UK Business Failure & The Reasons Why

Business failure

      
In the UK start up businesses have a very high failure rate, with as many as 1 in 3 failing in their first three years. The reverse side of the coin is that around two thirds survive and some go on to prosper and expand. Key reasons for business failure include:

Poor Marketing

Successful modern businesses are ones that understand and meet the requirements of their customers. Detailed market planning and market research is therefore an essential for new businesses, to find out details such as the potential size of the market, the extent of competition, as well as consumer preferences and tastes.

Cash Flow Problems

Many businesses struggle through poor cash flow management. It is all very well having a good idea and a good product but it is also necessary to be able to meet short term cash outflows. Many businesses try to grow too quickly, and end up borrowing too much money externally, resulting in crippling interest repayment charges.

Poor Business Planning
Business planning should cover aspects such as marketing, finance, sales and promotional plans, as well as detailed breakdowns of costings and profit predictions. It is often said that 'failing to plan, is planning to fail'.

Lack of finance

Insufficient finance often means that businesses are unable to take opportunities that are available to them, or have to compromise - going for high cost solutions to problems, rather than lower cost ones that would yield greater competitive advantage.

Failure to embrace new technologies and new developments

In a fast changing world leading businesses are ones that make best use of advanced modern technologies in an appropriate way. Firms that operate with outdated technologies and methods frequently find themselves at a cost disadvantage over more dynamic rivals.

Poor choice of location

Location is a very important business decision. A good location is one that appeals to large numbers of customers, while at the same time minimising costs. For example in retailing it is often a mistake to choose a low cost location, that is not visible to customers. However, conversely there are considerable cost advantages to out-of-town retailers that customers are prepared to travel to visit.

Poor management

Weak and inexperienced management is one of the major causes of business failure. Managers have to work extremely hard, and to understand their customers needs, and the business that they are in if they are to be successful.

Poor human resource relations

Often a cause of failure. Successful businesses motivate their employees to work hard to help the business to succeed.

Lack of clear objectives

Successful organisations have clearly focused and communicated objectives that enable everyone in the organisation to pull in the same direction.

Consumer Credit Reports

This blog is to give you an insight into why to carry out consumer credit reports, what you can receive and how these reports benefit your company when carrying them out.

A recent study has show that 2013 has seen a marked increase in company credit checking and this is almost certainly down to the recent company failures of some of what we call the 'blue chip' companies like HMV and Comet.

However, with the new found awareness of company credit reporting there is still often a problem in obtaining good quality information for sole proprietorship and partnership businesses.

As long as you have the relevant permission and data protection licence you are able to carry out consumer credit reports on the individuals operating the businesses. The benefit of these types reports is that you can obtain current information on the owners which will assist in not only setting credit limits but also ensure that you have information so if there is a problem with payment, you have a confirmed residential address to assist in recovering your outstanding monies.

Our consumer credit reports confirm information such as:-

ü CONFIRMATION OF NAME& ADDRESS.

ü ELECTORAL ROLLCONFIRMATION.

ü INSOLVENCY SEARCH.

ü COUNTY COURT JUDGMENT &BANKRUPTCY SEARCH.

ü ADDRESS LINKS.

ü GEO-DEMOGRAPHICPROFILE.

ü CONSUMER SEARCHHISTORY.

ü CREDIT SCORE.

The main companies/industries that use this form of information are food & drink wholesalers and distributors, plumbing & building merchants, agricultural merchants and insurance brokers for their due diligence purposes. However this service is becoming widely used is assistance to credit checking the directors or shareholders of Limited Companies.

I am pleased to confirm that creditserve offer cost effective packages for all of your credit checking requirements, so please do not hesitate in contacting us direct sales@creditserve.co.uk, on twitter @creditserve or LinkedIn Martin Brown. 

Online Credit Reporting - A Simpler Solution

Having worked in the financial industry for several years I have noticed that most businesses dislike and even in some circumstances are afraid of change.

Some companies choose to remain doing business at face value or if you like based on trust, but lets be honest where there is money involved we should always try and secure our position. Now, this may be as simple as getting the correct processes in place.

Some of these processes include simply sending out application forms, some follow this up with taking up trade or bank references. These are all essential parts of the whole credit checking process, however there is often a time delay with acquiring this information and it is labour intensive. So why not add another string to your bow and strengthen your credit checking process by carrying out an easy to access online credit report.

