BUSINESS NEWS - Many companies find themselves under financial pressure in today's challenging and complex economic and trading environment.
It is imperative that directors / owners of enterprises regularly check the “vital signs” of their business and immediately take appropriate action and decisions when it comes to light that their business is in financial distress.
This allows for expert knowledge and advice to be obtained in time for a rescue plan to be drafted and implemented in order to avoid formal processes such as business rescue or the termination of the business through liquidation.
Business owners and directors should be asking themselves the following critical questions:
- Does our business have enough cash to pay its suppliers, staff and SARS as and when their payments become due from the profits generated by the business?
- Does my business have a clear strategy that addresses all relevant aspects of business in today’s complex trading evironment?
- Should one or two of the main customers of our business close down and not be able to settle their accounts, will our business be in a position to pay all of its expenses and continue trading?
- Are all our SARS submissions and payments up to date?
- Does our business meet all Regulatory requirements, including those specific to our industry?
- As per the requirements of the Labour Relations Act, does our business have personnel files for all staff members including owners and managers that are employed?
If your answer is No to any of the questions above, your business may be destined for troubled times and on its way to either intensive care or even worse, the morgue.
Simple tips that can be followed:
- Know and understand the financial drivers and numbers in your business, daily, weekly, monthly;
- Cash is King – and that does not mean profit! Is your cash flow positive?
- Have a clear business- and strategic plan in writing, that provides guidelines of the “Who”, “What”, “Where”, “Why”, “How” and “When” questions in your business;
- Make swift and brutal decisions where necessary;
- Get the advice of a specialist to help you make the correct decisions in your business going forward
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