When money will not cover obligations.
WHAT TO DO FIRST
Establish the exact position: what is available, what is due, and when.
WHAT TO DO SECOND
Forecast the next weeks, precisely.
WHY PRECISELY
Approximate forecasts produce wrong decisions.
WHAT TO PRIORITISE
Statutory deductions already taken Wages Anything that stops the business operating Anything carrying personal liability
WHY DEDUCTIONS FIRST
They are not your money and failure carries personal consequences.
WHAT TO DO ABOUT SUPPLIERS
Contact them before missing payment.
WHAT TO PROPOSE
A specific, realistic arrangement.
WHY SPECIFIC
Vague promises are not accepted and they damage credibility.
WHAT TO DO ABOUT RECEIVABLES
Chase everything, immediately.
WHAT TO OFFER FOR EARLY PAYMENT
A modest discount, if it accelerates cash materially.
WHAT TO CUT
Discretionary spending, decisively.
WHAT TO BE CAREFUL WITH
Cutting anything that generates revenue.
WHAT OPTIONS EXIST FOR FUNDING
Existing facilities Owner contribution Advance payment from customers Asset sale
WHAT TO AVOID
High-cost short-term borrowing Borrowing to pay borrowing
WHY
It is the pattern that accelerates failure.
WHAT TO COMMUNICATE
With staff, honestly and proportionately.
WHAT TO ESTABLISH AFTERWARDS
What caused it, and what prevents recurrence.
WHAT IT USUALLY IS
Growth, poor collection, or absorbed cost increases.
