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Insolvency data rises for Q3 2005

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For entrepreneurs, forming a company is one form of expressing optimism that their business idea is something that will be supported by the market place. So it is a sobering thought to hear that a lot of businesses have been folding up this year.

According to a new report released recently, the number of companies that have closed shop rose during the third quarter of this year.

Based on the latest insolvency data released by global information solutions company Experian, it showed that business failures rose by 21 per cent compared to the same period (July to September) in 2004. The posted figure was nearly double that of the rate that was recorded in the first three months of this year.

About 4,787 businesses shut down in the third quarter, 833 more than the figures posted in the third quarter of 2004. In total, about13,599 companies have permanently closed shop in 2005.

Experian has advised business owners and entrepreneurs that a good way to minimise the risk of business failure is to do business information checks on customers (both new and existing) and suppliers so that they can reduce their exposure to bad debts that are considered to be the most frequently cited reason for business failures.

Business solutions experts agree with the advice given by Experian. According to them making the necessary checks on suppliers, customers and business prospects, will forewarn business owners if some of them are faced with cash flow problems and are on the verge of failure.

UK Businesses urged to be more mindful of language

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Businessmen and entrepreneurs face many challenges during the course of forming their businesses and running their companies. But for businessmen whose businesses involve overseas operations, a linguistic barrier must also be overcome.

The UK government has recently said that British businesses that trade overseas or has overseas operations must be able to speak the language. And surprisingly, that language is English.

The UK Trade & Investment (UKTI), the government’s support service for international traders, has realised that there is a need to address the growing language barrier between UK businesses and their overseas interests and counterparts. To address this issue it has announced an event in November that aims to help firms from the East of England improve their English language skills.

According to the UKTI, even though many businesses that trade overseas have foreign language skills, a good number of them still rely on their customers to speak English. But more often than not, these customers may speak English but not fluently. Because of this they get easily confused with business owners and managers who would naturally rely on slang terms and colloquialism in their speech that is unfamiliar to the customers.

The UKTI said that it has noticed that UK businessmen not only resort to unfamiliar expressions, they also tend to speak quickly.

The November event aims to help businesses that has international exposure and interests to assess how they communicate with their overseas customers and think of how they can improve “understanding between both parties by making a few small changes to the way they use the English language.”

The event, dubbed Speaking English to Foreigners, will be held on November 9 at the Priory Hotel in Bury St. Edmunds.

British companies are not prepared for a crisis

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A number of British companies are exposing themselves to high risk because they do not have a prepared contingency plan to deal with a crisis.

This was the finding of a report recently released by the British Standards Institute (BSI). According to the report, almost 45% of British companies are not prepared to deal with natural disasters or terrorist attacks.

It also said that about 25% of companies will not be able to handle major IT-related problems.

The BSI said that the report’s results, which was based on a survey of100 FTSE 250 firms, was considered alarming, especially in the light of such events like the London terror bombings and the onslaught of Hurricane Katrina in the US.

The Institute also said that in the wake of recent events like the workers’ strike at Gate Gourmet (a known airline caterer) – and the consequences it ultimately had at British Airways – it was still surprising to find out that 28% of British companies admitted to not being ready to cope with any supply chain problems.

According to BSI Director Mike Low, “The FTSE 250 has a market value of over £200bn, and it is alarming that such a large proportion of businesses … do not feel adequately prepared for major issues such as IT failure or supply chain problems.”

Business solutions and company formation experts are urging small businesses as well as prospective entrepreneurs and businessmen to assess their plans for their respective businesses and take appropriate measures to put contingency plans in place at the earliest possible time.

More companies are offering flexible work arrangements

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Yet another survey has come out extolling the merits of flexible working schedules for companies, most especially small businesses.

A report recently published by the Small Business Research Trust has revealed that six out of ten firms now offer flexible working arrangements with their staff. Additionally, more than half of the respondent companies also believe that the offer has had a positive effect in terms of employee relations.

Flexible working is defined, among other things, part-time working, flexitime, job sharing, telecommuting and provisions for career breaks. The survey is considered to be the largest quarterly survey involving small to medium sized enterprises in the UK.

The survey showed that of 7000 random firms questioned, 58% offers some kind of flexible working arrangement to their employees. 50% felt that by offering this arrangement, they are also improving relations between the company and the employees. Only 8% of the firms surveyed said that flexible working will have a negative effect on the business.

One interesting fact that came out is that while flexible working arrangements are offered by many employers only a few of the companies have an actual formal process that allows the said arrangement. The report said that this lack of a formal process or procedure for flexible work may only work for small companies because it also gives managers a chance to be flexible in implementation.

The growing trend for flexible work arrangement and outsourcing has also been reflected in the growing practice of outsourcing key company functions to other professionals and firms that specialize in these certain tasks – like company formation firms and business solutions companies.

Software piracy can creep into SMEs

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Software piracy is proving to be a big problem that affects the viability of almost all companies and businesses throughout the world. But based on a new study, it seems that big corporations are not the only ones who should worry about software piracy – small and medium-sized businesses are apparently at risk too.

A research study done by PC World has shown that 44% of businesses are actually are courting possible legal and security problems by not introducing firm guidelines for licensing the software that they use in their offices. In fact, most of the firms that were surveyed have admitted that they were not aware of the benefits of implementing such policies.

According to the report, a firm software license policy is very important to all businesses because it not only eliminates any possible legal risk, it also makes the office more efficient by cutting down the risk of any computer virus inspection and giving businesses the opportunity to access regular upgrades and software support.

Although the study revealed that 87% of firms believe that they are software compliant and follow the legal requirements a surprising number, around 58%, also admitted that they do not keep any kind of records for all the software that they own and use. This poses a problem especially if the software publishers request for their license certificates. This inability to show proof can result to fines, a possible prison sentence, among others.

Business solutions experts and company formation professionals both advise company start-ups to take note of this essential information in order to eliminate any kind of software license-related problems in the future.