Latest news from the published statistics by the government reveal that quite a number of companies could close down as a result of losing large amounts of money. Basing on the latest research findings, approximately a total number of business enterprises becoming insolvent in the year 2017 was about £ 23.4 billion. As a result of this, many workers who are estimated to be 187000 in number were affected by the outcome, and may be in need of insolvency practitioners Manchester services, or elsewhere in the UK.
Nevertheless, many business companies of which are either joint ventures or personal became insolvent with most having been in existent for around 4 years and 9 years. More so, enterprises which had a turnover ranging from £1 and £ 500000 and those which recruit or contain employees between 20 to 49 were also forced to be insolvent. According to R3 which is a body of restructuring business ventures, most business that are well established and stable fall in this bracket. However, they are the most endangered and perhaps easy to shut down as a result of insolvency.
The vice president of R3, Mr Duncan swift commented further saying that the economies of scale which large established businesses and companies used to enjoy were no longer available. He added more stating that smaller enterprises were more agile than the bigger ones which means that dealing with costs that are fixed will be a difficult thing.
Mr Swift continued saying that many businesses and firms that are not yet established undergo a lot of new challenges. The main shareholders or owners in most cases find it difficult to handover responsibilities and winning the trust and honesty of the newly formed governing body.
Although the owners invest much of their resources in the business, establishing it and ensuring that it prospers especially in a new environment could be hard. New products could also not fit the needs of the new location as they might expect. For companies that tend to grow and expand at a fast rate, the processes happening outside the office in terms of sales mostly do not maintain the sales. Most of these companies have a well know product or rather a service but human resource structural system and management of credit are slow in terms of decision making and keeping pace.
Mr Duncan added more comments saying that access to new funding and source of finance is a common issue especially to companies trying to get established. He also acknowledged the fact that companies go insolvent when they are about 4 and 9 years old and included a variety of companies which could be start-up ventures or growing businesses. He attributed insolvency to the fact that money lenders could be slow in funding or those businesses which close down as a result of sudden losses exceeding their risk management capabilities.
Many businesses that entered insolvency procedures were from London compared to any other place in the year 2017. However, Yorkshire and Humberside registered the higher rates of insolvency including the Northern side although there is a government plan put in place to improve these places. According to Mr swift, these places face the highest risk of insolvency due to relatively low level of infrastructure developments and inadequate investment compared to London and the south-east region.