It’s been a fairly torrid couple of years in the business community where cash has been a scarcity and confidence has taken quite a battering.
There are enough doom merchants and naysayers around without me joining the heap, so I believe it is well and truly the time to look forward. We need to get out there and show what we can do.
Those businesses that have reacted to the perfect storm that hit us and taken the timely decisions to optimise cash and improve performance will hopefully now be in pretty good shape. Those who haven’t will hopefully still be with us.
But what now lies ahead. The US recovery seems to be slowing, which we need to watch, but there are opportunities on the horizon, not least from the government’s announced austerity measures. The public and private sectors need to work together to identify functions that can be done by private companies to drive out efficiency and save money. So there will be opportunities for all of us in a wide range of sectors ranging from IT to waste. There will be price pressures so we need to get better at what we do, and do it cheaper. But look for the opportunities now.
And while we’re on the subject of getting off our backsides, there’s a volcano about to erupt in the mirth filled world of banking. It was easier to get money out of a Presbyterian Scot (no offence to Presbyterians, Scots or former prime ministers) than it was from the bank. Last year the banks went through a period if internal turmoil and there was little credit available while they worked out their problems.
But there is a refinancing mountain of about £450bn looming here in the UK in the next three years. And there will be a lot of competition for that money so GO EARLY. You need to explain why a share of the debt should be allocated to your company. And the bank will scrutinise business more than ever before, so it’s no longer sufficient to be a good bloke, you need to have an explanation of how you have survived the last three years and what you plan to do next. And if your facility is due to expire in October, call the bank now.
On the bright side, apparently almost half of small businesses believe that there is no point in approaching the bank any more, so there will be more chance for the rest of us. Believe me – they do need to lend money. So don’t be last in the queue.
Stuart Wilkin Writes for Insider
www.insidermedia.com
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23/07/2010 15:50:28 by
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George Osborne’s first budget hardly threw up any surprises but it certainly did seek to clarify the vision of the new reality that we are becoming accustomed to. ‘Tough but fair’ has been the chancellor’s strap line over the past 24 hours, but today’s detail was hardly Harry Callaghan.
The coalition’s fiscal team has been at pains to communicate just how shocked they have been by the previous regime’s profligacy, to prepare the way for George to unveil his ‘progressive’ emergency budget. And yes, it does look painful in areas, but we can’t pretend to be surprised.
Experts have been predicting a rise in the VAT rate to 20 per cent for over six months. On the one hand, it is a tax that penalises all consumers equally, regardless of wealth – but on the other hand it’s probably the least painful way of raising £13bn a year. When the rate was reduced to 15 per cent in an attempt to stimulate sales last year did anyone actually notice? It cost us £12bn. And now we more are in line with France at 19.6 per cent and Germany at 19 per cent. This was an easy move to make because the market already had the expectation.
The support for small business comes in the form of a one per cent cut in Corporation Tax for four years until it reaches 24 per cent and the removal of the threatened rise in National Insurance contributions for employers.
But the announcement of a two year pay freeze is the tip of an iceberg that doesn’t only threaten to trim the flab in the public sector, but is the precursor to the mother of all attacks on public sector finance. I’m all for abandoning the endless and pointless stream of quangos, consultancies and expensive studies into the socio economic impact of the demise of the futon, as well as
redressing the balance between managers and medical staff in hospitals.
But a reduction in public sector budgets across the board will have a knock on effect to small businesses. Some of us have had it good while government bodies have been desperate to spend their seven figure budgets before the year end, but those days are over.
Other than that, I can’t argue with the increase to 28 per cent in Capital Gains Tax for high rate taxpayers and I’d be a brave man indeed to argue against the Bank Levy.
And with the Liberals in a position of recently unrivalled influence there was never any danger of alienating all but a handful of their supporters by revisiting that silly increase in tax on Cider.
Stuart Wilkin writes for Insider.
wwwinsidermedia.com
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22/06/2010 18:40:59 by
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Call me a cynic but I have a sneaking suspicion that sales of Kleenex will enjoy an upsurge over the next three and a half weeks. And there are two good reasons for that.
Firstly, those of us who suffer hay fever every time it gets a bit muggy will be in the minority praying for some low pressure. And even if we get our wish it is inevitable that the summer cold, spread wilfully and with no social conscience on the part of the under elevens, is on the way.
But more critically, it’s the World Cup, and anyone who thinks we’ve witnessed our last tear jerking howler following the hapless Rob Green’s fumble against the limited USA team at the weekend is blissfully deluded. I suspect (and I really hope I’m wrong) that come the latter stages of the tournament grown men the length and breadth of the country will again be blubbing inconsolably as we lose a penalty shoot out to Germany, Argentina or preferably Brazil.
