because you miss deadlines for payment of supplier accounts.

You cannot get new credit.

You cannot extend existing credit.

You don't meet agreed payment terms.

You have lots of failed deals with creditors.

Warning signs from your creditorsYou have had red warning letters.

You have had legal actions.

You are using lots of suppliers and spreading credit around.

You are always have creditors calling every day.

Your suppliers can obtain trade insurance against your company.

You have had visits by bailiffs.

You are having HMRC payment problems

Warning signs indicated by your debtors They just don’t pay on time.

You don’t know what your total debtors are.

Your company has concentration in 1 or 2 major customers (debtors).

Your accounts department only invoices periodically. You do not have a dedicated debtor collection function.

You don’t want to issue too many credit notes - although you know the goods supplied have been faulty, returned or under agreed quality.

Autocratic leadership – is it one person running the show?

The management team can’t perform because of:

Firefighting - you never get your work done;

Lack of information or wrong information;

Concentrating on non-essential issue;

Senior people seem paralysed into inaction.

Are you compartmentalizing problems, in other words do you deal with one creditor problem and ignore others.

Warning signs indicated by the management

The managers blame the… Bank

Creditors

Debtors

Accountants

Advisors

Everyone!!

There is no set business plan.

You don’t have regular management meetings.

You don’t have board meetings.

You don’t like changes.

Directors are taking big salaries and expenses but the business has poor profit margin.

You ignore advice of others and professionals.

You have an overdrawn director’s current account.

Warning signs indicated by the management

Essential details which remain unknown Gross Profit - accurately.

Costs - accurately.

Sales per month / per annum.

Orders taken.

Enquiries quoted for.

Bank balances.

Where 80% of work comes from.

Where 80% of profit comes from.

Your market – what are your competitors, products and threats?

The Key Statistics of the business

How many units of your product you make per day?

At what cost?

Essential details which remain unknown How many units you need to

make to break even?

How many enquiries do you need?

How many enquiries do you convert into sales?

How many people it takes to make your product?

What is your sales performance compared to last year, last month, budget?

What are your costs increases/decreases year on year?

How many new customers you have gained this year?

How many customers you have lost this year?

And why?

Signs Indicated By Your HMRC/PAYE details You are not paying deductions on time.

You have not filed monthly returns or paid the tax deducted.

You have had penalties.

You have entered into deals with the Revenue.

You have not managed to keep up with these deals.

You are well behind with tax paperwork – this is a failure to maintain a PAYE Scheme.

Taxes and other social security entry on audited accounts seems high.

Tax Collector pressing.

Debt recovery unit dealing with account.

Signs Indicated By Your VAT details

Not filing returns or paying tax on time.

Had surcharges.

Doing deals over time with the local VAT office.

Cannot keep up with deals.

Cash flow says you can repay far more than profits made.

Debt recovery unit pressing.

You feel that you are the only person who can make a decision in the business.

You cannot stand going into work on a Monday.

You breathe a sigh of relief when Friday night comes.

You don’t open your post.

You don’t take calls from irate creditors.

You dread the bank calling.

You cannot sleep.

You are falling out with those around you at home and/or at work.

You feel isolated or lonely at work.

You have used your own money to pay wages pay bills and are just waiting for the next big sales to pay it back.

Warning Signs Shown In And Around Yourself

Warning Sign: You Find Yourself Saying...

“The next big sale/contract/debtor payment

will sort the problem out!”

“I can’t see where/why it’s not working”

Final Thoughts. If You have been through this list, and make no mistake there are 100 entries not counting the causal references, there is a lot of things in there which may seem inconsequential or irrelevant but if you have been through the list and found…

How Many Did You Find? ‘A few that kind of apply to you or your business’ Things may not be too bad, but it’s no reason to relax, tighten up those loose ends!

‘A dozen or so that seem like they describe parts of your business’ Things probably feel worse than they are, but realistically If you knuckle down and give a little extra

you should find it to be recoverable.

‘A good number / half or more which you can related almost directly to’ It’s time to start taking action, your business may be in dire trouble and any delay in seeking

professional advice could see your personal life being affected if it isn’t already

‘Nearly all of these can be seen in some way when reviewing your business’ You have passed a critical stage, realistically you should now be working on an exit plan rather than

attempting recovery. Seek advice immediately.

We hope there is something in here that you may not yet have thought about which could help your company begin recovery efforts.

We always encourage that if your business is beginning to present problems that rather than wait or try to let things sort themselves out that business owners should do all they can to seek help from specialists

Your business advisor at your local bank is always a good bet on where to start and there is a wealth of information available on the internet and on our website: www.forbesburton.com

If your business needs help, do all you can to get the best help available to you. Today.

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If you would like further advice regarding company closures or would like to take advantage of our 30 minutes FREE consultation to discuss your business; call today to speak to one of our experienced advisors.

Don’t risk wrongful trading it could lead to personal action being taken against you, even to the extent of the loss of your home or bankruptcy. Take the correct steps to move forward with your life.

Call the experts in complete confidence on 01472 254914.

If your business is in trouble get in contact with us now…Call us today on 01472 254914

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