Accounting firms and restructuring experts, including KPMG, are predicting a surge in small to medium sized companies falling into administration as a result of the knock-on effect following government spending cuts.
What is expected to happen is that the government will set up centralised procurement teams that will adopt a supermarket-style buying approach. This will undoubtedly favour larger suppliers who have the capacity for larger orders and the ability to shave prices down. These larger firms will see benefit in merging with each other or buying up smaller, specialist companies. Consolidation is inevitable.
The warning is plain for smaller companies who have government contracts or who subcontract to firms with public sector contracts: start putting cash away, cut your costs and look to expand your customer base. According to KPMG, at most risk are companies in the property and business support sectors. If there is a discretionary element to the demand for a firm’s products or services, then particular care should be taken.
According to R3, the insolvency trade body, a huge 30 per cent of small businesses say they are either ‘reliant’ or ‘fairly reliant’ on government contracts. 10 per cent of small businesses are worried that they may actually fall into in an insolvent situation if they were to lose their public sector contracts. R3 predict that the latest wave of government spending cuts will put nearly 150,000 small businesses in grave risk of insolvency.
Popular and well-regarded Sushi and Ramen restaurant and takeaway, which is situated in a prime city centre location in Norwich. The premises are set over three floors and are presented to an extremely high standard throughout and offers the opportun...
LEASEHOLD
Established respected business, holding valuable private and public sector client base, there being a number of key clients, some paying a retainer and from which regular repeat business is received ensuring a substantial pipeline figure.
A specialist manufacturing business of quartz and granite kitchen and bathroom worktops. It has been established in conjunction with retail premises (retail premises are also available if required). It offers a supply and fit service and is located i...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.