Business failure is normally the result of an accelerating process rather than an individual catastrophic event:

The process starts with simple underperformance resulting in poor profitability. Over time, continued underperformance translates into reduced reserves and investment and the balance sheet starts to show signs of distress. Time and available resources are starting to run out.

As the business begins to get into real difficulties the slope down into crisis becomes steeper. Problems now start to compound each other (eg you are on stop with the supplier so you can't get the raw materials that would allow you to complete the order and bill the client, but you can't collect cash from the client until you have completed the whole order). At the same time interest charges, purchasing inefficiencies, and late payment penalties increase costs and eat into the available cash leading eventually to failure.

How strong or weak is your business?

Using the downloadable form, tick each strength or its opposite weakness and then consider:

Remember, you can heal the sick, you cannot raise the dead. If there is no reasonable prospect of saving the business, you are running an insolvency risk and need to seek professional advice using local help.