An estimated 3000 businesses will fail in October following the post-holiday period, according to Tenon Recovery, showing an increase of 43% on the same time last year.

The turnaround, restructuring and insolvency specialists have identified entrepreneurs allowing problems to escalate over the holiday period as the main reason for this post-summer surge in insolvencies.

Sectors most at risk are property development, retail, leisure, printing and manufacturing.

Carl Jackson, National Head of Tenon Recovery, said:

“Owners neglecting key issues combined with the difficult economic climate could send the number of business failures spiralling to unprecedented levels this autumn.

“Entrepreneurs who fail to deal with crucial business issues before they go on holiday could return to a nasty surprise.  Ignored, these issues can escalate posing a serious threat to the viability of that business.”

Tenon’s factor eight checklist addresses key issues that entrepreneurs are likely to face during the summer months and highlights actions that could be taken to minimise any threats to the business.

SME’s factor eight checklist:

1. Forecasting is vital
   Confirm that there will be no unexpected cashflow peaks that will not be covered by bank or ABL facilities during the holiday period.  Ensure that there is sufficient contingency headroom to avoid any significant problems.
2. Authorise key payments in advance
   Ensure that any key payments that will need to be made during the holiday period are authorised prior to departure to retain the goodwill of creditors.
3. Liaise with debtors to improve cashflow
   Improve cashflow by informing any large or key customers of planned holidays and negotiate early settlement of large invoices.
4. Speak to key stakeholders
   Make key stakeholders – creditors, bank managers, advisors – aware of any absence so that negotiations and decisions can be postponed.
5. Review continuity planning
   Ensure that appropriate staffing levels are in place and those in charge are empowered to run the business effectively for a protracted period in the event of unforeseen circumstances.
6. Consider recent events
   Review recent performance and business actions to assess whether a holiday (a) is realistic at the present time and will not have a negative impact on the business; (b) will not be considered inappropriate by employees, customers and suppliers in light of poor business performance
7. Check all contact details
   Provide emergency contact details to key staff; agree best times and means of communicating to keep in touch with any important issues that may need to be addressed.
8. Clear the diary
   Clear time before and after a holiday in order to address any potential problems and catch-up on business performance.

Carl Jackson added:

“The next few months may well define how long the downturn will last.  There are some 4.5 million SMEs in the UK, making up a significant proportion of the UK economy – a considerable increase in the number of small business insolvencies would be hugely detrimental and could prolong what has already been a very painful recession.

“By developing a pre-holiday checklist, we hope to impress on entrepreneurs the need to plan – a proactive approach is vital in this climate.  It could be the difference between survival and collapse.”

About Tenon Recovery
Tenon Recovery is the second largest corporate appointment taker in the UK.  Specialising in turnaround, recovery, restructuring and insolvency in both the corporate and personal sectors, Tenon Recovery is led by 43 directors supported by 350 staff operating from a network of 30 offices across the UK.  Tenon Recovery has strong relationships with secured lenders, both banks and asset-based lenders.  Tenon Debt Solutions assists over 3,000 individuals suffering from sever debt problems – see www.tenondebtsolutions.co.uk

Creditors of Silver Leaf Capital Partners LLC, the first corporate failure of a CRO Registered Limited Liability Company in Qatar since the establishment of the QFCA in 2005, have appointed Jo Rolls and Steve Parker of Tenon Recovery as joint liquidators.

Silver Leaf was incorporated as an investment vehicle and has secured an initial tranche of capital to cover set-up fees, professional and regulation fees in addition to marketing costs associated with seeking investors.

A meeting of creditors was advertised both in the UK and Qatar and, since information provided showed the majority of creditors were based in the UK, it was held in London on 7th July. All participants were offered the option of attendance in person or by phone.

Following their appointment, Jo and Steve will conduct detailed investigations into the past trading of the company.

