2018 has already seen the number of UK business failures hit a four-year high. Statistics also show that the number of business failures in the UK stood at 12% – or 328,000 – last year.
Encouragingly, business births outnumbered deaths by some 85,000 over that same period, but for more SMEs to succeed and thrive, they must be encouraged to seek support sooner.
Better still, they should have ongoing partnerships with experts who can provide the often-necessary specialist and non-core skills that their business needs at every stage of its lifecycle. Indeed, it’s the savviest SME owners out there – with the most robust commercial strategies in place – who have developed a network of professional contacts with whom they’re not afraid to share the health of their businesses.
Over the last 23 years, Leonard Curtis Business Solutions Group has provided support and positive strategic advice to thousands of SMEs – with the intention of avoiding insolvency and supporting growth. The fact that it offers a multi-disciplinary approach – and assesses each case individually to develop the best solution from its extensive portfolio of services – makes its rescue and recovery offering so strong.
As a result, in the last three years LCBSG has safeguarded over 14,000 jobs, secured approval of over 150 Time to Pay (TTP) proposals – repaying more than £26 million to HMRC – and raised over £250 million in finance.
Of those companies that could not be saved, many could have avoided entering the formal insolvency process had they only held up their hands and asked for help earlier.
Daniel Booth, Director of LCBSG, said: “When we’re first approached by business owners and their advisors, nine times out of ten we have to help them overcome their psychological hurdles to early engagement. We must remember that distress doesn’t always mean disaster and we’re always quick to demonstrate that we’re not the ‘undertaker in waiting’ as is so often misconceived.
“It helps tremendously that we place much greater focus on restructuring, refinancing and turning businesses around. As a Group, we’re in a very strong position to prevent failures from happening in the first place and we’re delighted to say that clients are becoming increasingly aware of this. However, we have a lot more work to do.”
According to industry body R3, for every company that fails, a further two have been turned around. Leonard Curtis is committed to making sure its clients don’t add to the more negative of these statistics.
Daniel Booth continues: “From our experience, this sense of shame experienced by UK business owners leads to unnecessary insolvencies. Most of them are at varying levels of denial when they come to us. One of the biggest challenges is working with them to overcome the stigma associated with seeking advice when cash is in short supply.”
So despite the UK scoring third globally in an OECD ranking of the number of start-ups created, it’s this misplaced pride that prevents us from making the top ten when it comes to profitable business growth. Although Brits enjoy an enviable entrepreneurship and positivity, it seems that we don’t know what to do or where to go when we are in difficulty. Or we simply daren’t ask.
This was not the case for the Managing Director of a Yorkshire-based contracting company who was quick to recognise his company’s financial difficulties and approach LCBSG for positive strategic advice. His engagement – and the subsequent restructuring and refinancing advice that he received – not only saved the business but secured its profitable sale.
“Our accountant recommended I speak to Leonard Curtis Business Solutions Group in the wake of a sizeable loss-making project that placed the business in an extremely difficult trading position,” said the company’s Managing Director.
“LCBSG’s response was prompt, we quickly met up and I was fully guided through the process ahead of both the company and myself as the business owner. It’s fair to say I was extremely apprehensive about the meeting – I too was concerned about the perceived stigma of having to admit I was struggling and in need of help – but my worries were short-lived.
“The LCBSG team was easy to engage with, they took the time to really get to know me and the business. They also recognised that I was in a scary place but were far from judgemental. They reassured me that they saw situations like this every day – we posed nothing new to their experience and capabilities.”
“Having reviewed the numbers, LCBSG felt that it was in the business’ interests to continue trading. Our strong and seemingly positive order book meant that we were well-placed to get out of the position we found ourselves in. I honestly felt like I could trust them right from the start.
“Following the meeting, we were swiftly recommended a number of professional advisors and partner contacts from within the wider Group to help us. Reach Commercial Finance designed and implemented the necessary finance solutions to continue trading, as well as introducing us to a number of its corporate finance professionals to determine the feasibility of securing external investment or a sale.
“Over a year on and not only has the business substantially recovered, it’s also been sold to a new owner who has injected substantial capital and we continue to grow. As a result, there were no job losses, the business was saved and I can continue to work with the new owners as well as having received payment from its sale. It’s a very fortunate position that I never once imagined would be possible prior to meeting the team at LCBSG.
“Having been in this position and come out the other side, I recommend all business owners seek early advice when they find themselves in a distressed situation. The longer you leave it, the more limited solutions become. Personally, I found the experience a huge education and I learned many valuable lessons along the way. A year on and I’m still applying these lessons each day.”
From 15 offices across the UK, LCBSG’s national team of restructuring specialists, lawyers and financiers provide positive strategic advice and solutions to SME owners and their advisers – enable them to retain control of their businesses and their futures.