An insolvency advice company is predicting a ‘potential epidemic’ of business collapses as an increasing number of restaurants seek financial and recovery advice.
Tenon Recovery said they have seen calls for assistance from the restaurant industry among others, rise by up to 200 per cent on the same period last year, and are ‘concerned’ that profit margins are being slashed too much to entice consumer spending.
Carl Jackson, head of Tenon Recovery, said the state of the industry now is just a taste of the insolvency epidemic to hit the UK next year.
“It is quite usual for some non seasonal businesses to turn off the lights in the run up to Christmas as they know they will not be able to survive in the New Year but we have never seen such a broad spread of businesses fail so early.”
Tenon has attributed the increasing number of collapses to businesses’ limited experience of operating in a downturn, with the last recession having taken place in the 1990s.
“A continuing increase in the number of small business insolvencies would have a significant impact on the UK economy and it is very important to make sure that this does not happen,” Jackson continued.
Tenon has strongly recommended that businesses seek professional advice before their financial problems get too out of control.
“We hope to impress on small businesses the need to plan. Survival depends on many factors but among the most critical is the willingness to take advice early and from quality advisers."
Tenon have devised a 22-point checklist, available on their website, for businesses to check whether they are able to weather the financial storm, or should seek immediate help.