Working Through Financially Difficult Times
The statistics are clear. Most start-up businesses fail within 5 years.
Sometimes this will be totally out of your control – for example, a law change can make your product illegal or at minimum difficult to access. Sometimes even though your product is successful, other more powerful players enter your market making your pricing uncompetitive.
Prevention Better than Cure
There can never be guarantees that your business won’t face financial difficulties at some stage. That’s just the way markets and competition work.
Careful budgeting and financial planning is essential. Your accountant or financial adviser can assist you with that. However, there are also areas where sound legal advice can help.
For example, the law on your obligations to pay creditors (and particularly the Australian Taxation Office) is very clear, and if you don’t understand it and arbitrarily draw out paying creditors as long as you like, or ignore “Final Notice” warnings, you could find your business facing a winding up order.
In short, if you fail to manage your financial obligations properly, other entities may enforce payment in a way and at a time that may be out of your control and may jeopardise the continuity of your business. We can assist with preventative advice regarding the way you operate and any contractual risk you face.
Fighting Business Battles
From time to time, people or other firms may cause, or potentially cause, your business harm through their actions or inactions. These might be:
The circumstances can range from employees or outsiders trying to steal your business ideas, to something as simple as customers refusing to pay their bills.
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