Back to my earlier point. Not everyone has a Wright-Phillips-like bounce in their step in the summer, but what’s the betting that even those who aren’t snorting anti histamines throw the odd sickie during the World Cup?
So how should employers deal with the irreversible tide of hysteria?
A recent survey has suggested that there are more Scrooges in the Public Sector where only 30 per cent of organisations will allow staff to work flexibly to let them watch England play against Slovenia at 3pm next Wednesday. The Private Sector appears to be applying more common sense at 51 per cent.
Against the backdrop of pay freezes, redundancies and the disappearance of staff perks that has blighted the market in the last couple of years I do wonder what the 49 per cent are thinking of. The loss of three hours productivity to allow your people to cheer on our team is surely a small price to pay. Employers who stick to their guns when staff presence isn’t essential betray an approach to morale that leaves a lot to be desired.
And when the job market recovers don’t be surprised to see the downtrodden workers up sticks. There’s an awful lot of goodwill to be gained by showing your people that you care and it will be repaid tenfold. Those employers who allow their staff to watch the game will almost certainly suffer fewer sickness absences, and not just this year.
In any case, every office has someone who doesn’t see why everyone’s getting worked up about a bunch of blokes chasing a ball around – so now’s their chance to shine.
Stuart Wilkin writes for insider.
www.insidermedia.co.uk.
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15/06/2010 09:36:58 by
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When the unguarded secret of the General Election date hit the press yesterday I’m sure I was not alone in bracing myself for the inevitable flow of promises, platitudes and ugly, puckering, baby-alarming leaders rampaging around the country.
There will be some funny moments to come I’m sure. I always look forward to the Mayor of London’s appearances, despite their anachronistic irrelevance to anyone north of Milton Keynes.
But they’re all the same aren’t they? When the expenses scandal grew last summer the snouts in the trough seemed to be impervious to party allegiance. And did you know that Harriet Harman went to the same school as George Osborne? No surprise really when you think about it.
Lord Mandelson’s department is looking forward to continuing its support for small business, which will be warmly appreciated if the increase in National Insurance hits as planned.
But while the circus comes to town let’s not lose focus on our own businesses and our own communities. And so I want to give some publicity to an organisation that has supported both for 27 years.
Business in the Community emerged from the rubble of the Toxteth Riots in 1982, when a handful of businessmen came together and decided that they had a wider role to play in society. They understood that healthy High Streets need healthy back streets.
The charity, spearheaded by the Prince of Wales, has the aim of mobilising employees to work in the community. And the employee’s entitlement offers something more than the day job. Projects can range from refurbishing a community centre to organizing a social activity for the elderly.
There are also individual volunteering opportunities such as going into schools, for example, in supporting a primary school breakfast club. And this type of community work can aid staff development. It gives your people the opportunity to flex some managerial muscles in a safe environment away from the sharp end of the business.
Times have changed and the best employees can no longer be wooed by an attractive salary and job title. They increasingly want to work for businesses whose values are aligned to theirs. You can keep your people engaged and promote a vibrant team ethos by seeing what you can do outside the office or factory walls.
Public opinion has changed towards the role of business in society. Some higher profile companies like Enron have fallen by the wayside having got it wrong.
So while Gordon, Dave, Nick and the others convince us how they can help us, why don’t we help each other? Have a look at www.bitc.org.uk.
Posted:
07/04/2010 15:00:02 by
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Last week I received a letter that was addressed to someone in a neighbouring town. And as luck would have it, I met my postal worker (gender neutral… I’m not suggesting he/she’s batting for the other side … I just don’t want to upset the politically correct among us) at the door this morning, so I could happily pass back the misdirected mail. But it wasn’t quite that easy. And the conversation went something like this:
Me: Hi - this letter needs redirecting.
Postal Worker: Where’s the nearest post box?
Me: On Booth Street.
Postal Worker: Well can you repost it then?
Me: Can’t you?
Postal Worker: I’m not going that way.
What?!
Maybe I’m slowly and worryingly turning into Victor Meldrew, because in truth, the post box is actually only a short five minute walk away, and I’d surely be passing it soon enough. But then I also cling to the hope that my Postie would equally be passing a post box in the next couple of weeks. I was going to ask whether last Christmas’ industrial action had been a success and if so – what the gripe actually was – but I thought better of it. Not quite Meldrew yet then, thanks goodness.
