Recently in the news were the stories of various energy companies going bust, or out of business. This was due to rising wholesale costs, and a cap on what the energy companies could charge; so they lost money and went bust.
If you take a moment and think back on all the stores and companies that have gone out of business over the years, there are quite a few:
Borders
Toys r Us
Debenhams
Staples
BHS
Woolworths
Blockbuster
Poundworld
Maplin
Peacocks
Barratts
And these are just a few of the stores and retail establishments that have gone away
There are also other types of companies:
Thomas Cook
Sheerings Coaches
Wrightbus
Monarch Airlines
Carillion
Of all these companies collapsing, perhaps Carillion was the largest. Over 3,000 jobs lost, over 400 “public sector” projects unfinished, this includes hospitals, prisons and schools.
In my city alone there was a major hospital project left unfinished and in peril.
While companies going bust is sad to see, there is such a knock-on or domino effect to this, and that is beside the fact of employees losing their jobs, possibly going on benefits and this being an additional drain on the government.
This domino effect hits supply chains, and suppliers who had contracts with the companies going bust.
Look at the current petrol crisis.
The UK leaves the EU, we Brexit out of there. Which causes many EU Nationals to retreat back to the EU. Many of these EU Nations, well in fact all of them that worked here, provided a valuable service, and one of those services was HGV drivers.
Now with a shortage of HGV drivers, in particular those trained to drive petrol tankers, there is a fuel shortage. The government states there is enough fuel, just not enough drivers.
Domino effect.
So when a company as large as some of these like Carillion go into Administration and bust, it affects a lot more companies as well, some of which may go bust themselves!
However, in some instances, a company can go bust and return, rise from the ashes, in the form of a Phoenix Company.