The press releases are piling up: small and medium-sized companies are increasingly experiencing economic difficulties – many have concrete closure plans and are implementing them. The offers for sale are increasing. Energy shock, brittle supply chains, shortage of skilled workers and inflation are the reasons. Price increases are not only hitting their own profit and loss statements, they are also causing customers to hold back and lower sales. An analysis by the information service provider CRIF sees an increased risk of insolvency for around 300,000 companies in Germany. That is around 10% of the companies in Germany. The industries that are particularly energy-intensive have already shown significant increases in insolvency cases. This situation calls for attention and caution.
The Principle of Hope is not an Option – Planned Action, on the other hand, is an Obligation
The management of affected companies should deal with critical developments at an early stage in order to avoid the worst or to be well prepared for insolvency. The willingness not to look closely and to hope for improvement seems to be particularly high in such difficult phases. But the opposite is necessary: analyse, assess possible developments, take measures, and implement them consistently. A systematic and planned approach, consideration of compliance and a focus on eliminating problem areas significantly improve the chances of economic improvement. Calling in experienced consultants is not a sign of weakness, but an expression of responsibility for the company, for employees, customers, and suppliers, and ultimately for one’s own family. Even if insolvency cannot be avoided, good preparation is important.
Controlling and Risk management
Many companies are not aware that they can also be indirectly affected by economic developments: Receivables from customers default – suppliers become insolvent and fail to honour delivery contracts. The key to protecting the company from losses is risk management. Here, too, the following applies: analyse, assess possible developments, take measures and implement them. This is done in a planned manner and with the necessary eye for constellations that pose a threat to the company as a going concern. Many companies have a rudimentary controlling system, so that decisive developments cannot be measured and controlled. With the very long phase of a positive overall economic situation, many organizations have forgotten to pay attention to risk signals. The financial and economic crisis of 2007-2008 was the great last crisis before Corona and many decision-makers are mainly aware of positive developments. The mechanisms of risk management should be well established and anchored in the company.
THE MAK’ED TEAM carries the making in its name. Consulting becomes effective if the goal-oriented implementation is also carried out. We are good at that because we want it to work. Our experience covers almost all situations that an entrepreneur’s life and a company’s life can bring with it.
