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MONEY COMMENT
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It's a pretty unpleasant experience when a company you've invested in goes bust and you lose your entire investment. What's even worse is if the company is also your employer... Until a few years ago, a college friend of mine was a sales manager for an American software house. His shares rode the dotcom boom all the way up to $130, making his 30,000 free share options worth almost $4 million at their peak. However, the company fell as spectacularly as it rose and my chum lost both his job and his (now worthless) options, a horrible double blow. Your employer going under is a very scary prospect, even more so if you've invested heavily in your company's shares. Ominously, more and more businesses are going to the wall, at least according to a recent survey. In the latest issue of its publication Industry Watch, accountancy firm BDO Stoy Hayward estimates that 63,000 UK businesses will go bust between now and 2006. That's an average of 419 businesses folding every single week. Just short of 20,000 firms went under in 2002, up by 6% on 2001. BDO predicts that business failures are set to rise across the board, in sectors including manufacturing, construction, retailing, leisure, travel and transport, and wholesaling. The service sector is the only industry where BDO predicts a fall in business collapses. So, what should you do if you're worried that your employer is in shaky financial health? Watch out for the warning signs Keep your ear to the ground and pay close attention to your office grapevine. If you react to the warning signs early enough (such as management departures; unpaid bills or expenses; budget freezes; problems with bankers; redundancies and office closures), you may be able to jump ship before the axe comes down. Tighten your budget Improve your personal financial fitness by cutting back on your expenses using our financial healthcheck, reduce your debts and save more. Losing your job If you do end up down the Jobcentre, you must learn how to deal with unemployment - and fast! You'll find support and encouragement from the Foolish community at our Dealing with Redundancy discussion board. However, with less than 1 in 70 British businesses expected to go bust this year, don't have nightmares - most established firms are here to stay! More: Get Out Of Debt Centre | Beware of Failing Employers