Late payment is preventing construction firms from making the most of London Olympics business opportunities 
(08/04/2008)
Bibby Financial Services recently carried out some research across the construction industry to identify the key issues for 2008. The most common challenge identified was the issue of late payment and two fifths of firms admitted to spending at least 10hrs a week chasing outstanding payments/bad debt.
The late payment problems that have plagued recent high profile construction projects such as the Millennium Dome and Wembley Stadium could be stopping thousands of small businesses in the UK from making the most of the £21bn of potential new business up for grabs nationally through the London 2012 Olympic and Paralympic Games.
The complexity and scale of London 2012 means that it is not just construction firms that could miss out on new contracts. Manufacturers, electricians, designers and retailers, to name but a few, could all be on track to win new business, supplying products and helping with the design, construction and furnishing of the Olympic venues and villages which will be based in East London, Eton Dorney, Weymouth and Portland .
However, small businesses in the UK may well be steering clear of the Olympics through fear of the financial complications involved if project timings and payment slip.
David Robertson, chief executive of Bibby Financial Services, comments on how owners and managers of small and medium-sized businesses could overcome these challenges: “It is totally legitimate to be concerned about getting involved with mammoth, public sector projects such as the Olympics as past ‘white elephants’ have sometimes left a painful legacy.
“However, we want to encourage smaller companies who might consider being part of the Olympic supply chain to take advantage of the potentially lucrative work available and not fear the complications of chasing late payment. With alternative forms of finance, such as invoice finance, there is no need to worry.
“Invoice Finance, offered by companies such as Bibby Financial Services, can assist small and medium-sized businesses by providing them with an immediate and ongoing supply of cash by releasing up to 85 per cent of the value of sales invoices. This could make the difference between boom and bust as firms have access to vital cash tied up in invoices and can continue to pay for essentials such as staff and materials without having to take out expensive bank loans and overdrafts. In addition, invoice financiers tend to take full responsibility for chasing payment, including sending out statements and making reminder calls. This frees up precious time for business owners and removes the hassle and worry of chasing customers. “
The organisers of the tendering process have recently launched an online resource called ‘CompeteFor’ which provides information on London 2012 business opportunities through an easy-to-use website. Acting as a brokerage service between buyers and potential suppliers, CompeteFor is the first port of call for SMEs wanting to investigate Olympic opportunities.
Related categories: Construction services General Construction Heavy Construction and Civil engineering
