Warning Signs Your Business Could Be In Trouble!

It usually takes time for a business to become insolvent – and there are almost always clear warning signs of impending business insolvency. Looking honestly at what’s happening in your business is the first step towards business turnaround – and the sooner you identify the problems, the higher the chance of a successful solution for your small business. Administration and liquidation can often be avoided.

Here are some of the warning signs:

Missed tax payments If you miss PAYE or VAT payments because there are no immediate consequences to non-payment (missed payments to HMRC are often the first clue to business bankruptcy).

A deteriorating relationship with the bank If you have no funds in the business bank account to pay your staff and suppliers, and your bank overdraft is always at its limit. If the bank has reduced your overdraft facility or asked for additional security or personal guarantees.

Deteriorating relationships with creditors If you are routinely late paying creditors, only paying once you have received final demands or warning letters. If you regularly avoid speaking to creditors on the phone, because you don’t want to deal with their requests for payment.

False hope If you are living in the belief that one more big sale or contract or payment will solve your cashflow situation.

Lack of planning and control If you don’t have a business plan or a current year budget. If your teams, management and board don’t meet regularly to review and plan ahead. If there are no policies and internal controls in place or they have fallen by the wayside. If work doesn’t get done because of lack of focus.

Directors overspending If directors are taking disproportionately high salaries and claiming big expenses.

Increased stress levels If you are constantly fire fighting and feeling stressed. If management is regularly arguing and apportioning blame. If morale is low and there’s a high turnover of staff.

Avoidance If you are avoiding looking at things or talking to people because you are scared of what you’ll see or hear. If you are avoiding going to work.

Recognizing one or more of these signs doesn’t necessarily mean you are heading for business insolvency but it does suggest there may be problems that need addressing. And in today’s climate, it’s dangerous to ignore any warning signs. If you are knowingly insolvent and continue to trade, you may be held legally liable for business debts.

What action should you take?

Talk to the experts. At Touch Financial, we specialise in getting small to medium businesses the help they need to deal with their financial problems. Ideally, that means restructuring or refinancing a business to get it trading successfully again.

We will work with you to understand your business, then introduce you to the lender, insolvency practitioner or SME business administration service that is best suited to advise you about business turnaround. Having the right expert support is key to a successful outcome.

Touch Financial works with a panel of more than 20 lenders – some of whom offer exclusive rates available only through us – to find the best possible deal for your business. We also have access to lenders that enable you to try Factoring or Invoice Discounting facilities on a trial basis. We’ll do all the legwork to find the best solution for your circumstances. And our service is completely free – we’ll receive a commission if you choose one of our providers’ products (but you are under no obligation to do so).

You’ll get expert advice from Touch Financial. And the sooner you seek professional advice, the better the chance of getting your business back on a viable footing.

Contact one of our experts now on 0845 388 9725.

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