Economic conditions remain challenging and many businesses built up significant debt in order to trade through the turbulence of the last few years. It is, therefore, unsurprising that the rate of business failure is rising, particularly amongst recruiters. Hallmarks of the industry, including tight margins and limited assets, often means that emergency borrowing is proving difficult to pay down and can feel like a significant burden.
It is natural for company directors to try and stay the course and seek to work through financial difficulties. However, this can lead a business down a narrow path and potentially towards a worst case scenario.
The key to finding the optimal solution, in any challenging situation, is to seek advice early and discuss the options available. A high quality restructuring professional will be happy to provide a director or board with free advice around potential solutions to financial pressure. This may include: refinancing or restructuring of debt, identification of loss making business elements to be closed and/or operational reorganisation. They will also be able to set out options, should the business need to be formally restructured through an insolvency process and discuss critical timings. This will ensure that stakeholders (including employees and customers) are best protected.
Advice can also be given around a directors duties and how to avoid a possible business failure resulting in personal claims against a director.
Timing is key. Taking early advice allows directors to take control of a challenging situations and identify an optimal route forward; protecting all involved, including themselves.
About RSM UK
We offer specialist services to recruitment businesses of all sizes. We have built up an understanding of their particular needs over many years working with the sector. We appreciate that companies operating in the recruitment market need advisers to fully understand the sector. Through their specialist commercial knowledge, our recruitment sector team can deliver real value to enable our clients’ businesses to thrive.
Learn more here: www.rsmuk.com