Messerschmitt, cricket, and businesses under pressure
I’ve always liked the story about Keith Miller, the test cricketer …
A journalist asked him once how he dealt with the pressure of test cricket. Keith Miller was a fighter pilot during the war, and he said to the journalist, “Pressure? Son, when you have a Messerschmitt up your arse firing rounds at you, trying to kill you, that’s pressure. Test cricket is a breeze.”
We have noticed there have been a range of issues facing small businesses following on from COVID, and particularly now with staff shortages. Some businesses have actually thrived, and some businesses are considering closing the doors. As lawyers, we have observed over the years is that it is always best to take action rather than procrastinate. Generally, your first loss is your cheapest loss. After that, it simply gets worse.
There are a number of signs to look for and if your business has experienced any one of these signs, then we suggest you seek immediate help. Many businesses do not want to contemplate the fact that they are not going to survive. As a result, they basically put their head in the sand and do nothing. Often, with timely advice, it is possible to a better result by taking action rather than doing nothing. Here are some of the signs we have noted over the years of a business that is potentially in trouble:
Firstly, if you are not up to date with your superannuation, your BAS, and your tax, that is normally a pretty strong indicator that the business is suffering from a lack of cashflow. Secondly, if you are running out credit with your lenders, and they are unwilling to extend your credit, that is another sign that your business is in trouble. Thirdly, if you are not paying your suppliers within the terms of your agreed contracts, that is probably the final nail in the coffin.
We have acted for many businesses over the years in this situation, and on a number of occasions we have been able to minimise the eventual losses and sometimes assisted the business to continue in a restructured form.
Like pregnancy, prevention is generally better. We provide practical, pragmatic, commercial advice on how to minimise your risks and to protect your personal assets from a business failure.
For example, if you are married or own a property in joint names, we will almost always suggest quarantining your personal property away from your business assets. That is often complicated by personal guarantees, but there are a number of ways in which we can assist you in minimising your risk.
In any business there are always risks, and while they cannot be removed, by working together we can generally minimise these risks for you.
Please contact us if you need advice on your current situation or you would like to discuss how to minimise your risks. •