Did you know that a business can be wound up “in the public interest” ?

You learn something every day…

“The process by which a company is wound up in the public interest rather than because it is insolvent.

A petition for a company to be wound up in the public interest may be presented by the Secretary of State if he considers that it would be expedient in the public interest for the company to be wound up. The applicable test for the court is whether it would be just and equitable to wind up the company. Such an order results in a compulsory winding up and is usually made on the basis that the company is being run in an unsuitable or objectionable manner.”

Im sure that many readers were aware of this and perhaps its logical where the enterprise is clearly a criminal enterprise but the this has been enacted in areas where there the business’s trading has clearly been surrounded by a whiff of fraud

This is a particular example in the ever murky world of diamond trading.

“iGL, a company based near Hatton Garden in London, provided certificates to Diffraction, a company based at Jumeirah Lake Towers in Dubai, United Arab Emirates, that was at the centre of a scheme to sell fancy coloured diamonds to investors, via numerous broker companies based in the United Kingdom

Diffraction provided an online trading platform to numerous UK-based broker companies who sold the diamonds to members of the public at mark ups so high that investors were unlikely to obtain any return on their investment . The company also offered and controlled the storage of investor’s diamonds in a storage fault in Dubai”.

It could be argued that this was a case of caveat emptor and “investors” daft enough to dabble in this particular market expecting instant high returns deserve what they get (readers of this blog will of course be aware of a previous recent example) but HMG has taken a differing view and in truth, there can be few complaints

Do HMRC and the Government care about the self employed?

When initially considering self employment I was greatly inspired by the Businesslike events proposed and sponsored by Gordon Browns administration. I often believe if it wasn’t for a couple of excellent presentations, I might not have taken the course I did . I certainly have no regrets. Far from it

Businesslink had its faults for sure but the intent was clear. Labour under Brown and Blair, sent a clear message that they supported small enterprises

Setting up a business is daunting and perhaps the least enjoyable aspect is managing tax. After years of PAYE, filling out detailed returns can be quite a shock and not all the self employed are natural financially minded or adept at form filling.

The self assessment is not too difficult to complete and made a couple of brief calls in the past but my situation isn’t complicated. I would also state that the helpline was excellent so why has HMRC taken this step?

Quite incredible that they are shutting the helpline for a full six months of the year and expecting enquirers to reply on “chatbots” which are even more frustrating than call centres from a certain part of the world.

And for tax too. This isn’t about returning an unwanted parcel to Amazon (who actually do have excellent customer service) but about the largest financial transaction most people will make in any one year.

Whether the decisions was driven by HMG or just HMRC independently doesn’t perhaps matter but the supposed party of enterprise should perhaps consider the needs of those it claims to represent

Metro Bank. Bad news for (nearly) everyone

Few people would claim that there is too much competition in retail banking so the seemingly gradual exit of Metro Bank from the market is surely not good news for anyone outer than their direct competitors.

A cut of 22% of the workforce by April is, to put it mildly, brutal.

I have a number of contacts at the bank because they are involved in asset and invoice finance and I certainly hope that they are not affected by these cuts but there has to be uncertainty about their future in the business banking market. Their lending has been conservative but very competitive on price but in my (limited) experience, their day to day banking service has been pretty mixed.

Personal banking is their main speciality of course and it still has to be questioned whether they have simply overestimated the appetite for face to face service. Also they are facing strong competition in that area from Nationwide with their sharp and clever advertising campaign and a deserved reputation for service which is sky high.

We have also all but lost Coop banking from the business banking market and the launches of old brands such as William and Glyns have simply disappeared. There is competition within the online business banking sector but i’ve often found that the options are bedevilled with restrictions

I personally hope that Metro can turn things around but let’s see

Is this retail chain finished?

I think many of you will quickly recognise this rapidly fading brand which was once a genuinely well loved British favourite.

The empty shelves and tatty fittings (when were any of this chains branches ever updated?) are not untypical. This photo I took today in Twickenham.

Boots are a shambles and a horrible example of a business taken over by faceless investment funds run by clueless overpaid bottom line driven corporate types. The stores are dated, confusing, charmless and even pretty dirty. There is no care or attention given to the brand and surely you don’t have to be a Mary Portas retail expert to know that empty shelves send out a depressingly negative message.

Recently they announced closure of 300 branches but I wonder if anyone really cares? It would appear that pharmacies are ready to immediately step into their shoes which in itself, asks serious questions about Boots’s strategy. You can also be assured that the replacements will be considerably more appealing at every level

What a downfall. It isn’t irreversible as Marks and Spencers have spectacularly proven but you feel that the present owners haven’t a clue.

No retail chain or any other business has a divine right to exist but when a hugely respected family owned chain is run down in such a dismal manner (they are notorious for treating their suppliers poorly too), then we all have a sense of something lost.

Understanding Credit control

Credit Control is one of those tasks (like sales or marketing) that everyone seems to think they can do but in fact very few can. In a previous life, I was a credit manager at a number of companies and I did plenty of hiring and training. Finding the ideal credit controller is very difficult

I still advise and assist clients but for day to day credit management, I refer to an excellent agency who have proved to be very effective with a number of my clients

Why are they effective?

Its not because they are aggressive “debt chasers”. Only the terminally naive believe that this is what credit control represents. The key is their experience and ability to engage with clients as well as knowing exactly when to take the required next steps. Thats an art that comes from experience and its a judgement which if made wrongly, can have consequences

Enforcing collection of a debt is not easy, as anyone with knowledge of the insolvency laws and small claims courts will verify. Thats not at all a criticism of the UK legal system in relation to debtors , which is one of the best in the world (try the USA or Italy) but just a simple understanding of the dynamics. It is also why credit assessment is so vital which in turn, requires a degree of serious attention and not just a cheap agency report.

Another crucial area is the resolution of queries. In truth, most debtors would rather pay the accounts than have a dispute hanging around and this is why query prompt civil and engaging query resolution is vital not just for cash flow but also for client relationships. Leaving unanswered disputes unanswered for weeks or even months simply leads the debtor to, quite rightly, assume a lack of interest or a simple lack of organisation. Hardly conducive to business development

Also there is a shockingly naive tendency by some to assume that queries can be bullied away by threats. Ive seen this and its madness

And you can’t cut corners with credit control. Dumping the task on a reluctant employee (usually junior financial staff who really are the very worst candidates due to their introverted nature) is pointless. It simply doesn’t work.

Good relationships with debtors are vital. My introduction to Credit control was through the best man manager I ever worked for and his motto was always “the customer is king”.

There is much more to consider but these are my thoughts for now having seen recent examples which are disturbing.

There are two significant factors that bring businesses to the brink of collapse. One is cashflow and the other is loss of clients.

Need I say more?

End of The Body Shop but will the saga continue?

This is a story that might be running for a while yet.

Certainly the collapse appears to have been a little controversial with the new(ish) German owners quickly pulling the plug and it appears that we are again looking at a possible Wilko scenario with the “missing millions”

However underlying all this is simply a retail chain that had not developed and perhaps lots its way. It was “trailblazing” back in the day and this excellent piece probably explains the reasons for the collapse perfectly