Denial21st October 2020
Has this ever happened to you?
You notice a lump or bump somewhere on your skin…
…And because it’s small, you ignore it. It’s probably nothing… You imagine it’ll go away on its own.
But a couple of months later, it’s still there. You think of it more often… In fact, it’s started to really niggle at you.
At the back of your mind, there’s this persistent thought: What if this is more than I bargained for?
But it’s difficult to get a doctor’s appointment… You have other things on your mind… And somehow, because you’re just a little bit frightened, it’s easier to ignore, and pretend that lump or bump doesn’t really exist.
Another couple of months pass by. And then one day you notice the bump has grown a lot. Now you have to face reality.
“This is something I should have dealt with months ago… What if I left this too late!? What if it was curable three months ago - and now it’s not?”
You enter full-fledged panic mode…
…And even if it turns out to be nothing - which is usually the case - you suddenly know, with complete certainty, that ignoring your problem was the worst thing you could possibly have done for your health. The risk was simply too great.
Right now, lots of business owners are repeating that same mistake with their companies.
You see, even many businesses that survived the first lockdown relatively easily are now entering a ‘danger zone’.
In many industries, this semi-lockdown may be harder to get through than the first, full one. Months of economic hardship, the drop in demand and ever-changing rules have done cumulative damage.
And this time around, you may not be able to get the same level of financial support from the government. Quite the opposite - if you’ve taken advantage of government Coronavirus loans, you’ll soon be asked to start repaying them.
Meanwhile, the economy is in deep trouble. Then there is the added pressure of a no-deal Brexit just around the corner - with entirely unknown consequences and rule-changes.
It would be understandable if you started to get nervous…
…Especially if you’ve started to see signs of trouble.
That might include clients taking longer than usual to pay… Finding it harder to make payment deadlines yourself… Or having to take on lots of external capital to keep the business going.
The problem is, it can be really difficult to acknowledge when your business shows signs of distress.
It’s just like discovering that bump… It can be easier to ignore the symptoms, until the problems are overwhelming.
We’re all attached to the businesses that we’ve founded and poured our hearts and souls into… I know I am.
That can make it really hard to face reality when things get tough. No one wants to see their business fail…
You hope that if you just wait it out, things will improve…
You might imagine you can fix things yourself. Or that “all it will take” is a few changes here or there.
You minimise what you’re seeing and get busy with the day-to-day business of running your company…
…whilst under the surface, your financial distress worsens.
This isn’t unusual. This kind of deflection happens every day…
…And it’s a key reason why some businesses become impossible to save.
Their owners simply left it too late to face their problems.
By the time they acted, issues that could have been dealt with quickly several months earlier had become intractable.
The fact is, the earlier you tackle financial problems in your business, the easier they are to fix.
You’ll have more time to work out a solution under less pressure, too. And more options - which gives you more control over what happens to your business.
The very worst thing you can do is try and hold out, in the hope that things will improve.
So if you have started to worry about signs of financial distress in your business, listen to that gut instinct. Acknowledge what’s really going on.
It’s difficult emotionally… But it’s what a responsible, brave business owner does.
Then seek help straight away. Don’t wait!
If any of this resonates with you, a good first step is to talk to us here at Insight Associates. We have lots of experience turning around distressed businesses - including many in very serious condition.
I’m going to tell you about some of those cases over the next few weeks, so watch out for those emails.
Chances are, we can help you too (especially if you come to us early!). And if for some reason we can’t, we’ll refer you to a specialist who can.
Just hit ‘reply’ to this email or call us on 01279 647 447 for a completely confidential conversation.
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