eCentral Business Show^©

My business has run out of money is a place no one wants to be, but sometimes...

Tue 2:59pm 14 Nov 2017
Podcast Audio


Expert in the field Barry Hopkins speaks about business owners coming to the realisation that their business has run out of money. It is possibly the most dreaded of business experiences. It can result in intense stress levels, questions about the future and the implications to suppliers,  staff, clients and family.

The truth is a business failure and possible bankruptcy is a process that can be done in the correct way to avoid prosecution and jail in most cases.

In this interview with Barry Hopkins, we talk about this eventuality and his experience assisting businesses in this perilous state.

Audio transcription
my business is run out of money is a subject of today ecentral business show John Nayler and joined by Barry Hopkins from Victory Business Solutions Barry thinks of extending the chat this morning thanks good now the last time out we talked about you know I'm in trouble this one is the planes going to crash you know we think you know so where do you start when you come to this mop you know conclusion mentally well in a lot of cases is bringing the client or the business owner towards that position to realize where the business is hmm it's a lot of emotion oh yes and and getting the business owner to be comfortable with what their options are mm-hmm and what their options are not okay and because in the what the options are not in some cases you're not going to be able to save your business yeah we now need to look after you your family and as many of your employees suppliers and all of the people you deal with in an orderly and sensible way mm-hmm okay well we hear a lot about people where people have you know look after one creditor as opposed to another and it becomes messy you know and then you know as that all process because you're really going to put your foot you gotta have a plan around this process yeah yeah you definitely need a plan and you know just choosing which creditor you go and pay off and which one you're not going to pay off that might work because the liquidator will come in and those payments to your friends or the people that you liked or the person who was loudest can't become a preference payment and that will all that money will be called back from them and the liquidator will then allocate that evenly to two people you know I've heard about that just last week there's preference payment stuff like that so so even that part of the process is something that that you need need to plan and be aware of the Lord and respect to that so definitely you don't want to do something silly that gets you in personal trouble mm-hmm and you also want to be fair to everyone that you're dealing with you also want to be fair to yourself mm-hmm and it is a very structured process there are said times deadline set processes people have to follow sin and with the liquid earth of the Lord forms to their sake and other regulatory bodies and so it is structure but if you know the structure in the process you know where things going to happen that takes a lot of the fear and uncertainty out of the process which makes it a lot easier for people to remove the stress that they're under yeah now one other thing that we talked about in the last video is that that situation where like bankruptcies 1 & 0 things sort of thing is you know if you're going out yeah for the most part it's pretty much the same it is processes and all yeah it is and I think the the more you continue to bet continue to double your bets the more trouble you'll get get into hmm it's sad to see a family lose their home because I've had that extra bet you know that's the business being at a point where it was not going to be able to be turned around hmm and they've borrowed more money out of their family home okay and put it into the business so I think there is a really important service that we provide is letting people understand that hmm because you know if you can keep your family home that's important to most people that I I deal with and it's important to me yeah and so if you can act at the right time you have the best chance of like keeping your home and keeping some sort of ability for your family to take the next step and move on with your life yeah okay and so and let's talk about the emotion to your touch on that early said you know there's that whole thing I think is you know there's a classic Greek stuff about like you know um you know worry about things you can control yeah and that sort of thing I guess there's that clarity that you offer people all that people should search for or get when they get like getting into trouble oh that's exactly true I think one in four or five people I talk to are worried if their business is failing or and they may have to go bankrupt they're they're concerned about going to jail oh yes that's that's very unlikely unless they've done something illegal and I haven't met anyone who has done anything illegal yet Bank touchwood and the other bit really is that the focus is from that as I see that people build up what's going to happen into some bigger mmm they get more worried it gets bigger it gets bigger and they get to the point where they just have that they can't do anything they won't make a decision and it just rolls forward then they get more worried once you understand what's going to happen hmm it gets a clarity and allows you to make decisions and protect your own interests and protect the interests of the people around you yeah of course in psychology is what it is we normally assume the worst in any situation don't we it's very hard to control that that mental