Financial problems are a fact of business life. The key to overcoming them is to anticipate them and act quickly.
Business owners' lack of experience but also external factors beyond their control – new competitors, defection of suppliers or a rapid turnover of staff – can make a business vulnerable. Smaller businesses are particularly prone to financial difficulties as they often lack resources to adapt to rapidly-changing market conditions. It is essential they keep a close eye on their finances, especially as potentially serious problems are not always immediately apparent.
A 2007 Communication from the European Commission lays out proposals to actively help businesses at risk of financial meltdown – mainly providing affordable expert advice to enable early action and prevent bankruptcy. National insolvency systems should provide more options for restructuring and rescue.
The European Commission's second chance in business website provides help and advice when it looks like a business is getting into difficulty. It provides hints on spotting early signs of trouble, a financial health check tool and golden rules for businesses in difficulty. It also includes a list of organisations offering help and advice in each EU country.
Check also the legislation on this topic in: