The company in crisis – what now?

The company in crisis – what now?

The vast majority of German companies are still satisfied with the business situation thanks to the booming economy. The currently low oil prices have developed into a small economic stimulus program in Germany . The low interest rates also ensure positive consumer climate index values. Citizens are currently not thinking about saving, but spending their money on consumption, which also has an impact on the economy. Despite the Ukraine crisis and the slump in business with Russia, as well as other geopolitical difficulties, German exporters sold more goods around the world in 2014 than ever before.

The company in crisis – what now?

Unfortunately, not all companies benefit from booming business in good economic times. Although the number of company bankruptcies is currently declining, financial experts advise treating the decline with caution, as the German economy is increasingly being sucked into the European sovereign debt crisis. How to recognize and what to do when a company is in crisis?

Again and again, mismanagement or unforeseen difficulties drive many companies into a crisis that quickly leads to ruin. It is usually a question of liquidity and strategy crises that cause difficulties for companies. If a company finds itself in a crisis, the responsible managers must act decisively.

In order to find out what measures need to be taken to get a company back on track in the crisis, those responsible should seek external help at an early stage. Companies that are going through times of crisis can get advice from management consultants who will find a way out of the crisis for any form of corporate crisis with the necessary experience, methods and tools. Interested parties can obtain further information on the subject of “companies in crisis” on the relevant Internet pages.

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Reasons for the corporate crisis
Of the various causes that drive a company into insolvency, one of the main reasons is the lack of capital resources, which can very quickly lead to financing difficulties, e.g. B. a customer gets into payment difficulties. Therefore, a conscientious business plan with precise financial planning is of essential importance, especially when starting a new company.
Decisive reasons for a corporate crisis are bad investments made under predetermined framework conditions such as government tax, economic and social policies. Structural changes and sudden changes in the economic situation as well as incorrect market assessments and a lack of competitiveness put companies under additional pressure. Last but not least, location problems and an incorrect structure of the organization with an inefficient structure of the company are an obstacle to successful action on the market.

If a company is insolvent, the court must initiate insolvency proceedings. If word of the insolvency of a company in the crisis gets around in the market, the creditors can already apply for insolvency proceedings.
In order to be successful with a company, entrepreneurs must be able to identify the risks and opportunities very early on. Early detection prepares the company for the future in an ongoing process. Company managers who recognize a company crisis should specify the course of the crisis and take into account the crisis phases and crisis stages for crisis management of the crisis process.

Measures to combat the corporate crisis
Research has shown that 71% of corporate failures are due to management error. Misjudgments, planning deficiencies and sales problems are therefore among the main reasons for corporate crises. Personal fault through neglect of the management as well as fraudulent actions are also to be regarded as reasons for company crises.

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The Rationalization and Innovation Center of the German Economy eV (RKV) offers companies in crisis expert advice through a joint program. Management consultants help companies that are in difficulty to correctly recognize the risk of insolvency by correctly interpreting the balance sheet figures, which are highly dependent on the industry. If there is a threat of insolvency, a restructuring concept must be developed for the company in crisis.

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