Newsletter Home

November 2020

November Bulletin Predictions From Front Line Experts

Directors Circle has one of the largest communication channels that provides consultancy and insolvency services to businesses with a turnover of up to ten million pounds, through companies within its group. It is a unique position to gauge the financial state of this businesses sector. So, what is the state of the economy as we move towards Christmas 2020?

Basically we have a zombie economy. It looks alive but it’s really a corpse. Business owners are exhausted, confused, angry and desperately short of money. The whole sector is supported through generous Government support systems which have now virtually bankrupted the country. Insolvencies are on hold in a never-seen-before national intervention. The dam is full and it is about to break.

Based on continuous marketing results Directors Circle forecasts that there will be a colossal collapse of companies in the SME market starting in February 2021.

Just under a year from the realisation of the economic dangers of Covid-19. HMRC will refrain from issuing winding up petitions until at least Summer 2021 and Court Enforcement Officers will be under heavy restrictions to limit the enforcement of judgements. Continuity of business will prioritise justice to keep total economy collapse at bay. This is the price of not realising that the cure would be worse than the disease.

The good news is that British business people always dust themselves off and start again. But it will take time. Time that many people don’t have.

 

Sink or Swim

by Rose Burton

You have a choice. If financial resources are exhausted and your business debts have piled up with a significant percentage of money owed to HMRC, then you could give up or you could fight to keep your business.

Financial prospects will get better, even if we all have to wait until Summer 2021. But consider what position will your company be in if you could hold on that long. If it is saddled with debt, then there will be little money available to reinvest back into your business.

Competitors with funding will dominate. To win next year your company needs to be lean and mean. An aggressive approach is needed. Look at branded companies that are on the High Street. What have they done?

New Look, Regis, Carpetright, Mothercare, Homebase, Biron Burger, Travelodge, Carluccios, Gourmet Burger Kitchen, Jamies’s Kitchen, Prezzo, and Chimichanga to name but a few companies that have secured their future with a Company Voluntary Arrangement (CVA).

Companies within the Directors Circle group assist businesses with the preparation of CVAs. During the Covid-19 crisis we were one of the first in the industry to include £50,000 Bounce back loans and £500,000 CBIL debts in CVAs, which were accepted.

It is important to take action now before HMRC does. Many Directors are delaying taking action in the knowledge that HMRC are withholding winding up petitions. However, Lockdown is giving you the opportunity to take advantage now whilst HMRC has the time to deal with your case.

Take action now before it is too late!