The UK’s smaller building firms appear to have been disproportionately harmed by the recent recession and economic turbulence, according to NHBC figures cited by industry publication Building.
In the statistics, shown exclusively to the publication, the number of small house builders, with fewer than 30 new homes completed in 2014, stood at 2,244 – down from 5,156 in 2007 before the recession took hold.
By way of comparison, the number of firms with more than 500 completed homes fell from 37 to 36 in the same period.
Clearly, even as a proportional change, that’s well over half of the small firms and less than 3% of the big builders, so the larger number of SMEs in the first instance is not responsible.
Large builders now account for around two thirds of the total market, and firms building fewer than 100 homes a year now account for just 12-13% of completions, down from over 25% in 1995.
Access to finance was the second-biggest challenge cited by respondents to the recent NHBC survey in terms of what is holding SMEs back.
Now, nobody can force the banks to begin lending, but you can keep a close eye on your own cash flow, and CPA are here to help with that.
We want to make sure SMEs in the construction sector are getting what they are owed, so late payment and non-payment are not exacerbating financial pressures from the banks.
There is no excuse for debtors not to pay on time, and claims that they are overstretched financially are not your problem as a business; your only problem is making sure they pay in full and as soon as possible.
CPA can liaise directly with the debtor so that you don’t have to, and can work out the quickest way to get the most money into your business account, even if it means waiving statutory interest charges or allowing the customer to pay you back in smaller installments than was first agreed.
The important thing is, every penny into your business account on an unpaid debt is a penny towards your cash flow that you otherwise would not have – and that all helps SMEs to cover their ongoing costs and compete against the big boys in a congested construction sector.