But when did ‘the customer’s always right’ turn into ‘the customer’s a pain in the backside’? Embarrassingly bad service has been lampooned as long ago as when Basil Fawlty thrilled the nation with his 1970’s bigotry. But more recently David Walliams’ hideous ‘Computer says No’ character was too close for comfort.
There’s still something quite funny about the experience of being served by one so devoid of charisma, courtesy and wit that they look and sound like they’ve just walked into a door. But, and here comes the business message, it’s not in the slightest bit amusing for the employer. Because, other than for twisted people like me, bad service leads to the more discerning customer going elsewhere.
A smile costs nothing. So if your people can’t be friendly or helpful get rid of them (having followed employment regulations closely of course). At times like these, make sure that all of your staff can help to improve your business, unless they’re so hilariously bad that they make everyone else laugh – but that’s a risky approach which I can’t condone.
Posted:
30/03/2010 12:26:26 by
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Every New Year brings with it a sense of optimism. Admittedly it may be guarded this time around; surviving last year was an achievement in itself. But nevertheless, now that the thaw is in full swing we can approach 2010 with the vigour that we had planned.
I imagine that by now many New Year resolutions have been well and truly broken. Whether it’s going to the gym, not drinking until Friday lunchtime or being nice to the next door neighbour, none of us expected to get much further than the eighth did we?
But in business the one promise that we must deliver on is to turn our orders into cash as quickly as possible. Cash used to be king – it’s now some sort of deity. And one of the consequences of an upturn in the economy is that this most precious resource runs out as sales increase.
Which is why I am delighted to welcome Charlotte Parry to our team, as she brings with her a wealth of experience in effective management of the cash cycle. Charlotte is the right person to help businesses oversee work in progress, invoice in a timely way and liaise with clients to ensure that relationships are strengthened before collecting the cash.
Not only does Charlotte bolster our team, she can also help yours.
At a time when you are rightly focussing your energy on ways of turning your orders into cash this can be a real distraction. If you don’t employ a credit controller then you know how quickly you can get sucked into debt collection activity. While you’re on the phone to a client it’s easy to get involved in a financial conversation that you hadn’t originally intended. And then your relationship has changed.
Many businesses that started by outsourcing payroll have moved on to other areas such as health and safety and HR. A logical next step is towards the irksome function of ledger management. All you need to do is process the customer order and then send it to Charlotte, who will then:
- Process the order onto your client’s system
- Speak to your client to maintain confidence
- Chase late payments with professionalism and empathy
- Advise you of payment
Charlotte will also manage your purchase ledger, liaise with your creditors and create payment runs as required.
Outsourcing your sales ledger management can be cost effective and a boost to business, allowing you to spend your time on the activities that will help your business to grow.
And while New Year hangovers are a distant memory, you don’t need another unwelcome headache!
Posted:
22/01/2010 14:07:53 by
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Never one to pass up the opportunity to spread a bit of festive cheer, I thought we could raise a glass of hot wine to our economy, as we are finally standing out from the rest of the civilised world in these difficult times.
At the end of the year in which our prime minister led from the front in his most honourable purpose to save the world, it looks like the rest of the world is now clawing away from the precipice. In fact, this magical act of philanthropy on the part of our leader has ensured that only one G20 country remains in recession. Us.
Even the Irish have shown us a snowy pair of heals. Twelve months after we all raced to Ladbrokes to plant the remainder of our savings on the embattled Irish economy following the fate of Iceland, the likeable vagabonds grew their output by 0.3 per cent in the third quarter of 2009. Meanwhile, ours shrank by 0.2 per cent.
And economists have recently hit on the problem. We’re not spending enough. People are repaying debts, instead of spending in the shops and amassing more debts. That doesn’t sound too stupid when you think about what might happen next year. VAT is going up, after the election other taxes will follow, energy bills are unlikely to fall and public spending is seizing up.
So, as anyone with the merest hint of fiscal nous would do, families are being more frugal. Last year we all tucked into our partridge inside a duck inside a chicken inside a goose inside an ostrich. In some ways, it’s quite nice to get back to the Turkey and stuffing this year.
At the end of 2008, UK households owed more than 180 per cent of total net disposable income, according to the Organisation for Economic Co-operation and Development. German households owed 98 per cent, French consumers owed 100 per cent and only our special partners across the pond could get anywhere near us.
Anyhow, the share of income saved in banks is at its highest level in more than a decade, despite the rewards being at their lowest, and our unwillingness to spend will almost certainly prolong the City’s gloom.
