Any business can have a financial crisis: no business is immune from that. Survivors, however, know where they are and know where they are going. They have a clear idea of the problems they face and they have plans to deal with them. They know the market never stands still and they constantly strive to improve the product or service they offer.

IF YOU ARE NOT SURE WHETHER YOUR COMPANY IS A SURVIVOR OR
NOT, ASK THE FOLLOWING QUESTIONS:

• Do you have a current business plan?
• Do you review costs and overheads as well as sales?
  
• Was your last set of audited accounts more than 12 months ago?
  
• Do you prepare regular management accounts?
  
• Do you prepare annual projections and cash flow forecasts?
  
• Is actual performance regularly reviewed against plan?
  
• Do you prepare and use aged debtor and creditor lists?
  
• Do you and your co-directors meet regularly to formally review progress? Or, f you are on your own, do you set aside time just to understand your financial position?

IF YOU ARE DOING ALL THESE THINGS, THEN YOU ARE LIKELY TO BE IN A POSITION TO NOTICE THE SIGNS OF IMPENDING CRISIS. IF THEY OCCUR. YOU'LL KNOW YOU ARE STANDING AT THE TOP OF A SLIPPERY SLOPE
(If any of this makes you feel uncomfortable, try the list below. If any of these statements are true, chances are you are over the edge of the slope and heading downhill. It's time to seek help if any of these statements apply.)

IF YOUR PROCEDURES REVEAL THE FOLLOWING

• Poor collection of debtor book (greater than 45 days is considered poor in many business sectors).
  
• Extended lines of credit - is exposure to key customers worsening?
  
• Rising work in progress that is not billed on time.
  
• Diminished cash balances - is the bank balance steadily reducing; are planned purchases being put off or are they being made by expanding payment periods, rather than cash?
  
• Over reached overdraft facilities.
  
• Poor cost control with too many people responsible for purchasing, leading to a lack of organised discount opportunities.
  
• Lack of long standing relationships with suppliers: Are you giving up on them
  - or are they giving up on you? Or are you widening your range of suppliers simply to make more credit available?
  
• Rising stock levels and static sales
  
• Contract disputes
  
• Final demands and writs being received
  
• Your business is largely reliant on one or two customers - and those
  customers are not paying as well as they were.
  
• You are increasing borrowings just to keep the business running.
  
• Your outstanding debtors or potential bad debts seem to have increased
  suddenly.
  
• Are you still unsure how much you owe, and how much you are owed?
  
• You are more than one month adrift in payments to the Inland Revenue or the Customs and Excise.
  
• The bank is calling you to say you have exceeded your overdraft limit.
  
• You have received a statutory demand for payment, which could lead to a winding up petition.

If things have got this far, you should seek professional advice immediately.