process isn't it it's almost impossible yeah so you just need someone to help you with that and I think the way you do control it is having knowledge of what's going to happen hmm okay and then so in terms of the process then and we touch up the last time we spoke is that you know you need to pull back and look at the bigger picture I've taken and yeah that definitely came back have a look at that bigger bigger picture figuring out what's what's really the issues and you know once you find those issues perhaps the business can be safe but then this conversation really talked about those ones when you passed that point you've had a look at the business mm-hmm and it can't be safe so what do you do then so what we really have to do in that process is maybe once that decisions made hmm choose the steps that you'll make when you make them and how you inform people and then bringing in the appropriate liquidator bankruptcy trustee or putting the company into voluntary administration to give you some time to to see if someone else can do something major to the business or there's a buyer out there yeah okay and so what's your role in that then Barry I mean you obviously like to speak to people but you know you you know I've known insolvency guy you're a guy that likes to work with people before the end is no I yeah that's true pretty my and benefit of talking to people is I'm not an insolvency person I understand this all the to process I have a good network of it's over to you but I come in before that and deal with the people hmm and help them manage the situation I've done a lot of work in change management but I've also done a lot of work in analysis and working around your diligence of businesses and how they work what projects would work how they work how other people react and understanding that allows the the business owner that have a plan yeah and with anything if you don't have a plan it just doesn't relief work yeah and I suppose probably even one of the outcomes of the process with you is that sort of thing is people probably find out it's nowhere near as bad as they think yes and once you know it's not as going to be as bad as you think you generally find out it's much better than where you are so it up there it's not logically and financially oh definitely I deal with people that have relatively big businesses that people looking inside would think they're doing very well for themselves however the business isn't doing anything it's actually losing money yeah and they're not taking a wage hmm so they're effectively using equity other house to live on mm-hmm and those people are highly qualified and to get a job somewhere else yeah anymore this case they do the job at Woolworths and earn more money than they are in their business I've heard those sorts of comments Palace boys and people even in my inner circle may be better off and you go that doesn't make a lot of sense does it sometimes ask myself that question Barry yeah well I think everyone in their own business ask themselves those questions occasionally mhm and but I think from what I see is you end up removing over a huge amount of stress hmm and by doing that the the the family and the the person is involved becomes you know gets their life back and doing yeah the first person I ever dealt with which is really drove me in the space from my consultancy basing exit planning was a client of mine who was so stressed that you know you couldn't have a conversation with him his his family with young children his wife just had no idea what was going on i he had all that inside inside him and you couldn't talk to him and the business had been in a position of probably being in solvent for one or two years I'm really that long so and and he'd been struggling to keep it going there he ended up you know the business you know how people want to be calculated about 1.5 million dollars okay and you know he wasn't paying wages he was the business was shrinking so hmm within three weeks of working him so in part of the business he managed to be able to have a proper conversation with his wife and his kids and me which was really good to the process out so that the level of stress people get themselves under is horrendous hmm so you can even help people through that that difficult conversation I hope people get through that I think then they need to I'm not a psychologist and I really probably don't want to be then I give them enough to they get to a point where they can have a break where they can step back and and think what they really want to do if they do need to see a psychologist they can do all right now running out of time of this video but really valuable berry really appreciate what you're doing there how do people get in contact you this well people can have a look at LinkedIn but my profiles there mm-hmm they can email me at berry at Victory business solutions.com oh you yeah all they can give me a call at over four six eight eight four eight nine nine six as a director of our company I answer all those initial calls and have the initial meetings no good on you thank you very much very okay some sobering sort of considerations and it's not a place that I'm sure anyone in business who'd want to visit with I guess the the the the light at the end of the tunnel should be or be in that situation as there is a process that's going to end a certain amount of your worry and you're going to move on to that place of of bringing the end on so you can live the next day you know it's it's probably not cancer it's just something integers you need to get over yeah so anyway Barry thank you very much your time that's enough for this episode of the East Central business show I'm John Nayler