Business Recovery Specialists Help Social Club
What do we mean by Business Recovery Specialists? Case Study 3
This case study looks at how our business recovery specialists were able to help a Social Club in its business recovery when it was facing a highly uncertain future as a result of cash flow problems, creditor pressure and a lack of support from its bank. It shows how through our advice we were able to help the Club to turn itself around and remain at the heart of the village’s life, rather than drifting into liquidation.
What Problems was the club facing?
The first thing to say is that although the client is a social Club, it is still a business. This means it is subject to all the pressures that any other type of business faces. The Club had a healthy membership base, but for a number of reasons, it encountered cash flow difficulties. This led to creditor pressure and a nasty financial problem, even though day to day trading was profitable.
The Club’s management proposed selling a large under-used function room at the rear of the property to raise funds to solve the problem. However, agreement could not be reached on how to distribute the proceeds amongst the Club’s creditors to best advantage. As a result, the Club’s bank still felt that the business was not viable in the long run, and along with a finance company, we were called in to establish whether the Club could be saved and turned around. Our job was to propose a business recovery plan that was acceptable to all key parties – the bank, other creditors and, of course, the Club and its membership.
What did our Business Recovery Plan Propose?
The project lasted for 16 weeks, during which we analysed every element of the Club’s business. This process convinced us that the business could be viable going forward. Our recommendations and actions included:
- Selling the function room.
- Agreeing how to split the proceeds from the sale to the satisfaction of all interested parties.
- Helping the Club reduce its bank debt by half
- Clearing the Club’s overdraft
- Pay off pressing creditors.
The Club’s honorary treasurer at the time commented on our work:
“There was a real danger of the club going under. Though we knew it was a fundamentally sound business, we didn’t have the kind of specialist skills within the Club’s management team needed to deal with the problems we were facing. Now we’re looking forward to a much more positive future.”
Is your Business Facing Difficulties? We can help
As Business Recovery Specialists our aim is to help businesses that are facing difficulties turn their fortunes around so that they can avoid insolvency and begin trading profitably again.
As this case study demonstrates, we have the skills and knowledge to help all kinds of business – in this case a members’ club that was in danger of insolvency. In our experience, insolvency is not inevitable when a business starts experiencing significant difficulties. However, the quicker you get in touch, the more we can do to help.