As a Business Restructuring Professional, I consult with and assist many businesses in distress. Typical challenges experienced by businesses in the Garden Route and in South Africa are:
- Inconsistent cash flow resulting in Cash Flow Pressure
- Insufficient cash flow planning
- Profitability under pressure due to rising costs
- Ineffective cost management
- Ineffective debtor control
- Pressure from Creditors
- High interest rates
- Difficulties caused by statutory over-regulation and compliance
- General poor economic climate in SA (despite the Bokke, Dricus Du Plessis and the Government of National Unity)
- After-effects of load shedding are still impacting certain businesses
These factors pose a serious threat to the survival of businesses, large, medium and small. Now, more than ever, business leaders and owners need to really pay close attention to the detail of managing their business.
90% of businesses requesting help and assistance, are too late and too far down the road of debt and should, more often than not, close down or be liquidated. If you identify any of these problems and take immediate action, there is HOPE! Act as soon as you notice signs of distress in your business – it will give your business a fighting chance to survive:
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If the efforts above are not having the required results and you have called in the assistance of a professional, the company may be ailing or dying. Section 128(f) of the Companies Act defines a business in distress as follows:
- If it appears reasonably unlikely that the company will be able to pay all of its debts as they become due and payable within the immediately ensuing six months; or
- if it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months business rescue or liquidation become your only options.
To recover your business from a distressed position, it requires input from an accredited Business Restructuring Professional, who will give you the correct advice and assist if necessary, to deal with problem areas identified, in order to save the business and put it on course for recovery and sustainable success.
Article composed by Basson Piek (MBA, Cert. Business Rescue), accredited Business Restructuring Professional.
For more information or enquiries, contact Basson at basson@rgprok.com or 044 601 9900. www.rgprok.co.za .
