It is always a traumatic experience for a business owner to decide the business is in financial difficulty; none more so than if the business in question has been in the family for several generations.
All business owners fear the unknown, of taking advice from a professional they have never met before. They may believe that in the “blink of an eye” they will lose control. They may feel decisions will be taken without their input and against their will. In addition, the owner of the family business has the added stress of burden; being the one who allowed the business to reach this point. Who would want to be remembered as the person who initiated putting the company into administration or liquidation?
It is for this reason the sage advice I received as I was beginning my career is still as appropriate today as it was nearly 25 years ago. The advice was simply; “remember that as an insolvency professional giving advice to a distressed business, you are 50% accountant and 50% social worker”. I have never forgot that advice and it has been invaluable in advising businesses throughout my career. Whether the business could be saved or not, the motto is to “treat people with respect and understanding”.
I always try to give initial advice to business owner(s) in the presence of their accountant, solicitor or other trusted person. There are a number of issues to take into account so it is always reassuring to have a familiar face to discuss advice given after the meeting. The insolvency practitioner should not force an instant decision. Even in the most dire situations, there should be a time to reflect and hold further meetings if necessary.
Most businesses have a natural “shelf life” and will either be sold on, wound down or enter into some form of insolvent proceedings. This applies to family businesses as much as any other business. In many cases, there would have been little grandad could have done if he had to face a similar situation. Who would have thought in the 1970’s that the traditional High Street of butchers, bakers and cobblers would disappear, because of the arrival of massive superstores and the rise of the internet?
So the advice is simple, if you run a business don’t dwell if you need advice. Take it and decide who you want with you and make sure you give yourself time to reflect. If the business can be saved, then the Insolvency professional will give you that advice and if not, the winding up process should be handled in both a professional and sympathetic manner.