One of the biggest concerns directors have when considering Small Business Restructuring (SBR) is how it might affect their business relationships. The good news is that SBR is designed to minimise disruption while you restructure your company's debts.
Unlike traditional insolvency processes, SBR allows you to maintain control of your business and preserve important relationships with employees, suppliers, and customers. This control means you can actively manage these relationships throughout the process, maintaining stability and building confidence in your business's future.
Impact on employees
Your team members are often your most valuable asset, and protecting their positions matters not just for them, but for your business's future success. SBR helps protect their positions and entitlements while restructuring company debt.
During SBR, your business continues normal operations, which provides significant reassurance to your team. They need to understand several key points about how the process affects them:
All jobs continue as normal
Wages keep being paid
Entitlements remain protected
Future opportunities stay open
Business improvements create stability
Clear communication proves essential for maintaining team confidence throughout the process. We've found that taking a proactive approach helps prevent uncertainty and builds support for the restructuring process:
Be upfront about the situation
Explain how SBR protects jobs
Share the improvement vision
Address concerns promptly
Maintain regular updates
Many companies find their teams become more engaged during SBR, as they see the business actively addressing challenges and creating a stronger future. This engagement often leads to improved performance and stronger team cohesion.
Working with suppliers
Supplier relationships often strengthen through SBR when managed well. The process provides a structured way to address historical debts while maintaining ongoing trade. This balance helps preserve critical supply relationships while creating a more sustainable future for all parties.
Your SBR practitioner plays a crucial role in managing supplier relationships. They help explain several important aspects of the process to your suppliers:
Historical debts enter the restructure
New supplies must be paid for
Trading can continue normally
The business is being strengthened
Professional oversight exists
Building confidence with suppliers requires a strategic approach. We've seen the best results when businesses take proactive steps to maintain supplier support:
Communicate early and openly
Pay new invoices on time
Update them on progress
Address concerns promptly
Maintain regular dialogue
Many suppliers appreciate the transparent approach SBR provides. They often prefer supporting a customer through restructuring rather than risking a total loss through liquidation. This preference creates opportunities to strengthen relationships during the process.
Customer relationships
Most customers remain unaffected by SBR, as your business continues normal operations. However, clear communication helps prevent any concerns that might arise. The key is maintaining service excellence while managing any questions about the restructuring process.
Your customers need reassurance about business continuity. When questions arise, focus on these key messages:
Products/services continue normally
Quality standards remain high
Service levels stay consistent
Contracts continue unchanged
Support remains available
Many businesses use SBR as an opportunity to review and enhance their customer service approach. This focus on improvement often leads to stronger relationships and increased customer loyalty. Consider taking these steps to strengthen your customer connections:
Focus on service excellence
Address any past issues
Improve systems and processes
Strengthen communication
Build deeper engagement
Professional relationships
Your existing professional advisors play an important role during restructuring. They often provide valuable support alongside your SBR practitioner, helping ensure a coordinated approach to your business's recovery.
These relationships prove particularly valuable when managing complex aspects of the restructuring process. Working together effectively requires careful coordination and clear communication between all parties involved:
Accountants
Lawyers
Business advisors
Industry associations
Banking partners
Insurance providers
Communication strategies
Effective communication proves crucial during SBR. Different stakeholders need different approaches and information, but all communication should maintain professionalism and transparency.
When planning your communication approach, consider timing carefully. Different groups need information at different stages of the process:
Key employees first
Critical suppliers early
Main customers as needed
Other stakeholders appropriately
Regular updates throughout
Celebration of milestones
Next steps
If you're considering SBR, take time to plan your relationship management approach. The effort you invest in maintaining and strengthening relationships during restructuring often pays significant dividends in terms of business stability and future growth.
Contact our team for specific advice on managing your situation. We can help you develop strategies for:
Communication planning
Stakeholder management
Timing considerations
Professional support
Implementation planning
Relationship preservation
Remember: Strong relationships often emerge from challenging times when managed well. SBR provides an opportunity to demonstrate leadership and build trust with all your stakeholders.
Read next: Director's role in SBR: Understanding your responsibilities
Previous: SBR costs explained: Understanding fees and return on investment
Or back to: Small Business Restructuring (SBR) Guide for Company Directors
