Working through failures and the threat of liquidation of companies is as part of business support as is focussing on increasing sales!
While business distress is something business owners may be ill-prepared for, it offers opportunities to business advisors and other practitioners in the business support field to offer their services as solutions to the challenges experienced by a potential client experiencing distress.
“In the past winding up a business under distress was seen as the most viable option, but we have moved forward to understand that distress does not have to lead to total failure,” says Dr Kenneth Moodley, supply chain and turn-around specialists from Nikshen Consulting, who is one of the panelists on the upcoming episode of the IBASA & EPI Webinar Series.
The Companies Act does not dictate that liquidation of a business under distress is the only option. It also allows for a business rescue process to be approved by the courts for implementation by business rescue practitioners, who are registered with the Commission for Companies and Intellectual Property (CCIP). And there are also other, less structured processes available such as reaching compromise with creditors or restructuring the business without having to make special arrangements to meet financial obligations.
When a business faces distress, it has various options. They may stop trading and if they have enough resources they may wind the business down without having to come to an agreement with creditors, or if there are not enough resources they may apply to be liquidated. But when there is a real prospect for a successful turn-around, they may apply for the courts to approve a business rescue process.
These processes require specialized legal and accounting services, which may not be viewed as an opportunity for business advisors, but there are also other competencies needed — both for the formal business rescue process and informal turn-around or restructuring projects. It is here where the opportunity lies for business advisors, as many more competencies are required for a successful business rescue project to be concluded or for offering business turn-around support.
“Business advisors and other business support practitioners may position themselves as service providers to address these non-legal and non-accounting elements of what is needed to put the business on a good footing,” says Moodley.
“But it may be important to add to your skill set as a practitioner, or to start with smaller re-alignment projects so that you create a portfolio of past projects, which implies that you need to consciously add to the value you can provide as a service provider.”
“Exploring the opportunities in rescuing small and micro businesses in distress”
Learn more about how business advisors may position themselves for business rescue and turn-around opportunities with Dr Kenneth Moodley, supply chain and turn-around specialists from Nikshen Consulting, and Mwendabai Kalaluka, Chairperson of the IBASA Business Rescue Committee and member of the DTIC’s Business Rescue Liaison Committee
Thursday 13 May from 11h30 to 12h45
<< CLICK HERE >> to book your place
Mwendabai Kalaluka, who will also be a panelist on the upcoming episode of the IBASA & EPI Webinar Series, agrees that there are new opportunities emerging for business advisors in the business rescue industry. He serves as Chairperson of the IBASA Business Rescue Committee and is also a member of the DTIC’s Business Rescue Liaison Committee.
“The CIPC already has a draft for a competency framework in place that will be published so that accounting and legal skills are complemented by other business support requirements,” says Kalaluka. “People forget that it is not a legal or accounting matter to survive — it is more the business model or other challenges that must be addressed, for which a different skill set is needed.”
When this wider competencies framework is implemented, business advisors who are not legal or accounting experts may find that they have an important role to play in both the formal business rescue processes and the informal turn-around projects business may implement on their own accord.
Says Kalaluka: “Opportunity does not lie only in the formal business rescue space. You can start participating before being licensed by engaging with the processes and positioning yourself so that as you are offering business advisory services, you are doing some form of business turn-around or rescue.
Join the upcoming webinar (or view the recording afterward) to learn how you may get access to business rescue and turn-around opportunities.
- To join the upcoming CPD webinar you can << REGISTER HERE >>.
- Christoff Oosthuysen is the webinar host, Founding CEO of the Entrepreneurial Planning Institute (EPI) and General Partner at Seed South Capital.