Don't give up!

According to PwC the number of UK firms filing for insolvency in the first quarter was broadly similar to the same period in 2021.

But they also reported: “when the smallest firms and companies that were liquidated when solvent are stripped out, the figures show those filing while insolvent more than doubled in the first quarter…”  (our italics).

But why would a solvent company go into liquidation?

Well, there could be a number of reasons, perhaps related to family or lack of successors.

However, given the number of economic headwinds, including inflation, supply chain problems, labour shortages and energy costs, as BDO has reported business optimism has fallen by 4.82 points to 101.93, for the second consecutive month, perhaps it should not be so surprising that patience is wearing thin.

Don’t throw in the towel just yet!

We would advise businesses to hang on in there, especially if they are still solvent, conditions will eventually turn around as they...

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Lessons for business leaders from the platinum jubilee

70 years is a long time to have remained head of an organisation and to be dedicated to the duties it requires.

Yet the Queen has achieved this and retained the respect of most people, regardless of whether they support the idea of a monarchy or not.

She has often referred to the royal family as “the firm”, so are there lessons for business leaders who want to see their businesses thrive and endure for a long time?

The world has changed dramatically over this period, not only in terms of technology but also in terms of people’s attitudes and behaviour.

So, mastering the skill of adaptability while retaining core values is a skill business leaders should aspire to.

There may be times when it is necessary to pivot a business in a different direction.

Of course, leadership requires both dedication and hard work, but another attribute recognised in the Queen is courtesy.

No matter to whom she is talking this is an attribute that she shows and one that business leaders...

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Walk away!

The most recent survey of small businesses carried out by the FSB (Federation of Small Businesses) has found that at least a third of small businesses have seen late payment of invoices increase over the last three months.

Its new chair, Martin McTague, has called on the Government to include in the long-delayed audit reforms a requirement for a board-level role with responsibility for payments.

Small Business Commissioner Liz Barclay has urged small firms to be more “brave” and reject unreasonable payment terms.

She said: “Some small businesses are beginning to say, ‘No, I’ll walk away. I’m not accepting 90 days’.”

Ms Barclay argues that small businesses have more power than they think because they drive the success of larger companies and the latter “are putting their reputations on the line by failing to pay smaller suppliers on time.”.

Fine words, but can you afford to walk away?

Perhaps the question should be...

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There are opportunities in even the grimmest situations

business growth growth May 19, 2022

Research by the UK organisation Make UK has found that almost three quarters of UK manufacturers have reshored their supply chains as a result of the disruption caused by the Covid pandemic and more recently the war in Ukraine.

“Nearly half (42%) of manufacturers have increased the proportion of suppliers based in Great Britain, with further reshoring in the pipeline for over two-fifths of companies,” according to their report.

This, together with the change in consumer purchasing habits moving to more online shopping has dramatically increased the demand for warehouse space.

According to latest research by Colliers, industrial occupiers are in a race for space as the UK is experiencing the lowest level of supply ever recorded, with only 18.1 million sq ft left, due to demand for logistics units continuing to be driven by the structural change in consumer spending patterns.

Colliers states that take-up in 2021 for industrial distribution warehouses of 100,000 sq ft+...

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Are there situations where process automation produces a worse result?

A shortage of candidates amid a high demand for staff has for some time been a complaint made by businesses.

The competition for suitable people has led to their offering higher starting salaries for new staff.

But the question has to be asked: how are they going about the recruitment process?

For several years now, candidates have been assessed using AI (Artificial Intelligence).

This method has become increasingly sophisticated as candidates are now being asked to answer standard interview questions in front of a camera while the software behind it notes thousands of barely perceptible changes to posture, facial expression, vocal tone and word choice.

Some companies selling AI recruitment tools even offer a reactive, AI-powered chatbot that will conduct the entire interview process.

But there have been examples of eminently qualified people being rejected at the first hurdle by these methods and in one recently-reported case and employee with a long track record of work with...