But surely prudence is the right plan. Let’s find our feet again and not be too downhearted about trailing the Irish. After all they’re better than us at Gaelic Football, Eurovision and Hoolying (whatever that is). Let’s spend, but spend well on quality products. Let’s support each other and buy from each other within the business sector. I’ll stop short of suggesting we consider an alternative to supermarket shopping for fear I may disappear.
And whatever anyone tells you – it isn’t actually your fault.
So have a wonderful Christmas. Try not to swear when you trip over the Go Go Hamster as you stagger towards the settee clutching a glass of port. And remember, no matter how bad things appear, there is a God. And let’s take a moment now to thank him now for Rage Against The Machine.
Stuart Wilkin writes for Insider
www.insidermedia.com
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23/12/2009 15:29:59 by
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So the Chancellor delivered his pre budget report today with his usual sense of mirth. But he resisted the temptation to throw out pretend figures willy nilly, as not everyone saw the funny side 12 months ago.
In November 2008, as we stumbled towards the eye of the storm, Mr Darling predicted that the government’s borrowing would reach £118bn by the end of 2009, before falling to £105bn and then £54bn in 2010. Cue hoots of derision and yells of ridicule from the retired majors, Oxbridge graduates and members of the Hellfire Club on the opposition benches.
One year on and it turns out that the Eton Rifles were pretty safe to laugh out loud. And so today when Mr Darling admitted that the deficit was now £178bn and he predicted a fall to £176bn next year, there were less belly laughs and more muffled sniggers from the back of the class.
I think we’re becoming a bit immune to the shock effect of the figures. Would anybody have really noticed if the Chancellor had said, ‘I’m confident that our current deficit of eight hundred trillion will reduce by over 3 per cent next year’? Not everyone by a long stretch.
What does it actually mean for us in business? In general terms some spending cuts and tax rises. But more specifically:
- We can anticipate a further half per cent increase in national insurance in 2011.
- VAT will be going back up to 17.5 per cent from January. Mr Darling said: “To cut support now could wreck the recovery.” Does he know something I don’t?
- The Chancellor confirmed the government was seeking cash from major banks for a £500m Capital Growth Fund that would help increase lending to small and medium-sized businesses. Good.
- The £500m fund will be voluntary. Bad.
- And we can have our own laugh at the banks. There will be a one-off levy of 50 per cent on bank bonuses above £25,000, to be paid by the bank, not the employee. Bonus levy is expected to yield £550m. But maybe we shouldn’t giggle too much. I haven’t worked out where the banks will get the money from yet.
And speaking of which, I hear 1,000 disgruntled RBS investment bankers are threatening to leave the country in response to the government’s clampdown on bonuses. In light of RBS’ well documented difficulties over the past 24 months, does that qualify as a talent drain?
Stuart Wilkin writes for Insider.
Posted:
09/12/2009 16:20:24 by
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Squeeze the Last Penny Out of Your Business Premises
Some gloomy so and so said to me this morning that, statistically, more businesses go bump when the country is climbing out of recession than at any other time.
But in the UK we do have a bit of an advantage over our continental colleagues, or at least a reprieve, as it has been gleefully trumpeted in the business press this week that we’re recovering more slowly than the rest of Europe. France and Germany I can understand, but Macedonia, for goodness sake! Anyhow, while everyone else partake in a frenetic scrabble for cash we can at least enjoy our turkey and sprouts safe in the knowledge that we’re still in the mire.
I must be careful who I listen to – I’m starting to sound like the lovechild of Paxman and Jack Dee.
Anyhow, assuming the present bust is followed by another boom of sorts; actually I prefer slump and rally, let’s get ready for the upturn and make sure that we’re not one of my moribund friend’s statistics.
The biggest expense, for a business or indeed an individual, is often in property. And while this is a buyers market for both, canny tenants are seeing how they can make the most of their current premises before leaping headlong into the market for a move.
So here are the top seven tips I have collected to help you make the most of your rental property.
1. Consider refurbishing your accommodation as an alternative to relocation. Your landlord will be keen to encourage you to stay and be open to discussions on meeting part of the cost.
2. Have a robust plan for maintenance over the term of your lease to avoid major disrepair and a surprise with unnecessary cost.
3. You may be able to obtain rates relief on vacant space. Review the Rateable Value of your premises, and an appeal could reduce your bill.
4. An imminent lease expiry presents an opportunity to negotiate improved terms to remain in the building.
5. Your landlord would like to remove break options and extend your lease term. If that’s right for your business negotiate a cash payment in return.
6. If you have spare space, consider subletting to offset your rent and rate liability.
7. And keep looking for ways to reduce your energy consumption and therefore your running costs, such as replacement of old or inefficient plant and machinery or improvements in insulation of the building fabric.
