So what’s been happening in the world of business turnaround and corporate insolvency this month or so?
Insolvency Practitioners come under fire
A half hour long programme on insolvency practitioners appeared on the BBC Radio 4 ‘File on Four’ programme in Mid October. As one commentator put it, the programme was a demolition of the profession. Here’s John Tribe’s blog where he set out his own views on the balance of the programme, and generally, before listening to the programme itself on BBC iPlayer here.
The insolvency profession does make such an easy target: mistakes made by individual IPs are seen as much as an indicator of a general malaise in the profession as the actions of rogues in their midst! And no profession is immune from either of these.
Personal debt advice industry slammed!
At the end of September, the OFT announced that they had given most of the operators in the personal debt management industry a yellow card, telling them to clean up their act within just three months or else. Here’s my blog following the OFT’s announcement. If you want to see just how bad things are within the sector, read the OFT report itself. Am I alone in asking why it’s taken the OFT so long to wake up to the problem?
Understanding HM Revenue & Customs
I am sure I am not alone in scratching my head trying to understand HMRC’s stance on some cases. A few days ago there was a telling interview of Nick Lodge, director of the HMRC Debt Management and Banking Directorate in the new Insolvency Today magazine. In it he said:
- that in 2009/10, his department had £87 billion passed to him for collection, one fifth of the Revenue’s take, and they had only written off £5 billion as a result of bad debts.
- ‘We are not here to provide ongoing support for businesses that aren’t otherwise viable. This is not a bank overdraft or a loan’. ‘We don’t come at it from the point of view let’s let insolvent businesses not pay their tax because that will keep people employed’. ‘We are tax collectors’. … A deferral agreement over a short-term period, to get over temporary cash flow problems, is fine. ‘But over a long period? Sorry, no. You’re not viable if you can’t pay your bills, including your tax bills’.
He then goes on to give an idea as to what we can expect going forward: ‘We are improving fast overall at debt collection anyway, therefore businesses will increasingly see us being more active, pursuing debt more vigorously’. Your struggling clients would be wise to have ready made answers to their viability issues before they approach HMRC, especially if doing so for the second or third time, as an absence of a compelling story will lead to them being turned down.
Survey of Black Country Businesses
I think we all need to get a better feel for what things are like out there for small Black Country businesses, what they expect and what they need, so we can all support them more effectively. With self-help being the order of the day, it was for this reason that I set up the Business Resuscitation Programme. I should really appreciate it if you would complete this short survey for me. I will publish the findings in my next newsletter.
My good friend and adviser Maxine Harvey of Perseption Consulting is offering a one hour face-to-face strategy session for just £20. She is helping me on my own business strategy and such things as this newsletter – you don’t think I’m capable of this on my own do you?. I can wholeheartedly recommend her to you – Maxine is good at working with sole practitioners and small firms of professionals – and to any of your clients who are serious about dealing with this downturn and not just letting it happen to them. Visit Maxine’s website or call her on 07545 397335 to book her services.
And here’s another recommendation!: because it’s not possible to simply cut your way out of a recession, it will be only those businesses which grow their sales which will survive. Mo Harford of Momentum Training is putting on a series of seminars entitled ‘Selling in a nutshell’. I have attended Mo’s sessions before and can recommend them, such that I shall be there myself. As Mo says on her website ‘the ability to learn faster may be the only sustainable competitive advantage’.
Finally, if you are can prove you are the first to read this far by being the first to add a comment to my blog using this link, you will win either a bottle of champagne or some flowers – your choice!
Please let me have your comments, good or bad, on my newsletter. And feel free to send this newsletter on to whoever you want.
‘Doing more for Black Country businesses’
Midlands Business Recovery, Alpha House, Tipton Street, Sedgley, DY3 1HE