Too many struggling SMEs are shutting down prematurely without exploring the full options available to them, an insolvency expert has told My Business.
According to Peter Marsden, national head of restructuring and recovery at RSM Australia, his firm alone sees around 1,000 businesses go through some form of insolvency process each year. But many are calling it quits too early simply because they don’t understand the options available to them.
“We do a lot of work for the Australian Taxation Office by consenting to act as official liquidators, and way too often by the time we get appointed, the business has just shut and all they do is hand the keys over and say, ‘Sorry, we couldn’t make it work’,” explains Peter.
“You sit there and go ‘Gee, you didn’t really try and investigate all the options’.”
Peter says that there is no substitute for good professional advice if your business is struggling.
“Invariably, good advice is worth the money that you spend on it. It can save a business, it can turn it around.”
Peter also notes that particularly in the SME sector, where the businesses tend to be run by owner/operators, emotion often clouds the judgement of business owners when making difficult decisions.
“You need to be clinical and detached, and assess it as a business [person],” he says.
Peter has also outlined how insolvency can sneak up on business owners, and the warning signs to be aware of so that pre-emptive action can be taken early.