While there is a growing feeling that we may be over the worst, nobody will tell you that cash is going to be in abundant flow in 2010.
I know we’re not quite at Christmas just yet but I’d like to think there’s a little bit of Ebenezer Scrooge in all of us.
Stuart Wilkin writes for Insider
www.insidermedia.com
Posted:
19/11/2009 11:13:05 by
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There’s a lot of talk in the business media about the shape of the recession, and whether we’re actually over the worst. Last January, Baroness Vadera, business minister and an ally of Gordon Brown, saw the first green shoots of recovery and was universally ridiculed. I’ve always thought that looking on the bright side is usually a good thing, but communicating your ill judged hopes to a nation gripped by the most ferocious economic downturn in 80 years, makes you look rather like Julie Andrews haphazardly skipping across a meadow in the direction of a German Panzer tank.
Nine months later and the Baroness is no longer alone. We can’t quite smell the edelweiss but, and say it quietly, deals are being done. So is the recession going to be an ‘L’ or a ‘W’. Don’t listen to anyone who says it’s going to be a ‘V’. I subscribe to the ‘bath - shaped’ idea.
There’s undoubtedly more pain to come, but we need to start thinking about the future more positively. Cash management has been the mantra for the last year and a quarter now and it still holds true. But businesses that are tempted to protect their balance sheets to the exclusion of all else are in danger of missing an opportunity.
If you see a chance to grow or develop new business what’s stopping you? Probably a bit of a silly question when cash seems as scarce as ever. But things are starting to move. It’s easy to blame the banks for all our ills but they aren’t entirely at fault for the sluggish progress of the government’s loan initiatives.
The Enterprise Finance Guarantee with £1.3bn earmarked was announced last November. The scheme provides loans of up to £1m, 75% of which is underwritten by the state. But the banks didn’t like them at first. Probably because the rule book didn’t come out until early spring!
Similarly, the Capital for Enterprise Fund, which gives loans of 50k upwards, was trumpeted eighteen months ago, and I believe the rule book has now finally arrived.
The ethical banks have weathered the storm, largely thanks to their prudent pre-recession approach. So there are places to go for a business with a robust strategy and a well presented business plan.
But as with all approaches to lenders, in whatever climate, an idea on the back of a fag packet will not hold any water. If you’re going to take the time to meet with a bank, take the time to prepare.
And for goodness sake, don’t pretend the recession is already over.
Stuart Wilkin writes for Insider www.insidermedia.com
Posted:
08/10/2009 11:42:38 by
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Do you remember before last year’s banking crisis, when times were good? Cash was flowing, dealmakers were calculating their bonuses and the sun was shining. The sun was shining metaphorically speaking of course because the last time I remember actually wearing sunglasses in the UK was New Years Day 2005.
But that didn’t stop us all from worrying about the frightening onset of global warming and the imminent demise of polar bears and bumble bees. It was only when the fiscal poo hit the fan in 2008 that it didn’t actually seem to be quite as big a deal as it was before. I blame the media.
Suddenly it seemed that planting trees and not flushing the toilet had taken a back seat, as business owners fought hard to protect cash deposits, safeguard jobs and stave off liquidation.
And as if we didn’t have enough on our plate, the introduction of the Climate Change Bill last November applied a little more heat to business owners.
The government’s stated objective for the UK to cut CO2 emissions by 80 per cent by 2050 seems daunting if a little distant. But businesses are visibly in the spotlight. Owners are expected to improve the energy efficiency of their buildings, and sooner rather than later.
But there is a point to this. And in truth, by concentrating on green improvements, you can enhance your business’ image; increase your network, cut costs and source finance.
By making it known that your business considers environmental issues as important you will probably attract customers with environmental concerns and impress employees and investors.
You need to have a robust energy strategy and to focus on metering, monitoring and raising staff awareness. For instance the use of well timed meters and appropriate technology will reduce lighting costs and improve lighting quality.
And cost savings in heating are easily achievable by upgrading faltering boilers, improving insulation and formalising maintenance schedules.
In a campaign fronted by Dragon Theo Paphitis the Carbon Trust offers attractive terms for loans which allow companies to install renewable energy equipment, such as solar heating, biomass boilers or ground source heat pumps.
The Government's Enhanced Capital Allowance scheme is another programme which works to encourage businesses to invest in low-carbon, energy-saving equipment. Open to any company operating in the UK, the allowance lets the full cost of an energy-saving investment be written off against the taxable profits.
So even if you don’t really care that much about the Mexican long – nosed bat there are plenty of reasons to pretend you do.
And by the way, shame on you.
