Compensation for loss of trade

As anyone driving in or around Plymouth at the moment will be only too acutely aware, the dozens of different sets of roadworks in the city are causing lots of driving delays for the poor old motorist.

But what about the traders on Mutley Plain, given 10 days notice that the 'Plain was being shut to everything bar buses for up to 6 weeks? It goes without saying that the utility company in question has acted grossly irresponsibly in this situation, with scant thought for the livelihoods of many small businesses, both on the 'Plain and the surrounding areas - North Hill and Hyde Park Road included.

So what can a small business do about it?

Considering Mutley Plain specifically, though applicable to a number of loss of trade scenario's, the reality of proving loss of income will be difficult to prove, as any small business owner knows, a whole host of factors influence trading income from one month to the next (think the weather / fashions / uni term times etc etc). So, to stand the best chance of securing compensation, quality evidence for lost trade is essential, and the more evidence in support of the claim, then the stronger the case will be. Quality financial evidence will be the best evidence of all - here are some tips:

1) Most important - keep records tidy and up to date. Information to assist with claims will be more easily extractable then.

2) Traders will need to be able to compare takings for the period of trade against takings during 'normal' periods (two years worth of comparison data has been suggested).

Firstly, traders will need to be able to identify the exact periods affected - no use doing the books quarterly - weekly takings if not daily takings summaries will be essential.

This means looking back at takings last year and the year before that. Dig prior years' 'Z' readings out the loft and do a year on year comparison. The more data the better.

Make this an 'intelligent' exercise - look at the data and consider whether other factors may have influenced takings in prior years (eg was scaffolding up, or did you close for holidays?) such factors may have artifically reduced takings making the comparison unreasonable. That all needs to form part of your case, and you can start building your case now.

3) Non-financial evidence: do you have other sources of evidence that could be used to substantiate a claim? Do you measure footfall through the doors with one of those beeper things? If not, is it worth getting one and taking daily readings for the period of work and after?

Deliveries - have deliveries of stock failed because of lack of access? Note each and everyone down, and the impact its had on the business.

4) Empirical evidence: Consider what is going on in Plymouth during the work - would you normally be benefiting from a particular event at the University, but sales haven't materialised as people can't get to you? Or with the work spanning Easter, is your planned Easter promo campaign ruined? If so, note it down, and include within your wider case.

If this all sounds complicated, the reality is that for your accountant, the work could be done alongside existing services they provide. The work at Mutley will span two accounting years for many traders - a final tip from us is to get your books to your accountant asap after 31 March, and explain the scenario. As they do the normal year's work, it will be cost effective for them to prepare the additional financial info likely to be needed for a compensation claim.

In support of all the Mutley traders.
TAA