Businesses given timely advice on recession (From Darlington and Stockton Times)

Businesses given timely advice on recession

11:04am Friday 3rd July 2009

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Business owners have been offered timely advice on how best to protect their businesses during the recession.

Lawyers, a chartered accountant and a business advisor joined forces to support and advise owners through the economic crisis at a seminar held at BHP Law in Stockton.

The experts also offered suggestions on how local companies could position themselves ready for the upturn to make the most of the opportunities it might bring.

Jed Lester, a partner at Baines Jewitt chartered accountants in Stockton, said the particular challenges of this recession made it the worst in modern times.

"It's a new story for all of us and we need to write new scripts and develop new coping mechanisms to deal with it," he said.

Mr Lester advised revisiting business plans, budgets and forecasts and updating where necessary.

He said business owners should know their peak borrowing requirements and identify clearly the movement of cash in and out of a business.

Mr Lester also recommended owners to ensure they were fully aware of any restrictive covenants around their bank borrowings.

David Lucas, a partner in the company law team at BHP Law, said despite the tough economic times people were still looking for opportunities to buy businesses and owners should think like a buyer when auditing their business.

"We are always coming across people who are looking to acquire and others who are looking to get out. There are deals to be done. The companies that have money are looking to grow and take advantage of the deals that are around," he said.

For those not looking to sell, his advice included understanding suppliers' positions during the recession, managing staff morale and not becoming too internally focused.

David Birks, a solicitor at BHP Law and a specialist in directors' duties, reminded all directors to ensure they kept up to date management records "You must document the decisions you took as directors to steer the company to a better trading position and that you acted in the best interests of creditors, employees and the company," he said.

Mike Lakinski, a business development manager with Business & Enterprise North East, said now was a good time to develop staff through training and that funding may be available to support those companies that wanted to grow the skills within their organisation.

Colin Hields, of CA Hields (Engineering) Ltd of Stockton, said the seminar had provided useful information.

"We are looking to invest in other areas and have just bought a company in Newcastle that had gone into liquidation so funding for training would be of interest to us," he said.

Peter Kemp, of Twin Services Ltd in Stockton, said: "In the construction industry in particular retentions, where payment is kept back, is a big problem. It was interesting to have the issue of artificial overdrafts pointed out because that is something we have to keep a close eye on."

ends.

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