Stuart Wilkin writes for Insider www.insidermedia.com.
Posted:
29/09/2009 14:50:31 by
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Blog titles like this can sometimes attract bewildered adolescents and Carry On fans looking for links to a different genre of sites altogether. Imagine their frustration when they frantically stumble onto an accountant’s website!
So best to say at this stage that if you’re happy to be here I’m going to talk about asset based lending. And if you’re not, pull yourself together and go and do your homework.
The misdirected visitors to this blog aren’t the only ones sweating at the moment. While there is anecdotal evidence that some areas of the economy are showing the first signs of recovery, we are still fearful of false dawns. Banks haven’t yet regained the trust of businesses, and there is little evidence to suggest that the much publicised state support has found its way to its suggested target.
So it may be time to look for finance from a lender who will use your debtors or plant and machinery as security. Commercial property prices have plummeted over the last three years but the one asset that doesn’t deflate is the value of your book debts, the mainstay of asset based lending.
There are some imaginative products which provide stock funding. And it’s likely that other products will emerge as competition increases.
Other lenders are increasingly standing in the banks’ shoes but you must be realistic in what you can expect to achieve.
The asset based lending market has always been fairly prudent. They look at risk differently to banks. ABL lenders have a keen eye on the value of their security and they are being a little more cautious than they were eighteen months ago.
As the mainstream banks have shown little sign of relaxing they have pushed a lot of smaller customers down the ABL route. But if this is an area you want to look at, go out to the independent market to find the best deal. Few lenders will be pushing prices down at the moment, but the competitive nature of the market means that increases won’t be exaggerated.
Stuart Wilkin writes for Insider www.insidermedia.com
Posted:
24/09/2009 12:23:28 by
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When the government’s swine flu hotline opened in July the centre was inundated with 100,000 new cases and clearly the pandemic had reached our shores. Thankfully the following week only a third of that number had been stricken, or had the strength to call. Or maybe the case was that all the sickly people who wanted to stockpile Tamiflu had already been satisfied by the accommodating call centre guys.
Either way, for business owners it’s nigh on impossible to know whether your people are genuinely afflicted or simply caught up in the national hysteria, or fancy a week off work. And there’s the problem.
Last month the Oxford Economics Think Tank warned that a six month pandemic in the UK could cost our economy £60bn. And the damage will be felt more acutely by small businesses. Of course if your employee really has the lurgy then you don’t want him in the office coughing on your three bean salad.
I have unreserved sympathy for anyone who has swine flu, rhino flu or any other kind of flu for that matter. But I have unreserved disdain for anyone who says they have, when they haven’t. Which is probably why I’m not an employer.
But instead of investing time and money in producing internally devised cost tracking systems, or absence reporting services, it might be worth spending a few minutes pondering this:
Why do employees swing the lead? We can rule out sunbathing. Once in a blue moon it might be when the England cricket team is threatening to win the Ashes. But there is usually an underlying answer, which is one of two:
- Your business is not a happy working environment, or
- You have recruited the wrong people.
Haven’t you noticed that when your best and most committed employee is fighting the advanced stages of pneumonia you can’t push them away from their workstation with a cattle prod? But an unnoticeable sniffle will prompt a flurry of sick notes from the work shy.
At times like these it’s worth making sure your team is still happy, and not by sending out a staff engagement survey. Have you got it right in terms of:
- Positive transparent communication
- Empowerment
- Recognition and celebrating success
- Valuing your people
A close knit team that understands and believes in your company’s goals will withstand any viral or economic attack with more vigour.
And if you have the perfect environment and are still wondering why you have a worker who has already guzzled twenty packs of Tamiflu – you might take a bit more care on your next recruitment campaign because it will take fifteen years to sack them.
Stuart Wilkin writes for Insider
www.insidermedia.com
Posted:
12/08/2009 21:11:01 by
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Well it doesn’t seem like two minutes since the much loved Ronaldo headed off to sunnier and wealthier climes to fulfil his childhood dream. And John Terry resisted the vulgar lure of a wheelbarrow of wonga to snub Manchester and stay in the City. Don’t be fooled though, it was probably the rain that put him off.
And now, thank goodness, the new Premier League season is about to begin all over again. We can all breathe a sigh of relief; stretch our newly bought replica shirts over our barbeque stuffed frames and head off to spend ten per cent of our weekly income watching our heroes lose. And when they do lose, we upset ourselves with the whim that ten per cent of our one-footed striker’s weekly wage could keep us in beer until 2075.
And so this is how the freakenomics of football works. Gone are the days when we could sit behind our club captain on the bus on the way to the game. These days if you so much as look at his helicopter you’ll be tazered by his entourage of baboons.
