Millennium bug could wipe out 1000 firms

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Millennium bug could wipe out 1000 firms FINANCIAL MAIL ON SUNDAY

Source: Mail on Sunday

MORE than 1,000 small firms face financial collapse because of the millennium computer bug, a leading business support organisation warns. The forecast by the Federation of Small Businesses is the first to estimate the number of likely casualties in the small firms sector.

It says the bug, caused by computers' inability to recognise the digits 00 as the start of the new century, will increase business failures by 10% in the first quarter of next year.

Business collapses on this scale would hit the economy, which is increasingly reliant on small companies to provide growth and jobs.

The victims would almost inevitably drag down scores more with them because they would be unable to pay suppliers and other creditors.

The federation's warning comes on top of last month's State of the Nation report by Action 2000, the government body set up to tackle the Bug.

It said a 'worrying' 27% of small and medium firms had not taken the necessary steps to prepare for 2000.

Another 37% had no fallback plans if their preparations failed.

Action 2000 chairman Don Cruick-shank said: 'Those who have done next to nothing will face problems with suppliers and customers that could make their businesses fail.

'Firms should use the valuable time left to put down on paper what they will do if something unexpected disrupts their operations.' Companies are also warned not to be complacent even if they have installed 'safe' computer equipment and software in the past few years.

Petfood maker Pascoe's of Bridgwater, Somerset, had to replace computer accounting packages and hardware bought just five years ago because it was not millennium compliant.

'It cost 30,000 to replace,' said John Crispin, 57-year-old company secretary and its Year 2000 project co-ordinator.

Even low-tech businesses that do not use computers risk going under if they fail to check that suppliers are geared up to squash the bug.

The Phoenix Walking Stick Company of Nailsworth, Gloucestershire, makes its sticks from chestnut saplings using traditional methods. But it had to check that the supplier of the rubber ferrules for the ends was ready for the bug.

Managing director John Faulkner said: 'All our accounts and customer information is also held on computer.

It has taken two weeks to make sure we are compliant.' The federation believes most firms will survive the first week of the new century because of the New Year holiday.

But the second and third weeks will expose any gaps in firms' preparations, and by the fourth week these may be too late to rectify.

'The fourth week will be crucial,' it said. 'Some companies may not be able to invoice, or they will be faced with other difficulties producing an immediate cashflow problem. This may push them over the edge.'

Publication date: Oct 31, 1999 ) 1999, NewsReal, Inc.

-- Uncle Bob (UNCLB0B@Tminus60&counting.down), November 02, 1999

Answers

1000 firms? If Y2K is bad enough to take out 1000 firms, it'll take out 10,000 firms at least.

-- cody varian (cody@y2ksurvive.com), November 02, 1999.

This is an estimate for the U.K. only.

-- snooze button (alarmclock_2000@yahoo.com), November 02, 1999.

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