Coventry business recovery specialists, Cranfield, are urging local companies to watch out for signs of distress in their business, especially as the UK economy is still flagging and the National Insolvency Statistics for the third quarter, published last November, reported a 6.5% increase in company insolvencies on the same period last year.

Cranfield’s managing director, Tony Mitchell, says the key indicators of company distress fall into three areas: profitability, cash flow and staff. He said, “Signs of distress can be spotted both internally through management reporting, and externally through transactions that take place with suppliers.”

If profit margins are declining, sales are falling and the business is losing its market share, it is clear that action needs to be taken to turn things around within the business.
Similarly, if a business is constantly at the maximum of its overdraft limit or suppliers are not being paid on time, it indicates financial pressures on the business need to be addressed.

Staffing is another key area. If there is a pay freeze or pay cuts, and redundancies are being made, this can indicate that all is not well; potentially leading to unrest, and ultimately affecting the viability of a business.

Business owners also need to be on constant alert when dealing with their customers and suppliers as this can have a knock-on effect especially if a large contractor goes bust, impacting the supply chain further down.

Cranfield has been a leading insolvency practice in Coventry for almost ten years. The company has helped many local businesses to survive difficult times and turn their prospects around. The key is early action. If your business is showing signs of distress, contact them on 024 7655 3700 or visit www.cranfieldbusinessrecovery.co.uk..

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