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Insolvencies are rising fast

Insolvencies are rising fast

But don’t give up now when help is at hand

The insolvency service figures for the first Quarter of 2022 make grim reading with totals at their highest since 2012.

Of the 4,896 insolvencies in England and Wales in Q1 4274 were creditors’ voluntary liquidations.

The Begbies Traynor Red Flag alert put the number of businesses in “critical distress” as up by 19% compared to the same quarter in 2021.

All this makes grim news for businesses that have survived the two years of disruption due to the Covid-19 pandemic and despite considerable ongoing cost, recruitment and supply issues have been hoping for at least some improvement in their activity levels.

The most vulnerable, according to Begbies Traynor, are the hospitality and construction industries.

But businesses should not give up when there is help at hand. The sooner you act the higher your chances of survival.

We are experienced in assessing every aspect of a business and coming...

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Taking the longer view

employees Apr 29, 2022

Could taking on apprentices be a better business solution to the staffing crisis during the current economic uncertainty?

It is understandable that following the easing of all the Covid pandemic restrictions businesses should be keen to go all-out for growth and therefore recruiting qualified staff.

But recruitment itself is currently a problem and in the face of all the other pressures including supply chain issues, rising energy prices and of course the Ukraine war, perhaps a slower, steadier approach would be more sensible.

Consolidating the current business and planning ahead would ease some of the pressure and this is where taking on apprentices may be a better way forward.

For businesses that are below the threshold of a £3 million payroll there is no apprenticeship levy and there is financial help for both taking on and training apprentices. There is a £1000 incentive payment for taking on an apprentice.

Then, depending on the size of your business, you pay just...

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The post-Covid restrictions dilemma for bosses and employees

covid-19 employees Apr 22, 2022

Restrictions may have been lifted but Covid levels in the community are still high and this can cause problems for both employer and their employees.

If someone contracts Covid the advice still is to self-isolate for at least five days.

However, this could result in employees losing three days of the statutory sick pay available from the Government, leaving them with just two days sick pay if they abide by the rules. SSP in the UK is just £96.35 per week.

To make matters worse, lateral flow tests are no longer free, so there is also a risk that someone with mild symptoms that are similar to a cold may not test themselves at all, carrying on working and risking spread of the illness to other colleagues.

In a previous post we advised employers to complete a health and safety risk assessment that includes the risk from COVID-19, provide adequate ventilation, clean more often and to ask people with COVID-19 or any of the main COVID-19 symptoms to stay away and enable them to work...

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A new Industrial Revolution?

How feasible is it to reshore our industries?

The Office for National Statistics has reported that the UK has suffered “significant challenges when acquiring and maintaining their stock”.

Well, no surprise there as businesses have been well aware that a combination of Covid, Brexit, higher energy prices, events like the blockage of the Suez Canal and, of course, now Russia’s ongoing war in Ukraine has disrupted the global supply chain.

But this week the paper CityAM is asking whether now is the time to bring manufacturing industries back into the UK, aka “reshore” them to ensure not only supplies of essential but also growth.

While not underestimating the challenge, the paper points out that the UK “is still the ninth largest manufacturing country in the world, producing £183bn of products and employing 2.5m people”.

Reshoring, it argues, will have benefits, including reducing products’ carbon footprint, reducing lead times and...

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A problem shared...

insolvency vat Apr 01, 2022

The start of April sees a number of additional burdens placed on businesses.

In addition to increased National Insurance contributions, there are the ongoing problems of supply chain issues and higher energy prices.

Also, the remaining temporary measures to protect insolvent businesses by restricting winding up processes have now ended and as of this month, businesses now have to pay back all VAT deferred in the period to June 2020 under pandemic reliefs.

As if all this were not enough, changes made to the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 in February this year put directors under increasing scrutiny from the Insolvency Service by extending its powers to investigate the conduct of directors of dissolved companies.

This makes it harder for businesses to use creditors’ voluntary liquidation (CVL) process to close down an insolvent company.

a problem halved?

Many CEOs and directors struggle on in silence sharing none of...

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