Let’s face it – running a business can be tough. Due to the shifting economy, changes in government policies or evolving consumer tastes and technologies, all companies will occasionally find themselves in times of financial distress.
Whatever the reason behind the trouble, If your company is experiencing a particularly tough time, it can be incredibly difficult to get things back on track. Being able to strategically manage your business through any low points can be the difference between survival and going under, and it’s all too easy for things to escalate to the point of no return.
1. Free yourself up to focus on what’s important
When your business finds itself in serious strife, it can feel like there simply aren’t enough hours in the day to address the business’s financial challenge. By relinquishing control of your company’s affairs to an independent expert, you will allow yourself the opportunity to refocus on what’s most important, and formulate a plan for the business.
Sometimes, all your company needs is a slight reprieve from the constant pressure you face while struggling to stay above water, so bringing in an external administrator can be that crucial lifeline.
2. Delay your liabilities
If your business is already staring down financial or operational issues, your creditors may understandably be concerned, and might feel the need to increase pressure on you to continue clearing debts. Thankfully, voluntary administration laws state that no new or existing claims can be enforced against your company without the consent of the administrator or a court.
While it’s only a temporary process, once again those precious few weeks can be the turning point your company needs to get back on the right path. If you’re able to put together an effective plan in a timely fashion, you will be in a much better position to negotiate with your creditors.
3. Ease the liquidation process
Should your business be beyond the point of saving, entering voluntary administration can be a smart option to get company affairs in order before beginning the liquidation process. This way, you may be able to offer a better return to creditors than you could otherwise have managed, had you jumped straight to liquidation.