Avoiding Common Traps That Lead to Distress

The Turnaround Management Association posted an excellent article on its website, Managing to Avoid Failure; Avoiding Common Traps That Lead to Distress by Tyrone Courtman and Andres Wild, both of Cooper Parry LLP.

The article discusses that both external issues and internal issues lead to business distress and, all too frequently, to outright failure of the business. Internal issues include: complaceny, lack of objectivity in analyzing the business, not allocating time for thinking/planning, lack of strategic planning, lack of communication with employees and not providing appropriate motivation for employees. External issues are many and include cutthroat competition, harsh economic conditions, high cost of borrowing, and even the inability to obtain investments required for the business. Indeed more firms fail when market liquidity falls.

In times of low liquidity businesses must expand their thinking and explore alternative sources of financing. Accounts Receivable Funding can be an effective financing source for businesses in the healthcare, commercial and government industries during periods of low liquidity.