Businesses end up in financial distress for a variety of reasons:
• Insufficient strategic decisions;
• Weak management;
• Inadequate people management, sometimes leading to industrial action;
• Poor location;
• Poor cash flow management;
• Insufficient financing / capital for the current state of the business;
• Unfounded hope for a saviour that never arrives;
• Unrealistic expectations of future sales prospects;
• Management or directors too proud to ask for help.
• The list is almost endless.
Sometimes, businesses manage to turn things around, but in general, failing businesses which could have been saved by the business rescue process end up in liquidation because they leave it too late before they approach a Business Rescue Practitioner.