Archive Page 2

22
May
15

SMEs face barriers to growth

46 per cent of SME owners believe that a lack of access to skilled workers is the main obstacle to growing their business. The figure comes from research conducted by the British Insurance Brokers’ Association (BIBA) and Populus in which 500 directors, senior leaders and SME owners were polled.

A similar number (43 per cent) believe that cutting so-called ‘red tape’ would be the quickest way to stimulate growth among mid-market businesses.

For smaller companies – those with 10-49 employees – access to credit is a wide concern, with 26 per cent citing this as the biggest barrier to expansion.

According to the BIBA and Populus survey, the biggest barriers to growth are:

  • Lack of talent/skills: 46 per cent
  • Red tape: 43 per cent
  • Rising supplier costs: 36 per cent
  • Lack of tax breaks for small business: 24 per cent
  • Lack of business opportunities/sufficient network: 23 per cent
  • Availability of credit: 23 per cent
  • Knowledge of overseas markets: 13 per cent
  • Protective overseas markets: 11 per cent
  • Lack of cost-effective transport: 10 per cent

One of the biggest obstacles to growth is a lack of effectively skilled staff, so more needs to be done to encourage SMEs to take on apprentices.

Interestingly, availability of credit is seen as a barrier for nearly a quarter of those polled. Clearly, banks need to review their lending policies.

Hart Shaw is experienced at assisting SMEs and can offer a range of services to help owners facing any of the problems highlighted in the survey. For more details, please Christopher Brown, Business Recovery & Insolvency Partner on T: 0114 251 8850 or email: chris.brown@hartshaw.co.uk.  

 

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26
Mar
15

The TTIP of the iceberg

The future of the UK’s SMEs could be threatened if the Transatlantic Trade and Investment Partnership (TTIP) is introduced.

TTIP would bring benefits to big business, but SMEs seem set to lose out. A huge majority of UK firms are SMEs and they have been behind the economy’s growth for a long time. At the last Autumn Statement, the Government recognised this and rewarded them with a raft of measures designed to help. Now, their very existence could be hanging in the balance.

The aim of TTIP is to create a free market on both sides of the Atlantic and remove regulations, but a good many of these currently work in favour of SMEs. The European Commission’s Centre for Economic Policy Research has said that the agreement will boost EU economic output by 0.5 per cent by 2027. Export predictions are slightly more positive and put growth at 5–10 per cent over a 10–20 year period. However, given the current rapid rate of growth among SMEs, it’s hard to see why such a potentially disruptive move is a necessary intervention.

If you’re a small business in Europe that creates products adhering to EU rules, you may well find that under TTIP, your products are more expensive to produce than their US equivalents, due to their use of cheaper labour and materials that are not permitted under EU legislation. If some of the EU’s regulations are scrapped, a lot of US products that were previously banned are likely to flood the market and undercut prices.

A further problem for SMEs is the damage that TTIP could cause to local and home-grown businesses. In the UK, some councils operate schemes that aim to strengthen communities and help small local suppliers. In fact, the government recently pledged support to smaller businesses by setting a target for 25 per cent of its supplier contracts to be fulfilled by SMEs by May 2015. However, these arrangements would be deemed illegal under TTIP; further compromising the growth prospects of the UK’s SMEs.

For further details please contact Christopher Brown, Business Recovery & Insolvency Partner on 0114 251 8850 or chris.brown@hartshaw.co.uk.

 

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03
Mar
15

No business is immune from failure

The recent insolvency of the Rotherham based MTL Group is a timely reminder that no company, however large and high profile, is immune from failure. Administrators were appointed to MTL Group on 2 February 2015 with the immediate loss of 157 jobs and leaving creditors owed circa £10m.

The immediate effect of any insolvency is that creditors suddenly have a bad debt to deal with, and the larger the debt, the more likely that there will be a domino effect, causing otherwise solvent companies to have cash flow problems which could ultimately lead to failure. When the initial insolvency involves such a high profile company as MTL Group the risk of the domino effect only increases.

We are currently helping one of the creditors of MTL who has a large bad debt. Fortunately this company is financially sound but even so, the disruption to its immediate cash flow caused by MTL is such that we are currently negotiating with HM Revenue & Customs a time to pay arrangement for the current VAT Quarter. This will enable the Company to avoid penalties and make nominal payments until, over the next six months, it can claim VAT Bad Debt relief on the MTL debt and so satisfy the current VAT quarter.

Other Companies in less financial health may need to negotiate with their creditors generally and this is where an Insolvency Practitioner can provide valuable help. Of course this is dealing with the effects of a bad debt after it has happened. But what practical things can a Company do to lessen the effects of a bad debt before it happens?

The first thing is to know your customer, assess their credit worthiness and set a credit limit which reflects the commercial risk you are prepared to take, because were your customer to fail that is how much you stand to lose.  Once set, stick to it. We often see cases where although a credit limit was in place, the company has ignored it and gone on supplying the customer which has ultimately failed. If possible incorporate a personal guarantee into your credit application form, it may not always be possible, especially with larger customers, but it is worth trying. Finally consider credit insurance to protect against non-payment should a customer fail. The benefits of credit insurance are not only that the debt being insured would be paid, but that you will have access to improved credit intelligence on your customers.

If your require any assistance in dealing with your creditors or require further information about credit insurance please contact Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw on T: 0114 251 8850 or email: chris.brown@hartshaw.co.uk.

Christopher Brown of Hart Shaw

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw

 

 

 

 

 

 

 

 

 

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27
Feb
15

Have you checked for fraud and error?

Businesses are being advised to check their accounts regularly to identify errors and fraudulent acts that could potentially harm their business.

