Clarion are hosting a series of seminars that deal with the challenging circumstances that businesses find themselves in now. As I am due to open the seminars I thought I would do a little bit of research to find out exactly how serious the current problems are.
On the 23 January 2009 the official figures are set to confirm that the UK is in recession with six months of negative growth. It is the first time the UK economy has entered into recession for 16 years.
Unemployment is expected to rise by a total of 1.5 million to around 3 million on 9% of the population by the end of 2010.
More than 17,000.00 were declared bankrupt in the third quarter of last year ? that is around 175 people a day. The Ministry of Justice reports that the number of companies facing winding up petitions rose 13% year on year to 3,184.00 in the third quarter. Both these figures are estimated to rise substantially in 2009.
It is believed that house prices may fall by as much as 25%. The number of mortgages approved by Britain?s biggest banks fell last month to the lowest levels since records began 11 years ago. The banks are still reluctant to lend to one another. This is reducing the ability for businesses to trade out of difficulties or to be saved through acquisition or turnaround.
Landlords are struggling to find tenants for their premises and are entering into deals whereby they accept limited amounts of rent. Retailers are closing left, right and centre. Even the volume of sales at food stores has dropped. These are undoubtedly challenging times for all of us.
Whilst they are challenging times the last thing that anyone should do is panic. It is time for everyone to stay calm, keep a clear mind and remain focused.
Firstly every business should so far as it is possible review itself objectively and make the right economies, not panic ones or ones that will damage its business in the future. It is vital that every business dares to be confident in its own strengths and its own position in the market place. Those businesses that make the right decisions and maintain their business effectively will emerge in a better position to take advantage of the improving market conditions. Making the right decisions and the right economies is actually a key way of growing the business for the future.
At the same time it is essential to take stock and put in place the necessary precautions against the risks that are ever more present. There is a greater risk of contractual disputes, businesses trying to avoid liabilities, creditors pursuing their claims more aggressively and debtors becoming insolvent. Businesses will need to review their risk management and reporting systems. They will need to ensure that they are in a position to pursue legal remedies. Most importantly however they need to be in a position to respond quickly.
Lastly and significantly businesses should be in a position take opportunities when they arise. There will be a series of new opportunities in this changing market place. There will also be the opportunity for those that are prepared to make quick and bold decisions, to make acquisitions in the distressed market place - in particular those who have their own funding or collateral. This is a difficult time and the rules of engagement have changed completely but rules still exist in taking the right steps now is more important than ever.
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