We were 35 minutes from going bust

Overview

When a new external accountancy team informed us that we were on the verge of being insolvent, we had to act fast to have a hope of saving the business.

The challenge

There is no doubt what my biggest challenge has been - it was the day when epm: technology was 35 minutes from going bust.

It was in 2006 and after relying on our own accountancy team's out-of-date figures, we brought in an external team. They discovered we were just a couple of pounds from being insolvent.

I got this news on my phone when I was on top of a hill in Derbyshire and I couldn't get back to work quickly enough. Everyone was panicking and no-one was making any sense, while I kept coming back to the fact that even though we had a full order book, we were still on the verge of going under.

We decided to meet again the following morning. I sat up until 3am thinking about what could be better and what we had got right. I had set epm: technology up 10 years earlier by myself, armed with just a pen and a telephone. This was the biggest challenge yet, and eventually I went to bed with a plan in my mind.

The next day people were ready to ring the administrator and everyone was talking at once. I kept quiet and someone turned to me and said 'what do you think'. So I told them.

Our situation was that our liabilities were far higher than our assets and if we went under, as a failed company, our assets would be worth even less.

The solution

We were just about to enter our busy period and this gave us hope. If we kept trading and took a number of steps - including working our nuts off - we would be able to look at it again. If it was still a mess, we would then we would call it a day. If nothing else, our liabilities would be lower.

It took us 35 minutes to discuss this, 35 minutes in which we'd gone from deciding to call in the administrators to deciding to give it another shot.

Knowing our true situation helped, and I had faith in the long term plan. But we'd have to keep on top of the figures more and we would also have to deal with a number of management problems we were having. This involved letting some of the managers go - and we didn't miss them at all.

Key lesson

The experience taught me that it's never too late to have a plan. Now, I have plans on everything, especially where the company is heading. Like all best plans, our plan for the coming year fits on one piece of paper. It is fixed to the wall in my office and is the simplest plan of all. It says.....

Top tip

... Heads down, bums up and trade like mad.

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