Getting help for your business – and yourself
When analysing the impact of a business restructuring, many of us look only at the financial costs. The effects on the people involved, which can be considerable in many cases, tend to get ignored. It’s time to put that right, writes James Sleight, a partner in our Advisory team.
The freedom of being your own boss and making your own choices is what drives many of our clients to set up their own businesses and become entrepreneurs.
Many entrepreneurs get to experience the wondrous sense of fulfilment achieved from building something out of nothing. However, there is a large aspect of the role that has the potential to put pressure on an individual’s long term mental health. Extremely long hours attending to your business, having to make difficult decisions on your own, spending considerable time concentrating on mundane administrative tasks, constantly trying to keep employees happy and dealing with financial issues are some of the typical issues that can bring a great deal of pressure and stress. These issues are compounded if the business gets into difficulty.
Entrepreneurs generally try to avoid failure at all costs as the collapse of their business will invariably mean the redundancies and, commonly these days, the crystallisation of personal guarantees. Business owners are not just faced with losing their job but also giving up everything that they’ve worked so hard for. It can be hard for directors to seek help in these circumstances. They feel isolated and can’t accept that anyone will understand the unique problems that they’re facing.
Those entrepreneurs who decide to get professional advice will often experience mixed emotions. We find that the inevitable sadness and disappointment is accompanied by a wave of relief for the directors who have been fighting for survival for so long. A problem shared is a problem halved.
When advising directors facing insolvency, there are so many issues that need to be dealt with quickly and so many stakeholders that are owed a duty of care. This can mean that the mental well-being of the director caught in the middle of everything is not given enough consideration. This reflects the law and the insolvency practitioner’s resulting duties. Creditors don’t pay us to look after the directors: they’re understandably focussed on getting their money back and trying to run their own businesses.
So, should insolvency professionals do more? We believe that the answer is ‘yes’. In our view, we have a role to support everyone involved in an insolvency situation. That’s why we’re continuing to improve our approach. The large number of personal recommendations we receive from those whom we’ve helped in the past suggest we’re on the right track. For example, we’re on hand 24/7 to handle some of the more difficult issues that directors must face, such as employee redundancies, staff announcements and communications to key stakeholders. We also make time to discuss any resulting personal implications from a company’s insolvency and ensure the director is aware of the ramifications of any decisions regarding the business (whether it be personal or assisting them after the event with issues of personal liability). We’ll continue to look at ways that we can make more of a difference to all of those involved.
If you or your business are having a tough time, please get in touch.
Contact James Sleight on +44 (0)113 244 5141 or firstname.lastname@example.org