Loss of market share is main risk to firms
Your support helps us to tell the story
As your White House correspondent, I ask the tough questions and seek the answers that matter.
Your support enables me to be in the room, pressing for transparency and accountability. Without your contributions, we wouldn't have the resources to challenge those in power.
Your donation makes it possible for us to keep doing this important work, keeping you informed every step of the way to the November election
Andrew Feinberg
White House Correspondent
THE MOST detailed survey yet conducted into why UK companies go bust has found most collapses are caused by a loss of market share, and that small companies are far harder to rescue than larger ones.
The report by the Society of Practitioners of Insolvency covered 1,900 company failures. Loss of market share accounted for about half of all company failures. In 47 per cent of cases it was the primary cause, and a key contributory factor in 63 per cent.
The chances of saving jobs varied widely, depending on the size of the firm. Workers in businesses that employ more than 200 people have almost a 50 per cent chance of keeping their jobs if their company fails. Those in companies with 14 or fewer have a 7.5 per cent chance of keeping their jobs.
Only 13 per cent of business casualties with turnovers of less than pounds 1m were sold off in something like their original form, while 64 per cent of those with turnovers over pounds 15m were sold on by the receivers.
Mark Homan, president of SPI, said larger companies could afford to call on outside assistance, were more likely to have operations worth preserving, and found it easier to switch to new products than small companies.
Mr Homan said insolvency practitioners had done their job well during a recession in which most business casualties simply lost their markets. More than 72 per cent of all business casualties did nothing to avert failure when they knew they were facing problems.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments