James Sleight ,of Ge­of­frey Martin & Co, on spot­ting the warn­ing signs of a strug­gling busi­ness

Yorkshire Post - Business - - FOCUS ON SMES -

1: If your sup­pli­ers are tight­en­ing your credit terms, press­ing for cash or even threat­en­ing en­force­ment, this is a key warn­ing sign that your com­pany is strug­gling. Hav­ing a good re­la­tion­ship with your sup­pli­ers is key.

2: Be up­front with sup­pli­ers if you’re hav­ing short-term dif­fi­culty in meet­ing bills; most will be ac­com­mo­dat­ing. Prob­lems, and le­gal threats, usu­ally start when sup­pli­ers haven’t heard back from you and are wor­ried that they won’t get paid at all.

3: As well as sup­pli­ers, you need to be sure that you pay your VAT and PAYE; again, be up­front with HMRC and you’ll usu­ally be given some lee­way on pay­ments.

4: Where ex­tended terms are agreed make sure you don’t over prom­ise what you can de­liver oth­er­wise you will quickly erode away any con­fi­dence with your key trad­ing part­ners.

5: On the flip side, not get­ting timely pay­ment debtors can also be a clear sign that your busi­ness is strug­gling.

6: How­ever, if your cus­tomers don’t pay, that makes it dif­fi­cult to pay sup­pli­ers, who may re­strict ser­vice to you, which in turn leads to prob­lems. You need to know ex­actly who your debtors are and how long they have owed you money for; this makes it eas­ier to chase.

7: If you don’t un­der­stand why re­stric­tions are tak­ing place some­times it is a good idea to have your credit rat­ing checked to see what oth­ers can see about your busi­ness pro­file.

8: Many own­ers of new and grow­ing busi­nesses don’t have for­mal man­age­ment training. Some­times this means that the key mem­bers in a busi­ness may not have the skills needed to run a grow­ing busi­ness, which may lead to is­sues

9: Have a look at bring­ing out­side help. This could be as sim­ple as hir­ing a book­keeper to fo­cus on the key, reg­u­lar fi­nance tasks, or per­haps bring­ing in a nonex­ec­u­tive di­rec­tor who can pro­vide a strate­gic overview.

10: Per­haps the big­gest warn­ing sign is if you con­sis­tently owe more than you are owed,

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