Stories of large corporations in financial trouble are certainly not a new occurrence, particularly following the years of the biggest financial downturn in recent memory, however, one particularly distressing example that occurred this year was that of Tata Steel. Despite being one of the most significant pieces of the British export jigsaw, the steel industry in Britain has hit hard times in recent years, culminating in Tata Steel announcing 900 planned job losses in October 2015.
The lessons learnt from Tata Steel are no doubt endless within the confines of the steel industry, but from a general business perspective, the main lesson is one that has had significance across a number of other large industries: Make Hay While the Sun Shines.
Prepare for the Sudden Changes
The truth is, no business is ever really truly safe from the threat of insolvency. And this isn’t necessarily the fault of the business or its management. It could be a result of market conditions, changes in demand, or a sudden growth in competition, that herald these more difficult times. We’re using Tata Steel as an example, but a number of other industries, notably construction have also historically hit hard times in the immediate wake of a highly positive spell. The difference being that the outcome of these hard times is considerably more far reaching for an organisation on the scale of Tata Steel. The message though, is consistent throughout and preparation really is the key.
The best way for businesses to prepare is through enjoying the good times, and making the most of the financial opportunities that present themselves.
- Use these spells to build up a cash reserve
- Plan for the continued health of the business
Market conditions can change rapidly, and it’s easier to face the prospect of insolvency with months of preparation in the bank.
To discuss any insolvency or bankruptcy concerns that you might have, get in touch with the Parker Andrews team today. You can call us on 0800 612 7593 or use our contact form.