These types of reports assist with setting credit limits and will ensure that you know all of the relevant details of who you are dealing with. A business credit report gives you details from financial accounts, director information, group structure, CCJ and derogatory information and a credit limit and risk score.

In a resent survey carried out it was shown that 98% of companies that use online credit checks state that they would never be without a business information service provider to back up their internal procedures.

If you do not currently use a credit checking facility or are just interested in what degree of information you can receive please do not hesitate in contacting me direct via www.creditserve.co.uk or email me martin@creditserve.co.uk LinkedIn Martin Brown or Twitter @creditserve

Prevention Is Better Than Cure Is Definately Relevant To Business

We all know that prevention is better than cure.

The age old definition which means that it is better to stop something bad from happening than it is to deal with it after it has happened....  And yet with this knowledge a vast proportion of UK business do not credit check their customers. A staggering 72% of UK business do not carry out the important and necessary credit checks in any way shape or form.

Now, for the successful business owners, entrepreneurs and credit managers out there that use credit reference agencies on a daily basis it would seem ghastly to not carry these checks out.

However to new businesses and potential first time users of business information it may seem daunting to obtain third party information prior to extending credit terms and entering into a business relationships but it really isn't that bad... An online credit report is a simple to use, detailed document of information which will always assist in setting credit limits. It will include financial information, statutory information, ownership and group structure, derogatory information and recommendation.

Now the beauty of this type of information is that as well as being very detailed it is a cost effective solution to any credit control operation and is proven to reduce the risk of bad debt.

Prevention is better than cure has never been more apt than in the story of one of my new customers...

A business that has operated successfully for several years wanted to use our debt recovery operation to obtain payment for the goods and services provided to 'Company A'. Our customer had never used our credit checking facility or any other to help with setting credit limits, it was done on very much a 'face value' basis.

Upon receiving the information on 'Company A' to start proceedings we carried out a simple credit check which brought to our attention that 'Company A' had CCJ's already registered against them, however this was the tip of the iceberg as looking at the owner behind 'Company A' we also found out that he was previously a director of three other companies which had been put into liquidation...

Obviously this was bad news and this debt will be hard to recover, but the moral of this story is that if our customer had used a credit checking facility in the first instance they would have seen this information and not dealt with 'Company A' and never had this bad debt costing them several hundreds of pounds... 

Prevention is better than cure!

So if you are one of the 72% of companies not currently credit checking your customers, please think about the potential consequences of not doing so. For a small annual subscription you will be able to obtain quality business information to help avoid potential bad debtors.

For more information please feel free to contact me on LinkedIn - Martin Brown, Twitter @creditserve or email on martin@creditserve.co.uk or if you are like myself and prefer to still talk to people, please call 01992 414222.

Martin Brown
Creditserve Business Information Ltd 

Fraud Conference – Banking and Payments 2013

Fraud Conference – Banking and Payments 2013

“Banking and payments industry strategies for risk management and fraud prevention.”
Grange Hotel London Bridge - Tuesday 26th and Wednesday 27th March 2013
www.fraudconference.co.uk

Fraud is a challenge which is no respecter of products or departments. It ranges across the financial services landscape and threatens organisations through their weakest links. The modern criminal learns fast, is organised and adapts his approach, uses technology to advantage, masks his attack and moves on.

This conference looks at the challenges from an holistic standpoint, breaking across the traditional business structures and connecting ideas and thought leaders from different areas to inform and stimulate our audience.

Over two days conference attendees will hear from a significant group of speakers about the latest trends, business solutions and innovations to help professional manage fraud and risk in their organisations. The Fraud conference is headline sponsored by FICO.

Organiser Paul Lucraft says, “For practitioners in the area of fraud prevention and risk this is a must attend event. The best way to get up to date and ensure that your organisation can meet the tests of today’s very demanding and dynamic fraud challenges.”

“We are delighted that FICO are sponsoring this conference as it illustrates the significance which they, a significant stakeholder in our industry, place on the sharing of ideas and recognition that cross business action is necessary to the effective management of fraud and risk by modern financial services operators.”

