The earlier its director acts, the better a business in difficulty recovers. Here, in order, are the seven reflexes we recommend for the first few weeks.
1. Measure your cash, week by week
Before making any decision, build a 13-week cash flow plan: expected receipts, committed payments, and the week in which cash would turn negative. That is your horizon: it tells you how much time you have to act.
2. Identify the real cause
A cyclical difficulty (a lost customer, a sudden rise in costs, a delayed project) is not handled like a structural one (margins that are too thin, an organisation that is too heavy, an outdated offering). The remedy depends on the diagnosis: that is the whole point of a short, quantified audit.
3. Don't go it alone
- Your expert-comptable (chartered accountant), to make the figures reliable.
- The information centres on preventing business difficulties (centres d'information sur la prévention des difficultés des entreprises, CIP), which offer free, confidential meetings.
- The president of the commercial court (tribunal de commerce), who can see the director in a prevention meeting, in complete confidentiality.
- Your CCI (chamber of commerce and industry), which can direct you to the schemes available.
4. Talk to your partners before they find out
A bank, a key supplier or a strategic customer is far more willing to agree to new arrangements when told early, with a plan. For tax and social security debts, the CCSF (commission des chefs des services financiers) can grant payment plans, confidentially.
5. Take quick action on cash
- Chase customer receivables and shorten collection times.
- Reduce slow-moving stock and postpone non-essential purchases.
- Freeze expenditure and commitments that can wait.
These measures do not turn the business around, but they buy the time to do so.
6. Choose the right framework: out-of-court or collective
Mandat ad hoc and conciliation (negotiations with creditors, with the help of a court-appointed third party) are confidential; sauvegarde (safeguard proceedings) and judicial reorganisation (redressement judiciaire) are public but protect the business from its creditors. The earlier you act, the more out-of-court options remain open. Our guide sets out the differences between these procedures.
An obligation to be aware of: if the business is insolvent (cessation des paiements), meaning it can no longer meet its liabilities due out of its available assets, the director must apply for proceedings to be opened no later than 45 days afterwards, unless they have applied for conciliation within that period.
7. Build a costed plan, and manage it every week
A 100-day turnaround plan: specific actions, an owner for each, and indicators tracked every week. If management is overstretched or needs to hand over, an interim manager can take the helm for the duration of the turnaround.