The UK Equine industry is worth £4 billion a year. It employs 270,000 people full-time

Voluntary liquidations soar as directors try to cut costs

Foreign workers are valuable to UK economy, says BCC

Work and Pensions Secretary, Iain Duncan Smith, Below, made a speech in Spain urging UK businesses to employ British workers rather than recruiting people from abroad

Commenting, David Frost,
Director General of the British Chambers of Commerce (BCC), said:"Businesses in this country need to have a highly skilled workforce and for many firms that means employing migrants. Employers need staff who can read, write and communicate properly, and our young people often lack these basic skills needed for the workplace.

"Getting more young people into work in this country doesn't rely upon stemming the flow of skilled migrants coming to the UK. It's about more than just additional training to get people into work. We need to provide our young people with the right skills at school in the first place, and overhaul our welfare system so it incentivises people to move into employment.

"The government is already acting to reduce the numbers of unskilled migrants coming to this country. But highly skilled foreign workers are important to our economy, and it is vital that they are allowed to enter the country so businesses can hire the workers they need."

 

The number of companies being voluntarily closed down to save costs has risen 9.5 per cent during 2010, according to a commercial law firm

Data obtained by McGrigors shows that the number of members' voluntary liquidations (MVLs) rose to 3,578 in 2010, an increase from 3,268 the previous year as businesses continued to cut costs.

The figures, sourced from Companies House, show that businesses are increasingly looking to streamline their complex corporate structures, McGrigors said.

It added that many companies will have gradually acquired complex corporate structures over time - through takeovers and organic growth - which are now inefficient.

Paul Sutton, corporate partner at McGrigors, says: "Closing a redundant corporate entity can save up to £20,000 in administrative costs every year."

"Businesses are increasingly looking to review their corporate structures and actively reduce administrative costs so they are in better shape going forward."

While historic tax planning may have prompted some businesses to implement complicated legal structures, Sutton added that tax benefits may no longer justify the ongoing costs of maintaining those complex structures.

He said: "Companies will also be keen to help directors comply with their legal obligations by merging subsidiaries and reducing the number of director roles that they have.

"Changes in business plans during the recession may have left some subsidiaries as simple legacies. Company directors will now be keen to ensure that their businesses are as streamlined as possible as they embark on the next phase of growth."

McGrigors also highlighted figures that show the overall number of company liquidations fell by 16 per cent during the past year.

Sutton said: "The rise in the voluntary closure of subsidiaries may not sound like a big increase - but in the context of a large drop in overall liquidations, this is an extremely significant rise."

"The cost savings of closing subsidiaries can be immense. When you consider that companies often have hundreds of global subsidiaries, it can add up to a significant saving."

Keeping a firm within the family is getting more and more difficult

For most family business owners keeping the firm in the family is key


Yet the prolonged recession has meant that for many entrepreneurs selling to outside investors is either the only option or the most profitable option.


Recently it was reported that a family-owned and run plumbing business PH Jones, in Cheshire, which provides services for social housing, was sold to British Gas for £30 million. However, the sons of the owner are to continue running their smart metering business, which was not bought by the energy giant.


Jeremy Rayment, left, is director of London-based accountancy firm Menzies, which advises firms on a range of issues, including when, how and who to sell to. He says he has seen an increase in the number of family business owners choosing to sell the business on rather than keeping it in the family - many for economic reasons, but for others due to a lack of family interest elsewhere.


He says: 'There is so much choice and opportunity elsewhere these days that it is not a given that sons and daughters will follow their parents into the family business. Also globalisation, and the pace of change generally, means the business may need more capital on an ongoing basis than family members are able to find.'


Menzies typically advises owners of firms with a turnover of between £2 million and £30 million about whether or not to sell the business and how to raise finance. A key challenge for SMEs is increasingly how they operate internationally, says Rayment.


'Companies may still be very small but operating in overseas markets often means they need the skills traditionally associated with much larger firms. For many this may mean buying in expertise, whether on a short-term contract or otherwise, or selling on the firm.'


According to Menzies, wherever possible they 'encourage succession'. But for family business owners who are facing the prospect of an outside sale, there are ways to protect existing staff.


Carrying out due diligence on any prospective acquirer can help you to understand their motives, as can speaking to other businesses they have bought. This can give you a clearer idea of their future intentions towards the company.


The good news is that investors are typically quick to see the benefits of investing in family-run firms.


Rayment adds: 'Investors tend to like the fact that family businesses are well-run and close and that those in the business know what is actually going on. Typically what attracts investors is the potential to drive and develop the business, they are more likely to be looking for firms with a great future story, than to asset strip the business.'


For more information go to the Institute for Family Business: www.ifb.org.uk

 

Late payments still hurting small firms

Small firms report late payment is still an issue but it's the private sector that's the worst offender

Almost three quarters (73%) of businesses have been paid late in the last 12 months, according to a new paper by the Federation of Small Businesses (FSB) and for the majority (77%), it is by other businesses.

Small firms do not have the same cash-flow buffers as larger businesses and so being paid late causes a vicious circle, meaning that 38 per cent of members that are paid late say they then pay their suppliers late.

