With the number of personal bankruptcies on the rise since 2015, and the government’s crackdown on phoenix activity announced last year in a bid to stem fraudulent losses, My Business asked readers whether they had suffered a financial loss because of another business falling into liquidation.
Sadly, financial losses because of the struggles of others appear all too common.
In the poll on the My Business website, which closed on 16 April, an overwhelming majority (87 per cent) of the 184 respondents admitted that their business had suffered financially as a direct result of either a supplier or customer collapsing.
Just 11.4 per cent of respondents had the good fortune not to have lost money in this way, while 1.6 per cent said they were unsure of their exposure.
With this in mind, business leaders of all size and industries are being urged to carefully assess the risk their clients, suppliers and other collaborators present in a bid to reduce these flow-on losses.
A recent study by credit information supplier Equifax found that it is businesses in their fourth year in operation that are most susceptible to collapse.
Meanwhile, debt collection firm Atradius’ Mark Hoppe said there are a number of ways to identify a struggling business before its doors are closed for good.