Practice group articles

Take action now to mitigate the 50% tax burden
25 January 2010

Making sure you have the right ingredients for a success story
2 November 2009

When a marriage breakdown splits a family business
3 September 2009

Networking proves to be a success
2 September 2009

Age Discrimination | Seldon v CWJ Court of Appeal Hearing
10 July 2009

Client article | Administration - is this the only option for a distressed business?
19 May 2009

Better communication remains the key to sustaining business success

16 October 2008



David Stanning and his colleagues at law firm B P Collins strongly believe that timely expert advice can help companies through the credit crunch.

"I can’t think about next year, I might only survive until the end of next month!"

If that sounds familiar, it’s a perfectly understandable approach. When times are tough, the temptation is to focus on the short term and not think too far ahead.

There are however, measures you can take now to help the longer term future of your business – and the best way to start is to seek advice from experts who are adept at finding solutions.

Here are a few ideas:

Be prepared – funding for growing and entrepreneurial businesses is harder to come by, but for organisations and individuals with sound ideas, there are still opportunities. Talk to your banks and funders before you need to and remember the key to success is preparation. Make sure you have a business plan and strong management team in place, know your market and get help from those who can assist you. Networking is essential, share your concerns with your professional advisers: they are the ones who will help you when times are tough and if you take the right advice at the right time, you have every chance of surviving and doing better than your competitors. Use the opportunity to refocus the business and you’ll come out leaner, meaner and stronger.

Keep the cash flowing – in richer times, the odd bad payer or disputed invoice may not be pursued, yet as cashflow becomes tighter the number of delays and disputes over unpaid bills rises dramatically. For example, did you know court proceedings can be issued to collect outstanding debts dating as far back as six years? This means long forgotten bills can suddenly raise their head at a time when you have less money to pay them. Commercial litigation experts can advise on the best way to resolve these issues in a cost effective manner.

Ask staff to be flexible – employee wages are always a primary cost for any business. If you need to cut back, first consider the options. Would staff be willing to reduce their working hours or salaries in the short term? If so, this would enable you to make savings whilst retaining their skills and ensuring they have an income. If redundancies seem inevitable, think carefully about the effect on loyalty, the immediate and future needs of your business, and the time and expense it takes to recreate a successful team later on. The loss of a vital person can make the difference between winning and losing the next customer. Employment laws are complex and the penalty for getting it wrong is high. Tribunals can make awards aggregating in excess of £72,000 in unfair dismissal cases, with a major influencing factor being the anticipated length of time it takes for the individual to find another job, so not following the rules can be a very expensive business, especially when new jobs are difficult to get.

Renegotiate your lease – landlords may be prepared to accept monthly rent payments rather than quarterly, or to offer a short term rent-free period now, in return for a longer overall contract. Alternatively, check your lease and see if you can sublet part of the space if you no longer need it all. An expert negotiator will help spot opportunities and could save you money.

Talk to your tenants – many landlords are finding that the number of defaulting tenants is increasing. Staying in touch with tenants and regularly reviewing those who may be at risk should pay dividends. Look out for telltale signs, such as late payments, bouncing cheques, and tenants who can never be contacted. Be prepared to help tenants through difficult times, but have a strategy in place to recover your property if all else fails.

The overall key to surviving the current credit crunch is communication – talk to your staff, your customers, your landlords, your bankers and above all to your advisers. Together, they might just have the solution you need. Good advice in difficult times is worth even more!

B P Collins' team of experienced corporate and commercial lawyers understand that clients expect pragmatic and commercial solutions. We are committed to building long term relationships that help our clients businesses to grow.

Please contact our corporate and commercial team on 01753 279022 or by emailing commercial@bpcollins.co.uk.