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ARTICLE · 11 JULY 2022

When successful businesses fail

Worrells
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Many business owners learn on the job, meaning key financial and cash flow management skills may be lacking.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Christopher Darin
Christopher Darin
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When successful businesses fail

Cash may be gone but cash flow remains king!

Picture this: Your client's retail business is booming. They've tapped into an underserviced market, demand is growing, and they're barely able to keep up. They should be profitable right? Yet your client is struggling. Why?

As insolvency practitioners, we see businesses founded on great ideas fail every day. The main reasons are:

  1. Lack of proper record-keeping, including the co-mingling of personal and business expenses.
  2. Failure to allocate resources effectively-every function and role within a company needs to row the boat in the same direction.
  3. Not understanding the importance of cash flow-discipline in collecting debts and having the ability to fund stock to meet demand and in today's environment having regular stock supply.

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