Throughout your entrepreneurial life, your company may encounter certain difficulties and you are not immune to finding yourself in the presence of complicated circumstances. Products or services with defects, cash flow worries, accumulated debts, an empty order book, an absence of customers, declining turnover, all of which are likely to drag your firm to the edge from the abyss. In these moments of crisis, an entrepreneur must quickly rely on his reflexes and necessarily be reactive to save his establishment. To help you tackle this difficult situation with determination, here are some tips to energize your business with the goal of getting it back on track for success.
March could mark a tipping point for corporate bankruptcies in France. While failures have declined significantly since the start of the pandemic due to state support, distress signals are on the rise. The Altares firm notes an explosion of 155% of bankruptcies at the end of March and a “rate never reached for 20 years” of companies.
According to Thierry Million, director of Altare: “While the downward trend in business failures has been strong for a year, the last two weeks of March mark a tipping point. Defaults have exploded by 155% compared to March 2020 and we notice an even greater increase in the first two weeks of April ”.
Thus, eight out of ten companies that appear before the courts are in such difficulty that they are directly liquidated. “This is a rate never reached for 20 years,” notes Thierry Million. E
If you are in any of these situations, learn some tips to boost your business.
Reduce unnecessary costs
The more you know how to reduce the costs of your business, the more you will have the opportunity to ensure its development and save it from difficulties. To achieve this, it is first necessary to make an inventory of the expenses and the receipts to identify the problems of expenses. It is therefore important that you classify them in several categories such as “Salaries”, “Supplier purchases”, “service providers” or even “Customer invoicing” so as not to find yourself overwhelmed. The use of management software can be profitable. Once this has been done, you will be able to analyze the superfluous elements. In order to reduce expenses, do your best to renegotiate contracts with your suppliers when they seem too high or feel free to find others. Disengage from partnerships and counterproductive activities that will relieve you of management costs while refocusing on profitable elements. In the event of expensive energy bills, go to war against waste by using as little as possible lights, heating and by favoring the electronic way over paper. Carry out reorganizations within your company by affecting your employees to positions in line with their skills and in case of major necessity, reduce your workforce.
Engage emergency devices
If your business encounters economic, financial or legal difficulties, existing solutions of last resort allow you to avoid receivership. Three outcomes are possible, with the Ad Hoc Mandate, conciliation and safeguard procedure. The first aims to restore the situation of any company before it leads to a suspension of payments. By making a request to the Commercial Court, it assigns the entrepreneur an Ad Hoc agent whose role is to help him identify and resolve problems in complete confidentiality, in particular by negotiating a debt rescheduling agreement with the creditors. The second seeks to find an amicable agreement between the company and its main creditors and partners when it may be in default, but only for 45 days. A conciliator is assigned to propose proposals in order to preserve the company, its activity and jobs. The latter aims to set up a safeguard plan with the help of a judge-commissioner, an administrator and a judicial representative so that the company can continue to operate by carrying out a reorganization. With the aim of maintaining jobs and purging debts.
Access help and services
Your company is still struggling despite your repeated attempts to find adequate solutions and you wonder how to get out of this deadlock. Help and services exist to support you. The State and local authorities can, under certain conditions, intervene via various measures such as payment deadlines, exemptions from taxes and levies or an acquisition of a stake in the capital of your firm. Business assistance committees are also available, such as the CCSF (Commission of Chief Financial Officers, editor’s note), CODEFI (Departmental Committee for the Examination of Financial Difficulties). corporate finance, editor’s note) and the CIRI (Interministerial Committee for Industrial Restructuring, editor’s note). The first grants payment deadlines for certain tax and social debts in the event of temporarily in difficulty. The second seeks financial solutions for companies with less than 400 employees by proposing the implementation of an audit or by granting a loan while serving as a mediator with shareholders, suppliers or bankers. The latter offers the same aids described above to guarantee the future or the retraining of companies with more than 400 employees.
These various tips will be fruitful for you to allow your struggling business to raise the bar and make a new start with ambition and perseverance, to give your project another chance. The important thing is above all for an entrepreneur to engage with courage and inflexibility in safeguarding his business and to involve all of its members to achieve his goals.