The survey showed that 43 per cent of members are currently waiting for between £1 and £4,999. And in the past 12 months, 56 per cent of members have written-off invoices worth between £1 and £9,999 because of non-payment and six per cent of members in the construction sector have written off £35,000 or more.

The Government's commitment to pay all invoices to small firms within 10 days has improved payment times. However, the latest 'Voice of Small Business' panel survey has shown that 18 per cent of respondents are still being paid late by the public sector.

The FSB is calling on the Government to ensure that all public agencies follow the lead of central Government and pay all invoices to small firms within 10 days; that all contractors that the public sector uses pay their sub-contractors within the same time; and that all private sector companies used by the public sector sign up to the Prompt Payment Code.

With 53 per cent of small business owners saying that they spend between one and six hours per week chasing late payments, firms can take control by:

Making sure there is a contract in place which confirms payment times and then penalties if payment is late - such as interest charges

Offering a discount for prompt payment, dependent on the relationship with the purchaser

Asking for payment up-front, or a deposit before work begins

Talking to the purchaser before shipment to make sure that all sides know payment terms

John Walker, National Chairman, Federation of Small Businesses, said:

"There are always going to be companies that pay late, but there are steps that businesses can put in place to make sure that they don't fall foul of the issue.  We are pleased that the Government has stepped-up to the Prompt Payment Code - but there is more work to be done.

“In the current economic climate, every penny counts and for small businesses a late invoice can mean not being able to pay their staff. We need to see all businesses ensuring that they make payments on time if the private sector is to get on with the job in hand of strengthening the recovery."

The number of new laws introduced in the UK in the last year (to December 31 2010) has leapt by 41% to 3,506 up from 2,492 in the previous year reveals research by Sweet & Maxwell, the leading legal information provider.

Sweet & Maxwell, a Thomson Reuters company, says that this works out as almost 14 new laws (13.8) being passed every working day in 2010 and is the highest number of laws introduced in any year. For example during Margaret Thatcher's period as Prime Minister an average of just 1,724 laws per year were passed.

A last minute push from the Labour Government to pass through planned legislative changes in the run up to the general election on May 6th could explain the sudden increase.

Data from Westlaw UK, Sweet & Maxwell's market leading online legal information service, shows that 51% of the new laws (1788) were introduced in the first four months of 2010 (to April 30th).


Major legal changes introduced in 2010 included:

  1. Digital Economy Act 2010 - which obliges ISPs to disconnect persistent illegal file sharers

  2. Equality Act 2010 - which made employers liable if an employee suffers harassment from a customer or client and limits employers from asking candidates pre-employment health questions

  3. New power for the Information Commission, including the ability to fine businesses and sole traders up to £500,000 for serious breaches of the Data Protection Act

  4. The power for HMRC to publish the names and addresses of tax evaders in a "name and shame" policy

  5. Making it compulsory for VAT registered businesses with a turnover of £100,000 or more have to file tax returns and make payments to HMRC online rather than by post


As part of their pre-election pledge, the Conservatives had announced that they would introduce less new laws and actively cut the legislative burden for businesses.

Commentators have questioned over how easy it will be for the Coalition to implement their comprehensive reform agenda without having to increase substantial amounts of new legislation.

Business lobby groups in particular will be keeping a close eye on how closely the Government sticks to its promise.

According to Sweet & Maxwell, one of the ways that a new law can be introduced without being subject to full Parliamentary debate is to pass legislation as a "statutory instrument". Analysis from Westlaw UK shows that in 2010, 98% of new laws were introduced as statutory instruments.

Record number of laws introduced

51% introduced in the run up to the General Election in May 2010. Almost 14 new laws introduced per working day in 2010

News from July and August 2011

Government doesn't understand small rural businesses - Livery yard owner


Harry Teacher, above, says many small rural businesses don't have the resources or time to negotiate the planning process

Bank Farm livery yard near Tonbridge currently has an indoor riding school and stabling for 29 horses.

Due to increasing demand, the owner Harry Teacher was keen to expand his rural business.

But he says after spending months on his planning application and more than £5,000 in costs he was thwarted by red tape and permission was refused.

The government's draft planning policy, which was announced by the Planning Minister and MP for Tunbridge Wells Greg Clark, and has just been published, promises to be less cumbersome and give local people greater control.


Reducing red tape

Greg Clark says the new framework will be:

  1. localist in its approach, handing power back to local communities to decide what is right for them

  2. user-friendly and accessible, providing clear policies on making robust local and neighbourhood plans and development management decisions

But the Country Land and Business Association, the organisation which represents landowners and rural businesses, says the draft policy is too cautious and doesn't address the lack of rural housing or sustainable jobs.

Jonathan Roberts from the CLA says: "Planning plays a huge role in encouraging sustainable economic development in the South East, and this means national planning policy must encourage a broader, sustainable rural economy that goes further than just leisure and tourism."

And he says the problems faced by the stable's owner are far from unique in the South East.

Harry Teacher remains optimistic and says he will try again to get permission to expand his stables - but he's aware many other small rural businesses simply won't have the resources or time to negotiate the often complicated planning process.

