Telling staff and creditors

Staff and creditors are different conversations with different stakes, but men in this position tend to handle both the same way: avoid them until the news travels around them and lands worse than if you'd delivered it yourself.

Telling staff

Tell them as a group where possible, in person or on a call, not one at a time through the grapevine. Say what's happening in plain terms — the business is closing, or is likely to — and what you know about their entitlements and timing, even if the honest answer is "I don't know exactly when yet, but here's the process." Employee entitlements (wages, accrued leave, and in a formal liquidation, potentially the Fair Entitlements Guarantee scheme which covers unpaid wages, leave and redundancy pay when an employer can't) sit ahead of almost every other creditor for a reason — they're not optional, and staff deserve to know what's actually being done about them, not vague reassurance.

Two things staff remember for years afterwards: whether you told them yourself, and whether you were straight about what you didn't know. Both are free and both matter more than anything you can offer materially in the moment.

References. Don't promise a reference in the first conversation if you're not in a state to write an honest, useful one yet. Say you'll follow up within a week, and then actually do it. A specific, honest reference sent a week later beats a vague promise made on the spot.

Telling creditors

The instinct is to go quiet — stop answering calls, let emails sit, hope it resolves itself before you have to explain. It rarely does, and going quiet is what turns a creditor who might have worked with you into one who escalates fast, because silence reads as avoidance or dishonesty rather than what it usually is, which is overwhelm.

Call or email before they chase you, even briefly: "The business has stopped trading. I'm getting advice on next steps and will update you by [date]." That single sentence, sent proactively, changes how most creditors respond. Trade creditors in particular are often more willing to negotiate a payment plan with someone who's communicated honestly than to write off a debt from someone who's gone silent.

Don't negotiate alone if the numbers are complex. Once you've had the insolvency advice from module one, let that person guide which creditor conversations you handle directly and which go through them. Some conversations genuinely need a professional in the room, particularly with the ATO or a secured lender.

What to say when you don't have an answer yet

"I don't have a firm answer on that yet, but I'm not avoiding the question — I'll come back to you by [specific date]." Say this instead of guessing, over-promising, or going silent. A specific date you actually hit rebuilds trust faster than a vague reassurance you can't keep.

The version of this that goes worse

The version that damages relationships for years isn't business failure itself — most people who've been in business understand that businesses fail. It's the version where the owner goes quiet, doesn't tell staff directly, doesn't answer calls, and lets people find out secondhand. That's the version people remember as a character issue rather than an economic one. You get to choose which version this is, even now.