A JOURNEY of a thousand miles begins with a single step. This might suggest that it is the ‘getting going’ that is the hard part and there are many situations where I’m sure it is. However, setting up in business is not difficult. It will depend on what you are planning to do in your new venture (for some businesses you will need licences, accreditations, certifications etc.).
A JOURNEY of a thousand miles begins with a single step. This might suggest that it is the ‘getting going’ that is the hard part and there are many situations where I’m sure it is. However, setting up in business is not difficult. It will depend on what you are planning to do in your new venture (for some businesses you will need licences, accreditations, certifications etc.). For many businesses, though, the barriers to entry are slight. Acquiring a company is straightforward and, provided you aren’t insane, bankrupt, a minor or disqualified there are no qualifications required to be a company director. Insolvency practitioners, however, will confirm that, while getting going may be child’s play, keeping going can be a real grind. Many businesses are under capitalised and have no contingencies built into their trading and cash-flow forecasts that one small wrinkle on the road ahead is enough to cause them to trip and fall. In the late 80s/early 90s, when the author was first conducting independent business reviews of businesses in difficulties, there was generally only one significant lender to the business who had charges over all of the company assets. In those days the crown debts were still preferential and the likely time from an issue arising to action being taken could be measured in months. Following changes in legislation, payment systems, security structures and other technological developments, the companies we see now have multiple lenders with information at their fingertips, many different types of security, the crown are no longer preferential creditors and the time from issue to action can be measured in hours – we see many instances where a problem on a Wednesday means the factors won’t allow the company to draw down enough money to pay the wages on Friday. People working frantically in their business often can’t raise their heads and see what is going on around them. They are working so hard in the business that they have no time, or energy, to work on the business. When the options are tough decisions versus certain failure, the tough decisions must get the vote – the least bad way forward will be the best. If the journey you set out on isn’t going the way you had hoped, don’t bury your head in the sand. If we could help as a critical friend we are always happy to do so; most people that consult us don’t become fee paying clients – you just have to recognise the problem as soon as possible and take action before you are too far off course. Peter Windatt is an accountant and insolvency practitioner at BRI Business Recovery and Insolvency based in St. James, Northampton. Should you have any queries relating to this article or insolvency generally, contact him, or any of the management team, on 01604 754352.