Eurotek Furniture Supplies, one of Bognor Regis's biggest employers, has gone into administration. The firm had a turnover of almost £10m and employed 130 staff. The company had recently open an show room in London as it sought to expand so the company's problems came as a surprise.
Stuart Maddison, at PwC said: "The company has suffered as a result of the ongoing economic challenges facing the public sector which represented approximately half of its customer base. Due to a sharp decrease in sales, difficulties in meeting the company’s financial obligations, and having run out of alternative options, the directors of the company have placed it into administration."
The business is continuing to trade as a going concern and a buyer is being sought.
Given that half of its custom was public sector it is perhaps not surprising that it has found itself in difficulty.
The directors of any business that is exposed to public sector contracts need to have a long hard look at their business plan and be prepared. Some contracts may have long termination periods whereas others may be informal.
Business owners need to think about private sector clients or customers who are in turn exposed to the public sector. This is not always so easy as many businesses do not like to advertise that they have been making big profits on the back of government spending.
If the worst should happen make sure you have read our cost cutting pages to ensure that you preserve cash.