Welcome signs that interest rates will be kept on hold for some time


Commenting on the Monetary Policy Committee (MPC) minutes, which have just been published, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

"Following the change in the composition of the MPC, the minutes confirm that there was a welcome shift in the balance of opinion. Only two members, rather than three, voted for an immediate increase in interest rates. We have argued for some time that it would be premature and potentially dangerous to raise interest rates when the government is implementing its deficit cutting programme. Although annual inflation remains at 4.5% and is likely to approach 5% in the next few months, the committee is right to assume that inflation will fall steadily during 2012.

"With wage pressures remaining modest and with businesses and consumers facing acute pressures, it is right to wait before raising rates. At present, only one member of the committee has voted for increasing the QE programme beyond £200bn. But if the economy shows signs of weakness in the next few quarters, it would be right to consider this option more seriously to avoid a setback."

10 tips for getting the best energy deal for your business

Small businesses often don't notice how much money their gas and electricity bills are draining away unnecessarily

In fact, while four in ten small businesses (39%) say that cutting costs is their prime objective for achieving business growth, just a third (33%) proactively check the market before signing their next energy contract, and three in ten (30%) simply allow their existing energy contract to roll-over. As a result, many businesses end up paying over the odds when a simple switch could save them on average £1,500 pounds a year.

James Constant, Director of uSwitchforBusiness.com says: "There are many small businesses struggling to make ends meet in the current environment and ensuring that they are on the right energy deal could make a real difference. It is important that businesses understand energy contracts and what, when and how they need to act in order to prevent continual rollover onto uncompetitive terms. By taking the confusion out of the market we hope to encourage many more businesses to actively take control and shop around for the best deal."

Here are ten tips to help you make sure you get the right business energy contract:

1. Check your contract end date You'll find your contract end date on your initial correspondence from the energy company, but not on your bills. Put the end date in your calendar to give yourself plenty of time to find a good deal when it's time to switch.

2. Got a renewal letter? It's time to shop around
Before your contract ends, you'll get a renewal letter from your supplier. If you don't act on your renewal letter, you'll automatically be tied into a new contract, which may not be the best deal for you. So make sure it's your trigger to get a quote and compare prices - you could save hundreds of pounds by making the switch, so it's worth spending some time on.

3. Moving premises means moving suppliers
If you're moving into new premises, it's the perfect chance to get the best energy deal you can find. Make sure you don't get hassled into signing up with any particular service, nor should there be any need to take on the existing supplier for your new premises - use an independent service to track down the right deal.

4. Get your termination notice in on time
Don't run the risk of getting tied into a new contract automatically - make sure you check the notice period (it's usually between 28 and 120 days) and submit your termination notice on time. Be careful not to send your termination notice too early, as it may not get processed. Send your notice by email (or fax) as well as a recorded delivery letter, so that you have proof that it was received.

5. Be careful who you choose, or choose to stick with
Once you're signed up for a contract it's difficult to get out unless you move property or buy yourself out - there's no cooling-off period - so it's important to choose a deal you're happy to stick with.

6. Thinking of going green?
It pays to do research when it comes to going green. Go to our dedicated green business energy section to compare the fuel mix of various suppliers and make a green choice without any added cost.

7. Sign up for a smart meter
How much do you know about when and where your business uses the most energy? A smart meter can help you monitor your energy usage accurately, work out exactly what you're spending and when, so that you can learn to use your energy more efficiently and cut your business costs.

8. Small suppliers are safe
If you find a good deal with a small energy company- go for it! Don't worry about the size of the company. Many of the smaller companies have been around for five years or more. If a small supplier goes out of business you'll still get your supply and you'll be looked after by an industry regulator, so you won't lose out.

9. Get a quote before your contract ends
To be safe, get a quote up to 120 days before your contract end date. There's no obligation to sign up for a contract when you get a quote but once you've found a supplier with advantageous rates, you can secure them and they will be held for you and your contract with the new supplier will take effect after your current contract ends.

10. Take action or lose out on hundreds of pounds
Over a third of small businesses don't make the move to find a cheaper supplier when their contract runs out. Don't miss the opportunity! Shopping around is easy.

Women’s Horse Industry Network Opens UK Branch


The Women’s Horse Industry Network is now open to women working in the equine industry in the United Kingdom.

The Women’s Horse Industry Network is a membership based business networking group with over 750 members worldwide.  Members are located in the United States, Canada, Australia, the United Kingdom and New Zealand and offer every equine product or service available.

“If you can’t find what you want in our membership, more than likely, it doesn’t exist,” states Debby Lening, VP of WHIN Global.

“We have had a lot of requests to open a chapter in the United Kingdom and we feel that now is the time to do it. We have some members already and they want to start meeting one another and having more opportunities to do business with one another. We are hoping that by opening this branch, it will make doing these things a lot easier,” states WHIN’s Global Director, Catherine Masters.

Michelle Girling of Tuffa International Footwear is the acting branch director. She can be reached at michelleg@tuffaboots.com.

To find out more about the UK Women’s Horse Industry Network, please visit www.ukwomenshorseindustry.com.

 

News from July and August 2011