Confidence amongst small businesses declines in July and August
There are mixed messages coming in about the state of the economy, and more specifically the state of business in the UK following the Brexit vote. It is only 3 months since the vote and it is still too early to forecast with any accuracy what will happen once article 50 is invoked. We do know that a date of end March 2017 has now been set for the process to begin. As Business Recovery Specialists we are watching the data closely.
On the one hand, some of the figures for GDP and employment have been stronger than expected, however, whilst forecasts for growth in 2017 have been slightly upgraded by several bodies. On the other hand it seems that a recent survey by the Federation of Small Businesses has suggested that the level of confidence amongst small and medium sizes businesses is now negative for the first time in four years.
This article looks in a little more detail about the FSB’s survey. As Business Recovery Specialists we also give a snapshot about what we are seeing and how we can help businesses that are struggling.
1,035 small and medium sized businesses were surveyed by the FSB between July and August 2016. They were asked how confident they felt about the prospects for their business. For the first time since 2012 the index fell into negative territory, with more businesses being pessimistic than optimistic. It was the third quarter in a row that the index had fallen. It was also the second largest fall in the index’s history.
Despite this rather gloomy result, the FSB also said there were “many positive signs” that small and medium businesses were actually proving to be more resilient than expected during the post Brexit period of uncertainty. These positive signs included: 55% of small companies were aspiring to grow over the year (the best figure since the end of 2015), whilst the number of firms expecting to “downsize, close or hand on the business fell to 11%.”
Our Take on This Survey and What we are Seeing
Oddly, the FSB’s survey is gloomy and optimistic at the same time. This fits in pretty well with what we are seeing. One thing that we are seeing in particular, however, is an increase in Business Shut Downs and a reticence amongst company directors wanting to buy businesses back out of insolvency and start again. So whilst we certainly haven’t seen the scale of problems that some commentators were predicting post the Brexit vote, we have noticed some negative effects, particularly a lack of confidence in the future.
As Business Recovery Specialists, we can help if your business is encountering difficulties
The truth, of course, is that businesses encounter difficulties all the time, during times when the overall state of the economy is positive as well as times when it isn’t. It’s all down to the specific business. Problems might be caused by number of factors, for example: a fall in orders due to increased competition; increased regulatory pressure; a fall in exports due to a strong £; a rise in the cost of imports due to a weak £; a lack of investment.
Whatever the cause of a business’s problems, they can very quickly lead to real difficulties. These include: creditor pressure, cash flow problems, HMRC Arrears and difficulties raising funding and finance to grow the business.
This is where we can help. As Business Recovery Specialists we can help businesses that are facing problems to formulate and implement a recovery plan, turn the business around and resume profitable growth and avoid the worst case scenario that is liquidation and winding up.