One of the earliest and most consequential decisions an office holder makes is whether a business can continue to trade. It is rarely a purely financial judgement. A business can be balance-sheet insolvent and still worth trading for a period, and a business with apparently healthy revenue can be impossible to run safely from the day of appointment. The difference is almost always operational.
The first question is whether trading is cash positive over the period in question. That means post-appointment income against post-appointment cost, assessed weekly rather than annually. Seasonal businesses complicate this considerably: a holiday park in July and the same park in November are two entirely different propositions. Working out the answer requires someone who can read a real trading operation quickly and produce a credible short-term forecast, not an extrapolation from historic accounts.
The second is whether the people needed to run the business will stay. Staff confidence collapses quickly when nobody is on site answering questions, and the people who leave first tend to be the supervisors and duty managers who actually hold the rota together. Once they go, the labour cost of covering their shifts rises sharply and service standards fall, which erodes the very value trading was meant to preserve. Putting an experienced manager on site immediately is what stops that spiral.
The third is supply. Critical suppliers — food, laundry, utilities, cleaning, waste, maintenance — will often continue on clear post-appointment terms if there is a named person to deal with and payment certainty. Where nobody takes that conversation on within the first day or two, supply lapses and sites close for reasons that had nothing to do with the underlying decision.
The fourth is compliance and licensing. Premises licences, food safety, fire risk, statutory inspections and insurance all need to remain valid and evidenced while trading continues. This is not administrative housekeeping — a lapse here can force closure and creates personal exposure. It needs an operator who knows what has to be in place and can demonstrate it.
The fifth is control of the sites themselves. Keys, access, takings, stock and assets need to be under single, accountable control from day one. Where several sites are involved, that means one lead with visibility across all of them and consistent reporting from each.
Where those five conditions can be met, trading usually beats immediate closure. It preserves the option of a going-concern sale, protects employment, avoids the immediate costs and claims that closure triggers, and gives the office holder time to market the business properly rather than under duress. Where they cannot be met, an orderly wind-down managed by experienced operators is still far better than an uncontrolled one — staff handled properly, stock and assets accounted for, sites handed back in a defensible condition.
The practical point for practitioners is that the decision improves enormously when it is informed by someone who has run this type of business. An operational assessment in the first 48 hours — cash, people, supply, compliance, site control — turns a judgement call into an evidenced one, and the same person who carries out that assessment can take responsibility for delivering whichever route is chosen.
AJS identifies and deploys experienced operational managers into businesses in administration, typically within days of appointment. If you are weighing up whether an operation can continue trading, we can assess it and, if the answer is yes, put the manager in to run it.