Get Your Priorities Right When Starting A New Business
5 April 2017: Alan Limb from BRI’s Southampton Office, shares the tale of a director he was recently asked to help.
A local accountant introduced me to an associate of one of his clients. The director in question previously worked for a company that relocated its operations to the North of England. He seized the opportunity to set up his own business, acquire his former employer’s machinery at auction and move it to new premises nearby. This enabled him to manufacture and sell similar products to the ones that he used to make in his old job.
The director couldn’t raise cash in his new company so he and his wife used a series of personal loans and credit cards to fund the start-up costs and initial working capital. He spent the majority of this at the auction, buying more kit than he actually needed. The remainder was exhausted in getting the items up and running in his new unit.
Consequently there was no money left to pay for insurance cover so the director decided to do without. He has had plenty of time since to dwell on the wisdom of that choice. A fire broke out at the factory destroying all of the contents. This left the director’s company with no equipment, no business and no means of replacing either. It also left him and his wife with no income to service the personal loans and credit cards.
If you have a client or customer that is struggling as a result of key decisions that they now regret, please contact one of the BRI team who can assist them with a free, initial consultation to explore all options open to them.