Directors, if you do the same things again, you risk getting the same result – another liquidation!
At Antony Batty & Co we meet many directors every year, especially those of small companies, where we have acted as liquidators, who then tell us they want to set up a new business and start again.
They say they don’t know anything different, want to get trading again and ask us for some advice.
Our response is usually to advise them that if they do the same things again, they’ll probably get the same result – another liquidation – and that we could well be hearing from them again in 12 months’ time. Which, of course, we hope we don’t, because we want them to do well.
Starting a new business after liquidation can be exciting yet daunting. Here are some key pieces of advice to help ensure a different outcome:
Seek professional advice and support: Surround yourself with experienced professionals like accountants, legal advisors, and business mentors who can provide valuable insights and help spot early warning signs of financial distress. In particular, make sure you have regular face to face meetings with your accountant to review figures, check cashflow and spot any issues early.
Reflect on past mistakes: Analyse the factors that led to your previous insolvency. Develop strategies to mitigate similar risks, ensure effective credit control, and save for taxes. And get your invoices out on time. It’s surprising to see the number of small businesses that don’t.
Develop a robust business plan: A well-thought-out business plan is crucial. Include a clear vision and mission statement, market research, financial projections, marketing strategy and contingency plans.
Monitor and adapt to market changes: Stay informed about industry trends and be ready to adapt your business model. Explore new markets and leverage new technologies.
Choose a new company name: Avoid using the same company name to prevent confusion and legal issues. Select a name that reflects your fresh start.
Ask yourself is starting again the right thing? Consider alternatives: Sometimes, taking a step back and becoming an employee for a while can provide valuable breathing space and a clearer perspective.
Remember, learning from past mistakes and doing things differently can set you on the path to success, and reduce the chances of seeing us again!