It comes after a new report produced by the Centre for Counter Fraud Studies at the University of Portsmouth uncovered an increase in the amount of fraud and error found within UK businesses and the public sector during the last year.

Their research revealed that these mistakes cost organisations more than £98.6 billion a year in turnover. It also discovered that losses from these activities as a percentage of annual expenditure increased by 18 per cent from 2010/11 to 2012/13.

The report’s figures are based upon valid loss measurement exercises, which estimate fraud in an organisation by checking one type of its expenditure for fraud and extrapolating it across the other areas of the business.

Fraudulent actions and errors can easily be missed within a busy business, but failing to spot them and rectify the problem could soon eat into profits and turnover.

This report highlights what a significant issue this is in the UK and with many small and medium-sized enterprises already facing issues with late payments; this is the last thing they need.

However, by ensuring you have a robust set of accounts and a monitoring system in place you can identify problems and deal with them quickly.

Many firms need to create a culture that makes reporting fraud and errors in the workplace second nature. Tougher internal guidelines should also be put in place to reduce complacency and prevent mistakes from happening in the future.

For further details please contact Christopher Brown, Business Recovery & Insolvency Partner on T: 0114 251 8850 or email: chris.brown@hartshaw.co.uk.

Christopher Brown of Hart Shaw

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw

 

 

 

 

 

 

 

 

 

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26
Jun
14

Hart Shaw Business Recovery & Insolvency wine tasting event

Accountants, solicitors, business finance providers and business coaches in the East Midlands area are being invited to join Hart Shaw’s Business Recovery & Insolvency department for an evening of fine wine tasting at Mansfield Manor Hotel on July 16th.

The aim of the evening is to develop and foster relationships between Hart Shaw and its current referrers and potential referrers that may know of businesses which require recovery & insolvency advice and/or complex tax work.

Hart Shaw, which is based in Sheffield, often works with other accountants to find the best solutions for their clients as Brendan Hall from Hart Shaw explains: “When working with other business professionals that don’t have our expertise in recovery and insolvency, our aim is always to try and turn their client’s business around and keep it trading. The wine tasting event is an opportunity for us to say thank you to existing referrers and to meet new people that we may be able to work with in future. Those attending will get the chance to meet our Insolvency Practitioners and Tax Specialists, network with other professionals from neighbouring areas and learn more about the specialist services we can offer – which can often be the difference in a referrer losing or keeping a client.”

Mansfield Manor Hotel is located in Carr Bank Park in Mansfield.

The evening starts with a 6.30pm registration and networking followed by the wine tasting session which will be hosted by specialist wine importer Emilios Polimos, owner of Emilios Greek Restaurant and a wine importer with Pegasus Wines

To book a place for the free to attend event, please contact Sarah Anyan on 07876 765592 or email sarah.anyan@hartshaw.co.uk

 

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22
Apr
14

Failure to plan hits small businesses’ profits

Small and medium-sized businesses are being advised that failure to have a business plan in place could hit their profits – a warning that is backed up by new research.

According to the study, which surveyed 453 SMEs, 70 per cent of those with a business plan in place made a profit, compared to 52 per cent without a plan.

Of those polled, a third had not put a plan in place for the year, with two thirds of these saying they did not see the need for a plan.

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw Chartered Accountants, said: “There is a saying that failing to plan is the same as planning to fail – and that is certainly true of a lot of small and medium-sized businesses today.

“While many business owners may not see the need for a plan, the fact is that those who do have a plan will see greater benefits in the long term, including increased profits.

“If your business is not where you want it to be then it may be time to review your business plan and if you have not got one in place then now is the time to take that step. Your local accountant can help you identify your business goals and then draw up a plan which can be reviewed on a regular basis as your circumstances change.”

For further information, please contact Christopher on T: 0114 251 8850 or email: chris.brown@hartshaw.co.uk.

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09
Dec
13

Increase in Insolvencies as economy improves

As the economy finally appears to be moving to a state of recovery there are still concerns for a large number of SMEs who are teetering on the edge of survival. Increased business confidence should enable these businesses to take advantage of an upturn in their markets, offering them the opportunities for the growth they have been crying out for. But for some businesses who have been struggling for the last few years it may not be that simple.

The term ‘zombie’ businesses has been circulating for some time now, referring to businesses that are managing to survive by barely servicing their debts, taking advantage of low interest rates and the patience of their creditors. Whilst there may be growth opportunities there for these businesses, poor cash flow and a lack of working capital may restrain their ability to fulfil orders as the markets improve.

Historically, the number of insolvencies has tended to increase as the economy improves, interest rates rise and creditors start to apply pressure. These ‘zombies’ are most at risk of failure and will have a knock on effect to other businesses in the supply chain if they become insolvent.

So what can you do to protect your business should one of your customers turn out to be a ‘zombie’ and fails? You can never know your customer well enough. Credit checking your customers on a regular basis can mean the difference between getting paid or being left with a bad debt. If you have carried out a credit check and set a credit limit, stick to it. We often see creditors in the liquidations we deal with who are owed many times the credit limit they had set. Review your terms and conditions to ensure that you are trading on your terms and not your customers. Consider incorporating a Retention of Title clause in your terms and conditions to give you the opportunity to recover your goods should your customer not pay. Of course, on paper this sounds simple but in practice it takes some effort to get it right, keep doing it right.

If your business is ‘zombie’ it is never too late to take professional advice to start the process of turning the business round. Of course, the sooner you take advice, the better as there will be more options available to you.  Engaging an Insolvency Practitioner or Business Recovery professional is not a negative move, as first and foremost, if there is a viable business to be saved a good Practitioner will explore every avenue to ensure the business continues to trade, looking for the best possible outcome for all involved.

For further information please contact Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw on T: 0114 251 8850 or email: chris.brown@hartshaw.co.uk.

 

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