The economic downturn has had less of an effect on small business failures than anticipated, with many sectors seeing less of an impact than expected, a new report has suggested.
The survey, by business information provider Equifax, found while the third quarter saw an increase in business failures of almost 14% in the manufacturing sector, the services and wholesale sectors saw failures drop by 4.2% and 2.6% respectively.
The North East, which saw a 23.4% increase in failures during the third quarter when compared to the first three months of the year, that number had increased by less than 2% when compared to quarter 2.
Similarly, business failures in Wales increased by just under 3% in the past 3 months, compared to just under 15% in the past 6.
Neil Munroe, external affairs director at Equifax, said it appears some sectors have been taking the right precautions to manage cashflow.
“Although business failures continue to rise and there are a number of external factors which can hit even the most well prepared business, there are indications firms in some sectors are protecting themselves from some of the risks in tough trading conditions,” he said.
“Businesses need to continue to use rigorous credit checks, alongside ongoing monitoring of the financial status of their customers and suppliers.
“By operating best practice and harnessing the power of the latest risk management solutions, firms can minimise the threat of bad debt and secure the future of their business.”
© Crimson Business Ltd. 2008
