Vice-like profit margins, endless red tape, and a rapidly changing global climate make the British agricultural industry an enormously challenging one for businesses to navigate. If you’ve ever caught an episode of Clarkson’s Farm, you’ll know just how tough a business farming can be, how hard it is to turn a profit, and how entire harvests can be ruined by the weather or disease outbreaks at any time.
This doesn’t just impact the farmers growing crops and caring for animals to feed the nation. The enormous struggles they face also impact on associated businesses, such as those making agricultural machinery and other on-farm products. When agricultural businesses work all year to turn a profit and end up in the red, there’s a knock-on consequence for suppliers, who may not get paid on time – or at all. That later scenario was exactly what our client was facing.
As an agricultural machinery supplier, the health of his business is closely tied to the fortunes of the wider agricultural and farming industry. Let down by a client who failed to pay a £150,000 invoice, the business quickly faced enormous cash flow shortfalls and quickly racked up £60,000 in debts to their own suppliers and more worryingly, £160,000 due to Revenue and Customs.
With such a deficit, the owner found himself falling into a bigger and bigger hole, with HMRC on his back for their money and staff to pay. What made the situation even more challenging was the fact that the business vehicles were on finance, and therefore not classed as an asset.
Charting a path through insolvency
It’s here that the Boardroom Punks stepped in. Having assessed the situation, our business rescue specialists determined that we would need to initiate the insolvency process. We handled the whole procedure on behalf of the business owner, dealing with the liquidator on his behalf and ensuring the best possible outcome.
For a cost of £25,000 the business was saved – and crucially, so were all of the jobs that existed within the business. While a last resort, going through insolvency allowed this business to emerge on the other side. Today, it continues to trade and is going from strength to strength with no debt, all HMRC obligations paid on time and all staff paid promptly.
If your business has been impacted by a challenging time in your industry and you’d like to discuss business rescue or insolvency, we’re here to help. We specialise in turning around struggling businesses and returning them to profitability – and we always prioritise saving jobs. Contact us on 0800 433 7016 for a free consultation.
