It would be an understatement to say that the past few years have been challenging for many businesses. Rising costs, reduced demand, cash flow pressures, or the loss of a significant customer can quickly place even a well-managed business under strain.
While every situation is different, one thing is consistent: acting early almost always provides more options than waiting until a problem develops into a crisis.
Seeking professional advice at an early stage may avoid much larger costs later. A relatively small investment in timely advice can prevent disputes, preserve valuable business relationships and identify practical solutions before problems escalate.
A common misconception is that lawyers or other professionals only become involved when litigation has started or insolvency is unavoidable. In reality, some of the greatest value is provided well before either of those events occurs. Timely advice often enables business owners to understand their legal position, identify potential risks, and to develop practical, commercial solutions.
Some of the early warning signs that should prompt a conversation include:
Customers taking longer than usual to pay their accounts. Increasing pressure from creditors or suppliers. Inland Revenue arrears beginning to accumulate. Difficulty meeting loan repayments or relying heavily on overdraft facilities. Concerns about complying with contractual obligations. Disputes developing with customers, suppliers, shareholders or employees.
These issues do not necessarily mean a business is in serious trouble, but they are often indicators that it is time to review your position in order to consider the available options.
Early advice can make a significant difference and we regularly assist clients by:
Reviewing commercial contracts and identifying potential risks. Advising directors on their duties under the Companies Act 1993. Negotiating payment arrangements with creditors and landlords. Recovering outstanding debts. Assisting with business restructures and refinancing. Advising on shareholder issues and business succession. Resolving disputes before they become expensive court proceedings. Working alongside accountants and other advisers to develop practical solutions.
Often the very fact an advisor has become involved can provide a level of assurance. Creditors, landlords and lenders are generally more willing to negotiate with businesses that engage honestly and proactively. Early discussions often lead to payment arrangements or revised commercial terms that allow a business to regain its footing while preserving valuable business relationships.
For company directors, obtaining advice before making significant decisions is particularly important. The Companies Act 1993 imposes duties requiring directors to act in good faith and to avoid reckless trading or incurring obligations that the company cannot reasonably be expected to perform. Early advice can help directors understand those obligations, make informed decisions with confidence, and reduce the risk of personal liability.
At its heart, professional advice is preventative rather than reactive. The objective is not simply to solve problems after they arise, but to help avoid those problems before they do.
An early conversation may be one of the most cost-effective investments you can make, helping you preserve options, protect your business and focus on achieving the best possible outcome.
After more than 20 years practising law in the UK, Nick returned to Hawke’s Bay in 2023, bringing extensive experience in residential and commercial property, asset planning, estates and trusts. Having advised a wide range of clients, including high-net-worth individuals, investors, public entities and first home buyers, he led a team of solicitors and paralegals at a London law firm.
Nick Aveling Associate, Bramwell Bate Lawyers 06 872 8210
