Manufacturing
Manufacturing Insolvency
There is a pattern with the types of manufacturing business that we help out. They are rarely new businesses and have usually been established for many years. They also tend to have a long serving workforce and the company can not afford the redundancy costs to slim the business down.
Quite often the company will be in an overpriced factory using very old equipment that can not easily be moved. They sometimes do own the trademark or rights to some good products which has encouraged them to keep going waiting for the next big order.
Manufacturing is a tough and competitive business. The businesses that tend to make money own the rights to the product they are making – so no one else can make it and undercut them or they are making a high value specialist product.
Manufacturers can have long lead times in cash flow – tying up money in wages and materials that customers want quickly but sometimes take a long time to pay for.
Older established businesses can have problems with long serving staff that they cannot afford to make redundant as new processes and machines come along that could improve the production process.
Some of the first questions we ask this type of business owner is;
- Is the business viable going forwards so can it make money if restructured?
- Do the owners and directors have the energy to carry on?
There are various options to businesses that answer yes to 1 and 2 above. Earlier this year we liquidated a large manufacturing business based in the UK who were the largest producer of an artisan product sold through specialist shops. Although the business was liquidated, we sold the assets back to the directors so that they could carry on in a restructured and lower cost format. Assets are typically valued in this case by an auctioneer and often the best buyer is the current management which saves the costs of removing assets and selling them at auction.
David Kirk
Kirks Insolvency
David qualified as a Chartered Accountant in 1990 and Licensed Insolvency Practitioner in 1996. David will give you clear and plain language advice about your business’s options and make a recommendation of which route he thinks will work best for you.
★ ★ ★ ★ ★
“Very efficient and cost effective”
I have found Kirks Insolvency to be very reliable in terms of their dealings with us as their customers. They are clear in terms of the process and what it entails and are very prompt when it comes to communications. I would recommend their services.
Michale P
Business owner
WHy use Kirks
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