Speaker Expertise
The confirmed speaker list for this conference already includes:

• HSBC’s senior fraud strategy manager, Alastair Sheen
• Datamonitor, senior analyst Kieran Hines
• Mobile phones security expert, Charles Brookson
• Eminent criminologist, Professor Michael Levi
• FICO senior manager, Brian Kinch
• VISA Europe senior manager, Peter Bayley
• Skip Foss, COO of Norse Corporation
• Oxford University based economics researcher Andrew Mell who will look at the fraudster's business case
• Jeremy Benson QC of 18 Red Lion Court with legal cases update
• Craig James, CEO of NeoPay Ltd the prepaid cards experts
• Mark Cobbett of The UK Cards Association; banking risk and compliance expert Trevor Bedeman
• Michael Potts, Managing Partner of Byrne and Partners Solicitors
• Electronics and cybercrime security expert, Andrew Churchill
• Jonathan Hancock senior fraud consultant at TSYS International
• Chris Jarman, Director of Secure Electrans
• Ryan Disraeli of TeleSign speaking about account takeover risk and individual authentication
• Beverley Young of CIFAS
• Experian’s product strategy director, Jon Williams.

Registration Information
Registrations are open, with bulk discount for two or more delegates from the same organisation qualifying for a 20% discount. Fees are being held at the 2011 and 2012 price level of £1,200 for the two day conference, this includes lunches, refreshments and entry to the networking party on the evening of Tuesday 26th March.

There is also a fraud prevention workshop on Monday 25th March for those who want to brush up on their knowledge with industry expert Malcolm French. Costs for the workshop are £400 for the day with a 25% discount for those booking for the conference as well.

Booking can be arranged via our web site at: http://www.fraudconference.co.uk/registration/

Information Relating to the Disqualified Directors Register FAQs

Disqualified Directors Register FAQs

Q. What is the Disqualified Directors Register?

A. It is a register of persons who have either been disqualified through a court order or by an undertaking of the Insolvency Service from being directors of companies or members of LLPs. The register shows the length of time the director or member has been disqualified. It also shows the section of the Company Directors Disqualification Act 1986 that the director has been disqualified under.

Q. Why does Companies House maintain a Disqualified Directors Register?

A. The Secretary of State must maintain a register under section 18 of the Company Directors Disqualification Act 1986. Companies House performs this function under delegated authority for the Secretary of State.

Q. Can I obtain a copy of a disqualification order from Companies House?

A. No. The courts do not submit copies of disqualification orders to Companies House. Court officials extract information from the orders in order to complete prescribed forms, which are then used to notify Companies House of a person’s disqualification. Likewise, the Insolvency Service provides Companies House with information where a disqualification undertaking has been made. It is these particulars, received from the court or the Insolvency Service, that make up the Disqualified Directors Register.

Q. How do I access the Disqualified Directors Register?

A. The register can be accessed through the following link: Disqualified Directors Register

Q .How much does it cost to search the Disqualified Directors Register?

A. It is free of charge.

Q. I’ve checked the Disqualified Directors Register and the person I am interested in is not on the register – what does this mean?

A. This could mean one of the following three things:

the person is not and has not been disqualified;
the person was disqualified in the past but the disqualification order has since lapsed (it is a legal requirement of the Company Directors Disqualification Act 1986 that details of lapsed disqualification orders are deleted from the register);
the person is disqualified but we have not yet received official notification from the courts or the Insolvency Service.
Q. Is someone who has been disqualified allowed to act as a secretary?

A. Yes. This legislation only prevents disqualified persons from acting as company directors or LLP members. This does not apply to secretaries providing they are not involved in the promotion, formation or management of a company.

Q. Does the legislation apply to bankrupts?

A. Yes. If you have been made bankrupt and your bankruptcy is still in force, you cannot act as a director of a company or member of an LLP. However, the bankruptcy register is held by the Insolvency Service and can be accessed via www.insolvency.gov.uk

Scottish bankruptcies do not appear on the Insolvency Service website. They can be found on the Accountancy In Bankruptcy website which can be accessed via www.aib.gov.uk

Northern Ireland bankruptcies can be accessed via www.courtsni.gov.uk

Q. Under what circumstances are directors disqualified?

A. Examples of the most commonly reported conduct for disqualification are:

continuing the company's trading when the company was insolvent;
failing to keep proper accounting records;
failing to prepare and file accounts or make returns to Companies House;
failing to send in returns or pay to the Crown any tax that is due, and
being involved in fraudulent activity
For more detailed information on when a disqualification can occur, please visit the England, Wales or Scotland Insolvency service website or the Northern Ireland Insolvency service website.

Q. Your Register of Disqualified Directors refers to 'Exemptions'. What does this mean?

A. Under the legislation a disqualified person can apply to the Court for permission to act as a director of specified companies. If the application is successful these companies will appear on the register under “Exemptions’.

Q. Where can I obtain further information?

A. For more detailed information, please visit the England, Wales or Scotland Insolvency service website or the Northern Ireland Insolvency service website.

