My business is losing money. What now?

I know how it starts. You cut costs as far as they will go. But revenue keeps falling. Paying gets harder, and you start putting things off. This invoice next week. That supplier next month. A little each time.

I have been there. I had several companies, and not all of them made it. This is what I wish I had read back then.

Putting things off is not a plan

Delaying feels like buying time. In reality you buy nothing. Every week you wait, what you can still do gets smaller. There is less money, creditors get less patient and you have fewer options.

The first step is to stop hoping next month will be better, and to look at what is really going on.

A loss is not the same as a cash shortage

A loss shows up in your profit and loss account: your costs are higher than your revenue. A cash shortage shows up in your bank account: you cannot pay what is due today. You can make a loss and still have money, and the other way round. You need to know both, because each needs a different answer.

Find where the loss is

"The business is losing money" is rarely true for the whole business. Usually it sits in one shop, one client, one product group or one type of job. As long as you only see the total, you trim a little everywhere, including in what does make money.

I once kept a loss-making shop open far too long. The notice periods of my staff had quietly grown so large that closing seemed more expensive than carrying on. I only saw that afterwards.

As a director, you have to act

If you run a Belgian BV, this is not optional. Are the net assets negative, or about to become negative? Or is it no longer certain that the company can pay its debts over the next twelve months? Then the board must call a general meeting within two months, with a special report on how you intend to save the business. This is the so-called alarm bell procedure. It is not a formality: it forces you to put in writing what you are going to do.

Talk early, and to the right people

Your accountant knows your figures. DYZO, the Flemish support service for entrepreneurs in difficulty, helps for free and in confidence. A lawyer who specialises in insolvency knows the procedures. Call them now, not when the water is up to your neck. Who does what is explained in who helps business owners in Flanders.

What I learned myself: everyone does their own part. Find at least one person who thinks with you about the whole picture, not just about their own task.

Judicial reorganisation: protection, not a guarantee

A judicial reorganisation gives you protection from the court. For six months, extendable to twelve, creditors cannot seize assets for old debts. There are three forms: an agreement with a few creditors, a collective agreement with a repayment plan of up to five years, or the transfer of your business to someone else.

Be aware: a collective agreement must be approved by a majority of your creditors. I tried it myself, and my proposal was received with real hostility. Creditors mainly see money they will not get. Be ready for that.

What you can automate

The alarm bell itself. Your net assets and a twelve-month cash forecast can be calculated from your accounts every month, with an alert when either one starts moving the wrong way. Then you hear the bell before it rings.

What I say when someone calls me

"We need to sit down, urgently." First we look at what can still be saved. If things need to be cut, it happens immediately and hard: costs, staff, everything that does not bring in money. If needed, under the protection of a judicial reorganisation. And if it really cannot go on, we prepare the end properly. That is what what if there is no way out is about.

The claim

A loss is a problem. Waiting turns it into a disaster.

Tell me what keeps you up at night. No-obligation conversation. No sales talk.

This article is my own experience, not legal advice. If you are in this situation, talk to DYZO or to a lawyer who specialises in insolvency.