Mieux vaut prévenir que guérir*

September 17th, 2019
17 September

What is the sixth largest French city? The answer, as many of you may have already guessed, is London. And one of the reasons that our capital has so many French people living and working there is that it is very easy to start a business in the UK compared with starting one in France.

You can certainly start a business in this country within two days and even less. In France, I remember an entrepreneur complaining that it took him two years to officially register a company there. Things may have improved since then but you get the idea.

Apparently, the UK is the third easiest country in the world in which to start a business and we continue to create start-ups at quite a rate.  According to mes amis in the Institute of Chartered Accountants in England and Wales (ICAEW), the country had 3.5 million businesses in the year 2000 and by 2017 we had 5.7 million businesses.

But hang on a minute – mais attendez une minute. That trend has now come to a halt with new business growth slowing down. Some blame the uncertainty of Brexit, others point to the highest rate of employment since records began (you have a secure job so why risk starting your own company?). As the man in the Paris Metro will tell you “Celui qui n’avance pas, recule” (“Who doesn’t move forward, retreats”).

Business failure is another important factor in these figures. We have seen some well-known brands bite the dust in the last two years and, of course, there have been many other failures of smaller enterprises which do not make the headlines.

The ICAEW points out that there are many ways in which a business can fail, adding “it seems reasonable to assume that those enterprises have encountered difficulties in things like securing growth funding or failing to manage cash flow”.

I can think of quite a few others, such as the unexpected loss of a major contract (“Merde, il pleut” or words to that effect…) or diversifying into other products instead of concentrating on the core business – “Si vous essayez d’attraper deux lapins, vous attrapez ni l’un ni l’autre (“If you try to catch two rabbits, you catch neither”). 

Just because a company is heading for the rocks does not mean that the directors will definitely run aground. At ipd we work regularly with accountants who have client companies struggling to keep it all together. Our years of experience enable us to expertly pinpoint the problems and come up with the best solutions for everyone.

And the quicker we become involved, the more effective those solutions are.

Mieux vaut prévenir que guérir – * Prevention is better than cure.