What should I do first if my business is on the edge of collapse?

If your business is on the edge of collapse, your absolute first priority is to understand exactly where you stand financially and seek professional advice immediately—within days, not weeks. Start by preparing or updating an honest cashflow forecast for the next three months showing when cash will run out and which critical payments you cannot meet. Simultaneously, list all creditors with amounts owed and payment deadlines, identifying which are most pressing (typically HMRC, staff wages, and secured creditors). Contact an insolvency practitioner for an urgent confidential consultation—most offer free initial assessments and can provide objective advice about whether the business can be saved or whether formal insolvency procedures are necessary. This conversation should happen before you take any major actions like disposing of assets, making large payments to creditors, or communicating with stakeholders, because professional advice will help you avoid actions that later appear as misconduct. While seeking advice, continue to maintain accurate financial records and document all board discussions and decisions—this paper trail is your protection against later allegations of wrongful trading. If you have co-directors or business partners, convene an urgent board meeting to discuss the situation openly and ensure everyone understands the gravity of the position. Identify your largest creditor exposures: has anyone issued statutory demands or threatened winding-up petitions? Do you have immediate HMRC deadlines? Are suppliers withdrawing credit or demanding immediate payment? Understanding which creditors pose the biggest immediate threats helps prioritize where to focus negotiation efforts. Review any personal guarantees you've signed because these create direct personal exposure if the company fails. Consider whether there are any quick wins available: can you collect outstanding debts faster, sell surplus assets, or negotiate payment deferrals with cooperative creditors to buy time? However, be realistic—if the business is fundamentally unviable, these measures simply delay the inevitable at the cost of increased debt. Once you have professional advice, you'll understand whether options like CVAs, administration, or voluntary liquidation make sense, or whether informal negotiations might stabilize the situation. Throughout this process, maintain absolute honesty with your adviser—they cannot help effectively if you minimize problems or hide information. Finally, take care of your own mental health: business failure is traumatic, and you need to be thinking clearly to make good decisions, so ensure you have emotional support from family, friends, or professional counseling services. The directors who best navigate company collapse are those who face reality quickly, seek expert help immediately, act transparently, and make decisions based on facts rather than hope or fear.