How can I reduce the risks of insolvency?

Frequently Asked Questions

The key to reducing the risk of becoming insolvent is by keeping an eye on your cash flow, and ensuring your finances and their records are kept in good order – this can flag potential issues to you at an earlier stage, potentially enabling you to put measures in place. Your key business advisors can help with these measures and could save you money in the long-term. Whilst many businesses are somewhat protective over their finances, it’s often a good idea to keep your bank close and build a good relationship with them. If they know the background of the business, and can understand that there is a “blip”, they’re more likely to be on your side should you run into financial difficulties. Whilst you can demonstrate how your business can turn things around, it’s only going to work if you know your industry and your marketplace. There are many external factors that can significantly influence how your business performs e.g. if your marketplace is shrinking (either generally or simply your market share is reducing due to competitors) or if one of your suppliers find themselves in financial difficulties. It’s only by knowing your industry intrinsically that you’ll know how you’re performing against your competitors.