Carl Jackson, National Head of Tenon Recovery, said:

“This appointment further demonstrates our ability to handle innovative cross border restructuring and recovery cases.  We have previously completed the first Centre of Main Interest (COMI) deal conducted in the UK.”

About Tenon Recovery
Tenon Recovery is the third largest corporate appointment taker in the UK.  Specialising in turnaround, recovery, restructuring and insolvency in both the corporate and personal sectors, Tenon Recovery is led by 43 directors supported by 350 staff operating from a network of 30 offices across the UK.  Tenon Recovery has strong relationships with secured lenders, both banks and asset-based lenders.  Tenon Debt Solutions assists over 3,000 individuals suffering from sever debt problems – see www.tenondebtsolutions.co.uk

Image: http://www.worldatlas.com/webimage/countrys/asia/qa.htm

1. No-one on the management team was in business during the last recession – a lack of experience means decisions have been reduced to a series of fire fighting, knee jerk reactions
2. Decision-making paralysis at a strategic level has set in – fear of making a wrong move or a reluctance to make tough decisions has caused the Board to take a “wait and see” approach
3. The Finance Director’s (FD) workload has gone through the roof or worse, there is no FD – a benign economy has enabled the business to function with an accounts manager, but the company lacks a safe pair of hands in an experienced FD
4. Cost-cutting has become random – the Board lacks the experience necessary to understand how best to trim costs, while safeguarding the core business operation
5. Board level disagreements – the pressure of a tough trading period has led to fundamental disagreements between Board members, making collective decisions impossible 

For managers and directors, reaching the stage where the need for an interim manager is acknowledged is tough enough. Many see it as a sign of weakness, though experience tells us that this is not the case.  Those who seek help early enough stand a greater chance of steering their business through these troubled times. But, what qualities should an interim possess and what remit can they fulfill? 

Used in a variety of roles, the interim manager is contracted to assume responsibility for a specific project, often involving significant strategic, financial or operational change in stressed or distressed situations. 

Each interim has honed their skills within a variety of companies, gaining valuable experience along the way.  By drawing on specific sector knowledge and wider business experience, the interim can then manage the client’s specific needs. 

The interim manager should always possess greater skills than the project requires, as this guarantees a proactive approach from day one.  Because of their independent status, interims do not get involved in the politics and protocols that can often ensnare staff and management.  The interim can either complement, mentor or replace current management in difficult or stressed circumstances.  At the end of the assignment, an interim should have passed to management the key skills needed to take the business forward. 

For the associate, interim management is not a stop-gap measure; it is a preferred career path.  As such, they will be focused on the assignment and committed to achieving results – this is the very nature of the interim role. 

Interims assume a senior management or board level position within a company and the fees are charged accordingly. It should be noted, however, that by employing a highly experienced executive at short notice, who offers skills not available within the company, the remuneration is far more cost effective than employing a full-time executive. 

Many companies and financial institutions use agencies to help identify a suitable interim associate. The aim of an interim management placement agency is to best match the skills of the individual interim to the needs of the client and to affect a close working relationship.  As speed is of the essence, it is important to ensure that the agency has a network of highly respected interim managers available in a matter of days. 

Vantis Interim Management & Placement Services finds suitable interim managers for companies of all sizes from plc’s, public sector bodies, SME’s and not for profit organisations. The team is entrusted by banks, trade insurers and venture capitalists to help their clients find the definitive interim. Vantis Interim Management & Placement Services is able to find interim managers for companies that may be suffering due to skills shortages, require project management, are dealing with the sudden departure of a key member of staff, a fundamental change in the structure of the company or are experiencing turnaround and restructuring issues, or simply require change management skills. 

For more information visit http://www.vantisinterim.com/ 

Vantis Interim Management & Placement Services is a trading division of Vantis Group Ltd, which is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. Vantis Group Ltd is a Vantis plc group company. 

Vantis is the AIM listed UK accounting, tax and business advisory group.