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How The Rescue & Recovery Experts Can Save Your Business with Rick Smith & Ben Westoby

Is your company in trouble? Is your business on the verge of going bust? Then don’t miss this week’s episode of The Melting Pot with business rescue and recovery experts, Rick Smith & Ben Westoby, from Forbes Burton. Ben and Rick work with companies that haven’t quite gone bust, but are in trouble and need help. 

What’s fascinating is following the pandemic, you’d have thought that lots of businesses would have had to shut up shop for good. But actually, here in the UK we’re running at about 40% or less – almost half the traditional insolvency rate for businesses in the UK. This is thanks to government investment in furlough and bounce back schemes, as well as various other handouts, all of which have actually kept many companies afloat. 

In today’s episode, Rick & Ben share examples of companies they’ve helped, where they step in before the shutters come down and the creditors foreclose, what it is they do, who they help, and how they help. 

So if you’re listening to this, and your cash flow isn’t where it needs to be, or there’s a gap in your funding and you’re wondering how you’re going to get back to where you want to be. Or perhaps you need some help negotiating with your creditors, or your suppliers, and you need a plan, or you need a third party to come in and help you, then let Rick and Ben share their sage advice with you. 

On today’s podcast:

  • Getting into business rescue and recovery
  • How Forbes Burton works 
  • The rise of zombie companies
  • How to close the funding gap
  • Not every business can be saved

Links:

Why you might need the business rescue & recover experts to save your business

Rick Smith is the Managing Director of Forbes Burton, a specialist business rescue and recovery advisory service. Ben Westoby is a senior client manager at Forbes Burton. 

With over 45 years worth of combined experience, the team at Forbes Burton specialise in helping small and medium sized businesses with all kinds of financial problems. They help business owners who are facing financial difficulty, personally and within their business, recover, rebuild, and enjoy a brighter future, while delivering exceptional advice, support, and service.

If you’ve ever experienced financial difficulty in your business, you’ll know how stressful it can be, which is why it might be easier to call in the experts, like Forbes Burton, to save your company from the jaws of liquidation. 

They aren’t accountants, nor are they insolvency experts, they sit in the middle of the two. 

How Forbes Burton works 

“We’re sort of somewhat parachuted in, so we sort of land in there and gather as much information as we can, we call it the predatory action.”

When Forbes Burton are called into an ailing business, they approach the first meeting as a data gathering exercise. They have to figure out what’s going on in the business, what the pressing points are, and once they establish that, they establish how much time the business has left. 

“It might be that there’s a winding up order served against them. It might be that a creditor is getting very nasty with threats and so forth.”

From there it’s a matter of determining if the business is fixable, and if Forbes Burton can work with them. 

It’s not a case of being able to save every business they go into. You have to tread carefully, warns Rick, because you may initially get a business owner who’s in a very stressed position, crying, emotionally drained, they’ve had their back against the wall for many years, fighting the good fight daily. 

“And when you go in there, they’re still fighting albeit fighting the wrong direction, but they’re still out there fighting to try and keep this thing alive.”

Why bring in Forbes Burton

The benefits of bringing in a team like Forbes Burton to help save your business are they aren’t blinkered by emotion or what’s gone on previously. They’re completely detached from the business, and can look at the business from a non-emotional standpoint, making it easier to see things that you might not be able to. 

“We use different tools for business analysis as a means of gathering information [and] presenting it in such a way they can actually physically see it, which is always a good thing.”

It’s not that Rick and Ben are presenting new data per se. It’s more the interpretation of the data, says Rick, that people tend to struggle with. The team at Forbes Burton have access to the same information, i.e. balance sheets, cash flow, QuickBooks reports, as the business owners do, it’s a matter of presenting the information in such a way it has an impact.

While the team at Forbes Burton can help companies negotiate with lenders, or help them put bridge funding in place to get back to ‘normal’ operating, it isn’t all a rescue and recovery team do.

“What we’re trying not to do is leverage these companies to a point where when they do return they’ve got an added cost base, which makes them not viable. So it’s a balancing act.”

The rise of zombie companies

One of the surprising statistics to come out of the pandemic is that the number of businesses failing is lower than average, which, given the turbulent year we’ve had, shouldn’t be the case – there should be more businesses going under. But, the government with their funding and furlough schemes have been helping keep companies afloat. So much so, the level of business insolvency is 40% lower than normal. 

It’s picking up pace now, says Ben, meaning companies are getting in touch with the team at Forbes Burton because they’re struggling without government assistance. But it could be a case of too little, too late. These are companies that would have benefited from Forbes Burton’s help last year, but are now beyond the point of no return. 

“When you get into these moments of ultra crisis, perverse things happen. It’s like when somebody is in the Arctic and they’re dying of hypothermia, they actually take all their clothes off because they feel hot.”

Ben and Rick advise any business owner to get in touch as soon as they realise there’s a problem. 

“The benefits of that is there’s a wider range of tools we can use if they do, but it still is a battle for any company, they just tend not to [start] until there’s a big decision to be made.” 

How to close the gap

Ben and Rick have a series of tools at their disposal to help business owners work out how to close the gap between where they are currently and ‘normal’ jogging. They reckon there isn’t a single industry they’ve not had an association with.

“The first thing is a fresh pair of eyes, just somebody who can come in and sit down with them and listen to their concerns relating to their business and then start to put a fresh perspective to it. We can bring the skill set that we’ve amassed over the years street fighting.”

They ask questions like: 

  • Do you have the fundamental pillars in place? 
  • Do you have a strategic approach to what you’re doing? 
  • How are you tracking finances? 
  • Are you cash flow forecasting? 

And then it’s about making sure you plug the holes. 

They’re quick to add, it’s not necessarily your business isn’t working, you could be a leading SME in your industry, a fantastic car mechanic, for example, but if you’ve never run a business before, or you’ve never had anything to do with customer acquisition, or had to track finances, things can go wrong quickly. 

Half the battle, says Rick, is getting buy-in from leadership. A lot of the time, he comes up against resistance to change at the failing organisation because ‘that’s the way we’ve always done it’. 

Well sure, but is it the right way? 

“We’ve always done it that way’’ is something I hear a lot. And it’s a case of trying to explain to them in a way which I think they will engage with and be open minded to reviewing.”

Not every business can be saved

The sad truth is not all businesses can be saved. This is where the insolvency side of Forbes Burton comes into play. Because at this stage, it’s about getting business owners to understand while they’re running and managing the business, if they’re receiving outside funding, then the business isn’t theirs. It belongs to the creditors who have given them this funding. 

“We’ve seen a steady run for the last 18 months because of the lifeboat measures. But I do think, sadly, that number is going to increase over the next 12 or 18 months where it’s going to be more tricky to do [something].”

Book recommendations

Edward de Bono – How To Have A Beautiful Mind

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