Q&A: Managing the stress of insolvency

Composite image: James Flaherty / Getty Images

In 1991, on a flight from London back home to Sydney, James sat next to a stranger that would help set the course of his career. In the air, the two passengers talked about the internet and the evolution of technology.

"He said to me, 'the internet is going to be huge. You'll see',” James recalls.

"We spent the whole flight from London to Australia trying to figure out how we could make money from the internet."

Since that time, James consciously built his career around the internet and technology. A sales operations role exposed him to collaboration and other technology tools, before he took up a job in a software firm.

"I helped them talk about their cloud accounting solutions, and explain the benefits and disadvantages from a security point of view. It was a fantastic job and experience."

As the role evolved, James found himself talking to accountants everyday.

"At the time, I thought to myself, 'One day I will go back and do something more strictly related to accounting’."

We spoke with James about how he merged his experiences in accounting and technology, and the advice he now shares with businesses that are struggling.

Q How did you make the transition from providing consulting services about cloud solutions into accounting?

I was travelling around Queensland speaking to small business owners and a number of things stood out to me. One was that I noticed small business people viewed their accountants as trusted advisers. At the small end of town especially, small business people rely on their accountants as peers and confidants.

A small business owner wants somebody they trust, who is empathetic and who they can talk to about their challenges. I found it really inspiring to see how accountants often became confidants and provided so much more than just a service.

I ended up taking up a position as Business Services Leader at GM Advisory, and later became a partner. My work is a mix of business development consulting and small business advisory. I’m often working with business owners to improve their situation by getting them ready for a small business reconstruction or supporting the principal of a firm to improve their business offerings. It’s really great work. It’s exciting for me to help turn businesses around.

Q Leveraging your experience with small business owners, you’ve founded two platforms that bring together related professionals who work in the insolvency industry. How did you build these communities and what do you see as the value of a network of related professionals?

Insolve is a panel of independent insolvency practitioners who are qualified, reliable and trustworthy. They’re used to dealing with small businesses and my aim is that they are seen as the go-to people when a business is really struggling.

I see my role almost like a band manager. You have a bunch of rockstars and I’m the person who can’t sing as well or play an instrument but I'm a very good all-rounder and great at bringing the right people together. That’s what a convenor does. I’m not a liquidator myself but people seek my opinion because I have a detailed understanding of what’s happening in the industry and where to get the best advice.

Often a business owner may not be sure what the problem is or may need a second opinion. Thesolvers.com.au is a platform of consultants, accountants, lawyers and insolvency practitioners. A member might be working with a business in need or in distress, and they can help that business by connecting them with another trusted practitioner to tackle problems that come up.

I started both these platforms because I want business people to get help from qualified and trustworthy professionals. The internet is a wonderful tool but it also spreads disinformation and very poor advice. I want to make sure people have access to the right advice from people who have the right experience and appropriate professional memberships.

Q What do you see as the key challenge in the insolvency industry?

Try as I might, it’s still very hard to get people to go and talk to a liquidator. The challenge is getting someone to see an insolvency practitioner or suitable specialist consultant in time, while there’s still hope for their business, rather than when it’s gone bust. There’s a proverb that I often think of: The best time to plant a tree was 20 years ago. The second best time is right now.

It’s a really difficult job but it is rewarding when business people benefit from our help. We also face a challenge in getting a business owner who approaches an insolvency practitioner for small business reconstruction to go in with open arms and to say, ‘This is where I’m at, this is everything you need to know’.

If they are willing to maybe feel a little vulnerable, they will get a much better outcome than if they close their arms and try to hide things. That’s when things can go very wrong.

Q You host a podcast with fellow IPA member Chris Baskerville called The Sounds of the Baskerville. How did this come about and why did you determine a need for a podcast focusing on business and insolvency?

The two of us cooked up this idea to start a podcast that covers small business reconstruction and answers common questions: ‘What should I do if I’m bankrupt? What should I do if my small business has cash flow problems? What do I do if I have tax debt?’.

We talk about very serious issues but it doesn’t have to be dry, and we have a lot of fun with it. I’ve learnt a lot over the period we’ve been hosting the podcast about the kinds of questions to ask. We have more than 60 episodes now and have spoken to auctioneers, credit bureaus, other insolvency practitioners and mortgage brokers – all sorts of stakeholders with knowledge about what to do and what not to do when a business hits hard times.

Q Supporting business owners who have hit hard times doesn’t always lead to a positive outcome for the business owner. Do you find this work can take an emotional toll?

Anyone working in insolvency needs to have an emotional shield so that they can empathise with the business owner, but also not get so affected that they can’t help someone in need.

Qualified liquidators and bankruptcy trustees have an especially tough job. All of them have ways to manage conflict and the emotional side.

The people I work with are in the business of helping people to stay employed and helping business owners keep their doors open. Sometimes you can save them; sometimes you can’t.

A lot of people in business also see their business as part of who they are. They spend 60-80 hours a week in a job so a big part of who they are is the business they’ve created.

They’re in an emotionally tough time. You’re dealing with people who might, inadvertently or not, project their stress onto you. How do you manage that? How do you protect yourself but also make sure you’re doing the right thing for the business owner or for the people they owe money? It’s not easy, and unfortunately, I think there might be more hardship to come with interest rates and inflation so high, but it is rewarding work to support people through these hard times.