For years now we have been asking how long could this all carry on? When will the bubble burst? Once proud clubs like Leeds and Southampton’s fall from grace has been accelerated by financial gaffes. And should the unthinkable happen and Sky suffered a corporate wobble, what implications would there be for us all. The collapse of Setanta has crippled Scottish football.
But nobody cares at Manchester City where they carry on spending entirely oblivious to the recession. In the last twelve months they have enthusiastically spent just over £200m on transfer fees, committing a further £300m in wages.
And across the road the paupers at Old Trafford can take comfort in the truly global attraction of their brand.
Even Burnley is sexy now. The Lancashire mill town more recently associated with the BNP and drug addiction levels is now home to everyone’s ‘second team’. I’m sure Burnley has already hit the radar in Abu Dhabi, but can they really expect to prosper in a league awash with cash by advertising a policy of bringing in young and hungry players who think of football first, contracts later and Dom Perignon only when they’ve won a trophy?
For the good of football let’s hope so.
And now the book plug:
Brendan Flood, operations director at Burnley F.C. has penned his diary of the epic tale of the club’s rise to the Premier League. Big Club, Small Town and Me, is due out this week – rrp £9.99.
If you want to know how football clubs can progress while watching the pennies, order your copy online by emailing
stuart@thmedia.co.uk.
It isn’t really suitable reading for Blackburn fans.
Stuart Wilkin writes for Insider
www.insidermedia.com
Posted:
12/08/2009 21:00:15 by
Stuart Wilkin | with
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This week the Nationwide has reported that house prices have risen for three consecutive months. And there is more glee on the Stock Market which surged extremely close to its highest point for a year, encouraged by some better than expected corporate figures.
Rolls Royce has turned in good results and BSkyB reported a very strong finish with pleasing customer growth in the last three months to June. And the drug makers at Astra Zeneca have breathed a collective sigh of relief on discovering that swine flu was not, in fact, a government prompted diversionary tactic as some of us cynics suggested. So, on the back of a half year pre-tax profit of $5.6bn they can now make hay, as hay fever is the least of our snot engulfed worries.
But not everyone is ready to join the ‘Green Shoot Gang’. Moody’s ratings agency has downgraded its forecasts for the year, estimating that the UK economy will shrink by 4.4% by December. And the Centre for Economic and Business Research has issued the sobering prediction that, if we embark on a double dip recession, then unemployment figures will reach 3.8m within two years.
Forecasting the economy is not always easy, and experts’ advice often conflicts while modest investors look for a clear light to follow. For sure there are cycles, but we all crave clarity of guidance. Which brings me to Vince Cable, the Liberal Democrats shadow chancellor, the sensible voice amidst the blancmange of accusations and recovery plans that has characterised economic debate in the Commons over the past twelve months. The Right Honourable member for Twickenham knew that the economic Tsunami was on the way before 2007. In that alone he was not unique - but he said it. We just didn’t hear (no political motive in this blog).
Forecasting the weather is much harder than making sound fiscal predictions. But again, it is clarity and a realistic message that we want. The boffins at the Met Office, I’m sure, are the best in the business but they don’t understand that saying ‘there is a 65% chance of a warmer than normal summer’, will be translated by the media as: ‘IT’S GOING TO BE HOT, HOT, HOT – RUN TO THE BEACH EVERYONE!”
Not only does Dr Cable have a brilliant economic brain combined with a common sense style, he’s also media savvy. So my guess is that if he’d been in charge of the London Weather Centre in May, I wouldn’t have rushed out and wasted lots of cash buying sun screen and bbq briquettes!
So he gets my vote, at least for running the met office. And if he is too busy why not let a journalist have a go:
In 2010 we will see a week and a half of sunshine in May probably followed by a predominantly wet summer with temperatures hovering around the seasonal average i.e. cold.
You heard it here first.
Stuart Wilkin writes for Insider
Posted:
01/08/2009 17:03:10 by
Stuart Wilkin | with
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A stark reality hit the business community at the beginning of 2009 when the Federation of Small Businesses reported that 50 companies were closing every day. And the most depressing statistic within this headline was that six of them were pubs!
So should these harsh conditions deter entrepreneurs from pursuing their dreams? Should you start your business now, or stick with the security of your salaried job? To be fair, that question is no longer a burden for the weekly thousands of newly unemployed who form part of another grim statistic.
And while I’m at it, up to 75 per cent of new business start ups will close within three years.
Okay that’s it. Enough of the gloom and doom. Let’s start again.
