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Business recovery: these are people we’re dealing with

Author: ICAEW Insights

Published: 20 Apr 2021

Out of necessity, insolvency practitioners are focused on compliance and best practice. But their interactions with people who have built businesses are often deeply personal – this is why empathy is vital when advising those involved in a business in distress.

“We support people who have had the courage to set up a business, invest in it and work it up,” says Tom Ahmad, Licenced Insolvency Practitioner and co-founder of Bailey Ahmad Business Recovery. “It’s very personal being in business. It's all about relationships and interactions between people. We get involved when something's not gone right. I don't know any business owner that's set up their business with the expectation of failure.”

He is very supportive of the entrepreneurial community. “I respect the courage it takes to set up a business, create and deliver something that someone will pay for,” says Ahmad. “These are the people who create jobs, opportunity, progress, and they all have to start somewhere. To succeed they must learn and in my experience, the most valuable lessons come from the mistakes we make.”

Ahmad points out that if things go wrong, people who need advice from an insolvency practitioner usually fear judgment. “They've usually been successful to a point. Often, entrepreneurs see failure as something terrible but really it’s learning,” says Ahmad. “We have little failures every day and we adjust to them. Most of the time we can recover, but in a business setting, sometimes you need to recover with the help of a specialist.”

Difficult messages can be delivered in a sensitive way

Most of Ahmad’s clients come to him through a referral from accountancy practices. The initial approach is consultative, with business owners and directors asking for an opinion on how to proceed in often difficult trading circumstances. “As you can imagine, having to seek advice from an insolvency practitioner is at best something most people would rather avoid but can be deeply worrying for some, which might delay them in seeking help.” 

Sometimes his job requires him to make tough recommendations in the face of a genuine problem, albeit he believes difficult messages can be delivered sensitively. The first round of conversations is usually based on the facts: cashflows, assets and liabilities. “That is the easy bit, frankly,” he says. “The hard bit is often getting people to seek help early and open up when naturally apprehensive, worried about judgment and feeling vulnerable.” 

Ahmad says his job is to implement a solution to the problems a business is encountering, be that recovery, restructuring, insolvency or restart. “We do that in an open and honourable way,” he says. “It is important for our profession and the wider business community to advocate empathy and not be quick to judge entrepreneurs who suffer a business failure. By doing so, we create space for entrepreneurs to feel safe in seeking help and support sooner.”

Speak out on the emotional and human side

In the past, he says, mental health was rarely discussed. “We tended not to talk about how you deal with the mental health impact of all this. How we might better respond to people involved and affected by business failure emotionally, not just technically,” he says. “We, as a profession, can and should do more to educate ourselves and speak out on the emotional and human side of business.”

He continues: “We are part of what I think of as a very traditional industry. It is very law and compliance-driven. We talk a lot about best practice, ethics, more information, more transparency, more disclosure, investigation after business failure – yes, all important. But it’s my hope that our profession comes together to promote training and practical soft skills and strategies to help us better respond to the mental health challenges often experienced by those who are impacted by a business in distress.” 

Ahmad predicts a high volume of business start-ups and restarts in the coming months and years. “People are going to have to be creative about earning an income and will find a way to get through whatever challenges they face to succeed,” he says. 

And he says that the pandemic will stress test the insolvency profession. “I think we will learn a lot from it. It will teach us things about how we operate as an industry. Maybe we spend too much effort on things that matter less. We will find out where we could focus more and that could shape how we develop the next generation,” he says. 

But, for Ahmad, business recovery starts with understanding, empathy and care for people.

Insights Special: Business Rescue

Conversations are intrinsic to business rescue. Be they with a chartered accountant, a bank, HMRC or any other trusteed individual, business restructuring, refinancing and recovery depend upon communication.

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