|This time last year, I said: “Looking ahead, we know that 2009 will be a difficult year for most SMEs: cash flow will be tighter, funding harder to find, disputes more common, there will be fewer opportunities and many more insolvencies.”
Certainly, 2009 saw many more insolvencies, up around 39% for companies compared to the previous year. This seems to reflect worsening markets and less finance available for companies that need medium-term support. Bank lending to small businesses has increased by only around 4% over the year and cash flow is certainly being squeezed ever harder as customers are taking longer to pay.
The property market has remained depressed, and prices have fallen. However, there have been signs over the last few months that the housing market has started to improve. Mortgage lending is rising again and developers are beginning to find opportunities that weren’t there a year ago. Our experts are predicting that this market will continue to gradually improve in 2010.
Clients this year have been clamouring for advice on ways to cut their business rental costs and rates liabilities, especially on empty properties. Businesses are finding that there has never been more reason to have the terms of their lease checked by a solicitor and to negotiate a better deal.
Company directors, especially those of insolvent companies, have been contacting us for advice on how to avoid personal liability should the worst happen and their company end up in liquidation.
2009 saw a continuing increase in disputes between directors, and more and more are realising that taking advice as soon as a difference of opinion becomes a dispute can save them a lot of money – and heartache.
Business disputes as a whole have increased steadily, as predicted. Careful management of disputes from the outset has never been more important and often results in it costing far less to resolve the dispute.
There’s been a large increase in regulatory issues. The Companies Investigation Branch of the Department for Business, Innovation & Skills is just one of the regulators who seem to have been more active in 2009. More and more companies are facing investigations or court cases for regulatory matters, as well as directors dealing with court cases to disqualify them as directors.
For SMEs, 2009 was certainly a far more difficult year than 2008. I believe that, by this time next year, we should be seeing the signs of a sustained (although steady) recovery. I predict that many more businesses will fail in the first half of 2010 but that this should fall in the second half of the year.
As far as Cousins Business Law is concerned, we have grown steadily in 2009. In April, Nigel Musgrove joined us to boost our commercial dispute management services and also to add his expertise in licensing. We are delighted to report that this has been recognised by the leading reviewer of law firms, Chambers UK, who have included us in their directory as one of the country’s leading firms in this area.
This month, Paul Harrison has joined us to boost our commercial property work. He specialises in the buying and selling of commercial properties, business leases and property development work. We are now well placed to deal with the increasing property work and to offer clients an even better service in 2010.
I would like to take this opportunity to wish you all our best wishes for the festive season and hope that we can dust ourselves down and prosper again in 2010.