Warning signs your business may be in trouble

In today’s changed environment, many viable businesses are struggling. COVID-19 has caused massive cash flow upheaval for many businesses, and the reality is that we will see an exponential increase in the number of companies that are forced to cease trading due to insolvency over the next 12 months. 

Tomorrow’s survival depends on today’s decisions.

It is undoubtedly true that some of these businesses can be saved by taking the right advice at an early stage. The key to a successful turnaround is to act fast. Even if there is no alternative to insolvency, acting early can reduce the overall level of business liabilities and reduce the risk of personal claims against the business owners later on.

It can be difficult when running a business to spot the early signs of trouble. Set out below is a list of the warning signs and pointers which may indicate that there is a problem. Whilst each one on its own may seem innocuous, the more of them that apply to your business, the greater your need to consider whether your business is in danger of insolvency.

Remember: These signs do not automatically mean that your business cannot survive. Often, with the right advice, a business can be restructured and put on a much sounder footing. 

• Are you constantly using 100% of an overdraft facility?
• Have you had payments returned in the last 12 months?
• Has the bank refused additional facilities?
• Have you considered mortgaging your family home just to stay in business?
• Are you being sued for money owed?
• Have you recently lost and not replaced a large customer?
• Are your last audited accounts more than nine months old?
• Have you accumulated tax arrears and late payment charges?
• Are you having increased difficulty collecting money from debtors?
• Are you experiencing difficulty being supplied?
• Are your co-directors seeking to retire?
• Are you losing staff faster than you can replace them?
• Is your company credit card in arrears?
• Have you considered invoice discounting your debtor book?
• Are you personally earning less money than some of your employees?
• Are you experiencing difficulties replacing old vehicles, computers or equipment?
• Has the Sheriff written to you or visited you in the last six months?
• Does the bank want to convert your overdraft to a term loan?
• Does your head say speak to someone, but your heart says battle on?

If you answer yes to any one of the above, your next move should be a call to Crowe to review your options.

Crowe’s corporate restructuring and insolvency team have been helping Irish businesses weather storms for over 80 years, and we can help you. We help many business owners step back, take stock and find the right solutions to ensure their business succeeds. 

Please contact a member of our restructuring and insolvency team if you wish to confidentially discuss any challenges your business may face and receive a no-obligation consultation.