On the Other Side of the Door

“If opportunity doesn’t knock, build a door.” – Milton Berle

Not too long ago, I wrote an article about why you shouldn’t start a nonprofit. My point in the piece was that too often, people have great intentions for social good in their community, but there are broader implications for those who want to start a charity to consider.

Sure enough, a couple of days ago I received a call from someone asking my thoughts about starting a nonprofit. However, this article isn’t about the pros and cons of establishing that type of business.

It’s about knowing what’s on the other side of the door.

What do I mean by that?

As I listened to the call, this person told me that he was considering leaving his job as a senior executive in business, but he had several concerns. He talked about his worries that he had the expertise to do what he wanted to do. He also spoke about his fears that he would be leaving his wife in a high-pressure position to be the primary breadwinner in the family. He would not earn the money he was making now, and he didn’t even know if this venture would be successful. Indeed, he would end up earning significantly less money than he was currently making.

Ultimately, this person’s decision was his decision, and I never gave him an answer to his question of what he should do. It wasn’t for me to decide. That was a decision between him and his wife.

But, I did ask him to keep a thought in his mind.

What’s Behind the Door?

I asked him to think about what was on the other side of the door if he moved into the nonprofit sector, and then I asked him to consider what was on the other side of another door if he stayed in place.

The exercise is one I’ve used, and if you haven’t used it for yourself or in your team management, it might be something you consider.

When you are at an inflection point in your life, and you’re facing a significant decision, looking at what you believe will be behind the door is a great way to gain understanding. It helps you project into the future. The more vivid the picture, the better the exercise is in helping you make a decision.

Gaining Clarity

The reality is that nothing is perfect. Everything comes with its opportunities and challenges. If you think that any path is the absolute ideal and will make your world supremely better, that’s not the way the world works. Everything takes time, and everything exacts a sacrifice. No path, no journey comes without a challenge.

However, by visualizing what’s behind the door and seeing what your world could look like, including considering the challenges that will likely come up along the way, will help you understand what door you want to open. It will help you get the clarity you need to make the best decision for you.

Hiring an Ideal Insolvency Practitioner

Business insolvency can be a very stressful and messy situation regardless of whether it has to do with a limited company, a partnership or a sole trader. When you choose a great IP, you can bring great changes into your business, regardless of how bad the situation really is. It can also affect the cost and the outcome of the matters that you are dealing with when a professional is working to make things better for you.

For most business owners, hiring an IP is not something they have experience in. Because of the roles the insolvency practitioners do, not many people want to engage them because they may still be in denial that there is actually a deep problem looming in their businesses. However, if a business is running into financial difficulties that are very serious and you have an insolvency threat, talking to an insolvency practitioner is the best and most prudent thing that you can do.

Acceptance

If you really want to help your business, then you need to accept that there is a problem that should be addressed as soon as possible. It can be hard for anyone in business to accept that there is indeed a problem coming and that they may be becoming insolvent.

You will know that you are becoming insolvent if you are unable to meet all the financial liabilities that you are supposed to fulfill. This should not be confused with having cash flow problems, but there is a very close connection between the two. A professional can tell you a lot about that is happening with the company and offer you the required support and advice.

Once you have positively identified the potential or actual insolvency, then the directors in the case of a limited company have a responsibility legally to protect all the creditor’s interest. At this point, you need an insolvency practitioner.

Who can take the role of an IP?

In most cases, an IP is an individual or a firm of IPs. Such a person need to be qualified and they need to pass different specialist exams. In most cases, such a practitioner is a lawyer or an accountant with the understanding of the law and the processes involved in insolvency.

Choosing the best practitioner

There are many ways in which you can locate a good IP and this includes associations and the government. You can also talk to a solicitor or accountant who can recommend someone or offer the services themselves. There are many costs that are associated with insolvency. Before you hire an IP, you should discuss deeply how costs could be calculated to come up with an estimate of the price. However, cost by itself should not be the only determination of the IP you choose.

Insolvency Practitioners And Their Roles

An insolvency practitioner is a person authorized and licensed to act in connection with an individual, a company or a partnership that is insolvent. In many cases, insolvency practitioners are specialists in accounting firms or accountants.

The insolvency practitioner should have the necessary licensing in this field having passed the set examinations. He should have experience in the field and he should also be associated with a regulator who is satisfied that he is actually fit to act in that capacity.

It is important that the IPs follow the law and the work done has to be monitored closely by the regulators so as to ensure that everything is done in accordance with the law. A regulator should be ready to monitor all the license holders to ascertain that they are indeed capable of carrying out the work.

What the job involves

The appointment of the IPs is aimed at sorting out situations that are quite difficult. Sometimes it is all about rescuing businesses. When this isn’t possible, the insolvency practitioner tries his best to:

Sell assets of the company, partnership or person with debts
Collect all money due to the company, partnership or person
Agree all claims from creditors
Distribute money that is collected after costs are paid

The work of an IP includes handling lots of interests, but the main thing is to handle the creditor’s interests. When creditors give all details of the claims they have, an IP only agrees such claims when he is certain that he will get the funds.

In most cases, advice is given to a debtor before the formal process of insolvency starts.

How to make a complaint regarding an IP

Before you make complaints against the IP, make sure you contact them directly. The concerns may be as a result of some misunderstanding about the role of the IP. It is a great idea to raise the issues with the IP himself as many things can be averted by dialogue.

A licensed IP can advise and undertake different appointments in all sorts of insolvency procedures and this includes liquidations, voluntary arrangements, bankruptcy, receiverships, and administration and so on.

Bankruptcy

This is the personal insolvency carried out after concluding petitions in court. This is usually the case when a person isn’t able to pay debts. The Most valuable properties are taken and then after the sale, the money is distributed among the creditors. When declared bankrupt, the person who is bankrupt cannot act as the director of the company. If they are individual traders, the trade must be in their name. The IP acts as trustee when it comes to bankruptcy.

Liquidation

This is the procedure where different assets are collected by an IP acting as the liquidator. The assets are then sold and money utilized in paying off creditors in a specified order. An order for liquidation is usually made by the courts. However, the directors can also decide to carry out liquidation themselves.