What is a “zombie business” and why is it important?

Whether it’s George A Romero’s classics like Night of the Living Dead; Simon Pegg’s still funny Shaun of the Dead; the bleakly compelling Walking Dead and now The Dead Don’t Die – a comedy with Bill Murray and Adam Driver that has opened the Cannes Film Festival this week.

Partly because we all love a good scare but also because in all of these movies the zombies are cyphers and metaphors for the bigger issues of the time.

For Romero it was racism and rampant consumerism – that’s why Dawn of the Dead was set in a shopping mall. In The Dead Don’t Die – the latest zombie trope sees them spending as much time staring at their smartphones and drinking wine and coffee as much as trying to munch on townspeople, making the point that our modern addictions are deeper seated than we think and perhaps won’t stop at the grave.

Funny thing though – zombies actually exist. Zombie companies that is.

Surviving not thriving

Not literally, although the idea of being served by mindless drones is a hilarious if slightly close to home one regarding certain fast food joints we frequent. Mark Thomas, author of ‘The Zombie Economy’ a book on the phenomenon defines them as: “A zombie company is one which is generating just about enough cash to service its debt, so a bank is not obliged to pull the plug. The company can limp along, it can survive, but it hasn’t got enough money to invest.”

R3, the industry body representing insolvency practitioners, goes further and estimates that over one in ten UK companies could be a zombie business – surviving only due to low interest rates but otherwise unviable and insolvent.

Stuart Frith, R3 President said: “These businesses are capable of ticking along, but growth and increased productivity is out of their reach. This means that thousands of UK businesses will struggle to deal with external or unexpected shocks which could be a problem if they all were to become insolvent at the same time.

“On the other hand, you have a significant proportion of businesses (11%) which are tying up investment and staff which could be used by more productive companies elsewhere in the economy.”

Joking aside, a zombie firm is not a good or healthy entity. It’s one thing if it genuinely stands a chance of recovery but so many organisations aren’t thriving, they are only surviving.

Not every business makes it. Some are successful for a time then falter and close. For others it’s a constant struggle to keep their head above water before they eventually slip under. All of them will teach their owners and directors valuable business and personal lessons that they can implement in future ventures but if they have the opportunity to put them to use.

Keeping a zombie business alive not only stifles personal skills, energy and ambitions but also slows general economic growth and productivity. They literally take up funding and capital that banks could allocate to healthier businesses that could really drive them forward.

Dignified end

If you’ve done everything you can to bring your company back to life and it’s just not happening or if you’re being held back from pursuing new and exciting ventures and opportunities because you’re keeping your business going then maybe it’s time to provide it with a proper and dignified end.

Our expert team of advisors will be able to talk you through all your available options depending on your situation. This could even include entitlements to you that you might not previously have been aware off.

Contact us today and start the process of laying the past to rest so you can finally live your best life. Life is for the living after all – ask a zombie.