A wake-up call for Apollo Kitchens
Apollo Kitchens, a well-known fixture in the Australian bathrooms industry for 56 years, recently entered liquidation. This event resulted in significant repercussions, leaving debts totalling nearly $23 million and all 65 factory workers suddenly jobless. Further, the liquidation disrupted supply chains and affected local businesses, highlighting the far-reaching consequences on employees, suppliers and customers.
The company’s collapse, however, didn’t happen overnight; it was marked by several distress warning signs that included:
- • Mounting tax debts
- • Late wage payments
- • Cash flow struggles across several business units.
This scenario is not uncommon in today’s tough economic climate. As a business owner and director, it’s vital to understand the risks of not addressing problems early or hoping for the tide to change – delayed action can exacerbate issues and create further financial instability.
6 quick tips to boost financial resilience
To withstand ongoing market and trading challenges, SMBs must take proactive steps to boost their resilience. With the business cost-crisis being a significant pain-point for many in the sector, implementing simple yet effective financial and operational practices can go a long way in mitigating risks, improving cash flow, as well as ensuring long-term business sustainability.
Here are six practical tips business owners in building, construction and trades can use to help strengthen their operations and navigate these uncertain times:
Monitor your finances regularly
Don’t wait for your accountant’s yearly review. Set aside time each week and month to review:
- • Cash flow projections
- • Debt levels and repayment schedules
- • Key performance indicators specific to your industry.
Diversify and innovate
Relying too heavily on one product line or customer base can be risky. Why not consider:
- • Exploring new markets or product offerings
- • Investing in efficiency improvements
- • Embracing new technologies in your field.
Maintain open communication
Transparency builds trust. Keep lines of communication open with your people and stakeholders, including:
- • Employees: As they often notice issues first
- • Suppliers: Strong relationships can help during tough times
- • Creditors: Early discussions can lead to more flexible payment arrangements.
Manage debt actively
Debt needs careful management with the right advice from the right small business debt experts:
- • Prioritise tax obligations to avoid severe consequences
- • Consider consolidating debts for easier management
- • Explore refinancing options if better terms are available.
Negotiate contracts effectively
Don’t underestimate the importance of thorough contract negotiations. Take the time to assess and discuss contract terms before signing to protect your interests:
- • Fixed-price clauses: Include price adjustment provisions for unexpected costs
- • Scope of work: Clearly define the project scope to prevent misunderstandings
- • Liabilities: Review liability clauses to protect against unforeseen risks.
Seek expert guidance
To build a resilient business, an outside perspective can be a highly valuable investment. If you are experiencing any of these warning signs in your business, however, don’t wait until it’s too late – because the longer you do, the less options you’ll likely have:
- • Feeling overwhelmed by financial pressures
- • Experiencing persistent cash flow issues
- • Needing help negotiating with creditors or the ATO
- • Wanting to explore restructuring options and safeguard your assets.
Seeking help early often leads to more options and better outcomes. As an SMB owner, you also possess the unique advantage of agility – use this to your benefit by staying open to new ideas that foster growth within your team, as well as build a culture of continuous improvement and innovation.
How AVA Advisory can help
AVA Advisory understands the unique challenges small and medium business owners face, particularly in the building and construction industry. From navigating cash flow constraints and fluctuating materials costs to dealing with regulatory compliance and project delays, business owners in the sector face a range of financial complexities that can hinder growth and sustainability.
Our experienced professionals provide tailored solutions to help you manage financial and operational challenges effectively, empowering you to build a stronger, more resilient business that can thrive in today’s competitive landscape.
Our services include:
- Debt advisory: We develop strategies for managing and restructuring debt, negotiating with creditors and improving your overall financial position.
- ATO debt management: We assist with ATO obligations, payment plans and resolving tax-related issues to minimise stress and potential penalties.
- Restructuring and turnaround solutions: We provide comprehensive restructuring advice to help you streamline operations and return to profitability.
- Insolvency guidance: If insolvency becomes unavoidable, we offer professional support to guide you through the process and explore all available options.
- Strategic financial planning: We help you develop financial strategies and contingency plans to safeguard your business’s future.
Our approach is collaborative, transparent and focused on achieving the best possible outcomes for you and your business.
By learning from real-life situations and actively working with our small business debt advisory team, you can ensure your business not only survives but is positioned for growth.
Your next steps with AVA Advisory:
- Schedule a comprehensive financial health check for your business
- Identify areas for potential restructuring, diversification or innovation
- Open a dialogue with key stakeholders about your business’s future with AVA Advisory by your side.
Reach out to us on 1300 181 220 for a confidential, obligation-free consultation, or schedule a meeting through our intuitive online platform.
