legal updates
Friday, 11 Apr 2008
difficult financial times
You can’t pick up a paper or watch a news broadcast these days without being reminded that our businesses are operating in a recessionary climate. Every business has to be prepared for change and careful planning will pay dividends during times of economic slowdown.
We can’t ignore the simple fact that when there are problems in the banking world, the “aftershocks” of those problems will be felt by the banks’ customers. For a variety of reasons, the banks have to safeguard their capital – and that means increasing their margins or parting with customers where either the risk is perceived to be too great or the return too little.
Plan ahead
It’s best to anticipate these potential problems and, if you can, work out strategies to resolve them. The earlier you start on this process the more time there will be to act.
The harsh reality is that not all businesses are going to survive, and those businesses closest to consumers are at greatest risk. There are a number of ways in which you can help your business:
- Keep a very close eye on its credit exposure.
- Review your terms of business – do they cover all eventualities in difficult economic times?
- Keep your ear to the ground. Market information on your customers can be very helpful. If faced with a customer about to go under who owes you money, get professional advice. You will not be without options.
And, if the worst comes to the worst…
If your business runs into difficulty, get professional help at the earliest opportunity. Apart from the risk of personal liability, the earlier you get help the greater the chance you will have of rescuing something.
If you need any further information or advice on this issue, please contact John Clarke, who is a licensed Insolvency Practitioner and an Accredited Insolvency Specialist.