Keep fight­ing a bit longer

HAVE BREATH­ING ROOM How­ever, there is a price to pay and the suc­cess rate is of­ten dis­ap­point­ing.

The Citizen (KZN) - - BUSINESS -

pre­sented to stake­hold­ers, mainly cred­i­tors, who must ac­cept the plan be­fore the process of sal­vaging the busi­ness be­gins.

Busi­ness res­cue sounds like a fan­tas­tic tool to buy time. How­ever, it comes at a price which could be more costly than the fi­nan­cial cost of busi­ness res­cue.

The Act stip­u­lates a busi­ness res­cue prac­ti­tioner must be ap­pointed by the com­pany. The prac­ti­tioner must be a le­gal, ac­count­ing or busi­ness man­age­ment pro­fes­sional who is pro­fi­cient in fi­nance. Ad­di­tion­ally the prac­ti­tioner must be ac­cred­ited and li­censed by the Com­pa­nies And In­tel­lec­tual Prop­erty Com­mis­sion.

It is the role of the prac­ti­tioner that might un­set­tle a num­ber of en­trepreneurs.

Es­sen­tially the prac­ti­tioner is ap­pointed to re­duce the com­pany’s debt bur­den, al­low­ing it to re­turn to nor­mal op­er­at­ing cir­cum­stances. To achieve that, the prac­ti­tioner needs con­trol over its af­fairs.

The prac­ti­tioner is re­garded as an of­fi­cer of the court and given full con­trol of busi­ness af­fairs, even to the point of strip­ping away some of your power. All the ma­jor de­ci­sions you would read­ily make alone must be ap­proved by the prac­ti­tioner. And if you do not like what he/she is do­ing, the only way to re­move them is by court or­der.

Sta­tis­ti­cally busi­ness res­cue doesn’t do so well, record­ing a 10% to 15% suc­cess rate.

How­ever, there is no harm in a last-ditch at­tempt to save your busi­ness. Who knows, you might fall into the 10% to 15% cat­e­gory. Munya Du­vera is CEO at Du­vera El­group

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