Prevention Rather Than Cure! Obtaining Business Credit Reports

The Basics Of A Business Credit Report

Carrying out a business credit report on potential partners is an important first step in running and growing your business efficiently. The latest trend is to analyse company reports and business credit checks to gain a better understanding of how a target business prioritises their finances and manages financial issues. Let’s focus on these two key criteria of solvency and credibility.

Understanding business credit reports
Ordering a company report is the right way to verify that a business you are planning to work with doesn’t have issues that could be detrimental to your business. It contains accurate, objective and updated information on a target business that helps you stay on top of credit risk management.

You will find information on the company’s debts, derogatory information and business group structure. The report will also provide banking, insurance and leasing information, corporate registration details and other corporate financial data.

By running a business credit report on an unknown firm, you will also get access to statutory and directory information including the date of its incorporation, the number of employees, the type of accounts, shareholders, the date of appointment and resignation of all directors, their addresses and birth dates, to list just a few.

All this data is collected by credit reference agencies from three major sources. Credit obligation information is provided by suppliers and moneylenders, legal filings are available from local, county and state courts and business background data come from independent sources such as state filing offices, public records, credit card companies and marketing data banks. If you choose to make a business credit report on a prospective partner, you can easily buy a copy of their company report from one of the UK’s leading credit report agencies over the Internet and access an ample database of document images that you can download and print out.

Getting a grip on business credit scores
A score gives a quick overview of risk potential based on where the score falls on the scale. The higher the credit score is the lower risk a new partner will pose for your business. Usually it is calculated by a statistically derived algorithm and based on three key factors such as credit, public records and demographic information.

If you run a regular business credit report, you may notice that their score fluctuate slightly. Those three major factors change with time and cause credit scores to shift. An increased trend in slow payment obligations might improve someone’s business score by a few points, while a few more court judgements on their business profile are likely to make their score look less promising.

Going into partnership with an unknown company requires a detailed analysis of every step.

Company credit reports and scores have become an integral part of any business credit report. They provide an objective, accurate and up-to-date view of how solvent and financially stable your potential partner is.

Experts believe company credit research should be carried out even in a low-risk situation to avoid unnecessary risks. Prevention is known as the best policy, especially when money is at stake.

If you would like more information relating to our services please feel free to email martin@creditserve.co.uk follow us on twitter @creditserve or connect on LinkedIn Martin Brown [LION]

Reviewing Credit Reporting Packages : Product vs Price

We all get fed up with receiving telephone calls from incessant telesales people and we all convince ourselves that we cannot afford the time to review the systems which we have in place... The truth is can we afford NOT to review these systems and services.  

This blog is to show the potential benefits of allowing potential suppliers tender for contracts, I mean lets be honest councils now have to put all of their contracts out to tender so why would companies not operate in the same manner.

Q1. Why would I look at another supplier of business information when I'm happy with what I'm doing at the moment?

A. The simple answer is that there are so many new products which can assist you in credit checking and depending on who you use and what they offer, you may be missing out on these services.

Q2. I don't have time to have meetings with potential suppliers, so why would I potentially spend hours in meetings?

A. With many on-line providers you can take advantage of on-line demonstrations or even trial periods so that you can compare in your own time what the benefits are of a potential new supplier. On-line demonstrations can vary in length from 5 minutes to 15 minutes depending the degree of package you may require.

Q3. The information that the credit reference agencies provide is very similar, so why change?

A. This is generally quite true, all providers of business information will give you accurate information as they gather the information from the same places, Companies House and the Registry Trust amongst other sources. However the information is formatted in differing ways and sometimes agencies provide more in depth options to take advantage of.

Q4. My current provider doesn't increase my subscription and I'm happy with what I'm paying at the moment...

A. The bottom line in business is MONEY and that there is always a deal to be had! So when you get the chance to trial another providers information, take it! You may get more information or services which suits your requirements, potentially in a better format and often credit reference agencies offer guaranteed reductions in subscriptions to secure annual contracts.

So my advice would be to always make sure that your information is as current and detailed as it can possibly be, product quality is paramount! Price is important but not always what good decisions are built on.

Shop around, take 5 - 10 minutes to view a demonstration and make an informed decision, having the right systems in place is key.

If you have any questions regarding the services which Creditserve provide then please contact me on 01992 414222 or email martin@creditserve.co.uk. You can also follow me on twitter @creditserve or connect on LinkedIn Martin Brown.