On the edge

I received an email today from a financier friend of mine, whose ear is very close to the ground – particularly in the world of distressed business & corporate recovery…

Word on the street is that a wall of debt is due to collapse and an avalanche of activity in the insolvency sector is upon us.  Corporate finance is seemingly impossible at the moment from any source, distress funders are up to their eyes in deals, banks aren’t suporting and HMRCE is starting to tighten previously generous ‘Time to Pay’ settlements.

Meanwhile over in the Enterprise Sector support for start ups has been withdrawn in favour of the ‘growth’ businesses capable of creating jobs in the future.  Meantime, public sector cuts throw more people on to the unemployment pile.

Unions bay for blood, strikes abound and everywhere people are looking for someone to blame.

Much as I am a supporter of the Conservative Party I can’t help but feel that this aggressive approach is a form of political points scoring.  The old corporate trick of blaming all the problems on your ‘inept predecessor’ – so the spotlight is off you, while you buy valuable breathing space trying to figure out how to get the job done.

In the meantime 30 ‘leading businessmen’ have been choraled to support what the Government is doing.  (All it seems highly paid employees of publically listed plcs)

I fear deeply for what is going on.

My own experience is that the majority of small businesses are now living ‘on the edge’.  Payments have slowed, sales are falling and everyone is holding on to what little money they have got.  Thousands of small businesses are literally treading a daily tightrope.

We have to support these businesses.

Not an artifical crutch to support failing businesses, but rather the encouragement to keep going on.

You see, the future of the economy is not in providing the security of ’employment’.  It’s about empowering as many people as possible to step out of the ‘blame’ culture and start taking control of their own lives.

If we don’t encourage this enterprise culture, and we starve support to only the ‘growth’ businesses (and how on earth can you tell which ones those are?), we will end up with the masses baying for blood and someone to blame.

Unless we’re careful I predict that a Revolution is coming…

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8 thoughts on “On the edge

  1. I couldn’t agree more Rachel. I am also a supporter of the conservative party- but I feel like their support of SMEs is some what lacking.

    What do you think will have to house prices within the next 5 yrs? How much do you think they will fall?

    Matthew.

  2. Heh welcome to the new economy where money is the right price and poor performing businesses and economies that have become complacent go to the wall. We have collectively lived beyond our means for too long and now we have to pay the price.

    I do agree that ideology is getting in the way of sense at times but we need to get used to higher taxes, fewer social services and restricted access to capital.

    We’re credit junkies and its time to go cold turkey.

  3. It seems to me that people are forgetting the basic rules of life. Some people call it Kismet but I know it as ‘what comes around goes around’ and it basically applies to us all.
    If people stopped grabbing for themselves when times get tight and focused their efforts on helping others (which may go against their natural instincts) i know from expeience that thieir businesses and lives will improve.
    You reap what you sow in this life and it’s amazing what good fortune comes your way when you stop looking inward and spread more outwards, especially when times are hard.

  4. Dear Rachel,

    It appears that nobody is looking at plans for growth.

    They do not know how to “design for growth”.

    They have spent too long “designing to maintain the status quo”.

    They have lost the knack and unless they get it back we are going to be in all sorts of trouble.

    What you find is that when decision makers are placed in a system that just doesn’t work anymore they are highly unlikely to be able to think any other way but tactically. In the past they have been able to fight their way out of the paper bag. Now we need to think growth, innovation and design. The time for more of the same is running out.

    Regards
    Stephen

  5. The whole scenario is a multitude of factors. First and foremost greed, this greed turned into war (Middle East Conflict), this has cost, not only our Government Billions of ££££££££’s, but many others, in particular USA. And as we all know, from previous wars, there has always been a ‘depression’ after such calamities.
    This of course joined together with our previous Government, who gave jobs to all, has had a detrimental effect on the amount our Government has had to spend.

    We now see our new Government ‘clawing’ back what was given away by it’s predecessor. By cutting public spending, inclusive of jobs in the Civil Service and public sector, this will only aid to the severity of the financial state of this country. Unemployment does not help our society at this, or at any other time, in actual fact it may well cause more of a financial problem, as, it will cost more to the Government to keep those unemployed and inevitably homeless people, in food and shelter.
    Now is the time to help SME’s to the utmost, ensuring that as they grow, they will themselves employ others, thus relieving the burden on the Government in all state benefits, inclusive of housing.
    SME’s are our future, as it is no doubt our young-middle aged generation who in fact start business’s, especially in today’s climate, and the prospect of massive jobs cuts kn the aforementioned sectors.
    If we do not act now to help and save the Uk’s SME’s, then the inevitable will happen, mass riots, and if you don’t believe me, just remember not that long ago GREECE, and to be more recent, FRANCE, and just to add to the whole equation, this is exactly what AL Qeada have been looking to do, destabilise Europe and the USA, we, amongst others, have played right into their hands.

  6. I’m sure we all look forward to teaching the silver spoon brigade how to learn about loss. For it is only in them understanding loss that they will be able to produce honest and fair policies.

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