Over a quarter of new business start ups succeed and thrive. So that means that you are three and a half million times more likely to operate a successful business than to win the lottery.
There are winners and losers in every market and never more so than in a downturn. When cash is in short supply, consumers look for value or ways of saving money. So it’s no surprise that, towards the end of last year, businesses like Aldi and Dominos Pizza reported strong figures. And in difficult times products that can satisfy emotional needs often do well. During the 1991 recession sales of Haagen Dazs ice cream soared. It was a luxury that didn’t cost much.
And surely you know if an idea is stupid. Who of us can honestly say we’ve never watched a floundering, sweating ‘entrepreneur’ on Dragons Den without thinking ‘what an idiot?’ I’ve even taken to peering disdainfully at the TV and muttering, in my best Glaswegian drawl, ‘I’m out.’ My personal favourite was the guy who came up with Safespring – a device to stop gravestones from falling over.
In the eighties we all knew that selling water in bottles wouldn’t catch on, we weren’t that gullible! And ten years earlier, opening a vegetarian restaurant more than a bean’s throw from Notting Hill would have been silly. Come to think of it there still isn’t one in Burnley! Please don’t interpret that as a gap in the market. It isn’t.
If you can thrive in a recession just imaging the opportunities for your business when the gloom lifts.
But before you take your idea or your redundancy package and begin to turn it into your new enterprise, take advice from people who can guide you – existing business owners who can warn of the pitfalls and accounting professionals who can help you to form your strategy and maximise your profit. If you don’t want to do that, just give your money to me and I’ll use it wisely.
And remember – Cash is King. As every banker will tell you - there’s no future for any business that succumbs to greed by gambling on higher risk products and rewarding its sales people and directors with enormous bonuses. Now that would be daft.
Stuart Wilkin writes for Insider
www.insidermedia.com
Posted:
25/07/2009 10:15:50 by
Stuart Wilkin | with
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When British Airways asked its 40,000 staff to work unpaid, by yesterday only 800 had accepted the unwelcome invitation. I don’t know if the 800 included Willie Walsh, BA’s chief executive, who agreed to forego his £62k – but whether it’s 799 or 800 - I’m not going to split hairs.
At least five per cent of BA’s employees have read the signs - the most obvious of which was the £401m annual loss posted in March this year. And a further 6,000 workers have signed up to one of the company’s euphemistically labelled ‘cost-saving schemes’ to plug the gap partially left by the executives who have been dragged kicking and screaming out of their seats in business class - to join the rest of us listening to the baby screaming and kicking in economy.
And yesterday, in the criminally insane world of football, Southampton was the latest club to give its staff unpleasant news on payday. But again, this was hardly surprising as the football club’s holding company, Southampton Leisure Holdings, went into administration in May.
In this new reality (PR speak for recession) we find ourselves in we are going to have to make tough decisions for some time to come. Whether the new reality is ‘L’ or ‘W’ shaped there will doubtless be more bloodshed. But the businesses that prosper will invariably strengthen on the back of committed and motivated people.
But cutting salary costs without putting the wind up your employees needs to be carefully executed.
- Start early. You need to manage your money on a daily basis, but understand your cash flow for the next twelve months.
- Communicate your plans to your people with transparency and honesty. They will stay loyal and motivated if you discuss their contribution to the company’s sustainability before they read about the business in the press, or take a call from an angry creditor.
- In a unionised environment engage with the union representatives in meaningful consultation.
- Have a clear strategy to ride out the storm, and always with a plan B.
And if you get to the stage where you’re asking people to work for nothing, it might just be too late. Goodwill is one thing, expecting your workers to forage for berries is quite another.
….. And speaking of frugality - was anyone else tutting at those cheeky scamps at RBS scoffing £300k worth of (our) strawberries and champagne in the hospitality suites at Wimbledon this week? A spokesman for the belligerent bankers said that the corporate jolly was for customers not staff – and anyway it was a contract that they couldn’t get out of …. yeah right.
I thought selling a deal on at a discount, or collapsing it and taking a loss was standard banking practice these days. Silly me.
Posted:
26/06/2009 11:59:50 by
Stuart Wilkin | with
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I must admit that I haven’t read Shepherd Mead’s 1952 book, ‘How to succeed in business without really trying’. I can’t help thinking that he was either too young to remember the Great Depression of the 1930s or that he’d inherited a brewery the day before prohibition was abolished, or maybe it was a parody.
Either way, the title of the book doesn’t really tempt me to read it. In contrast, somebody else once said that if you don’t have to work hard for something it’s probably not worth anything. I suppose that’s why the endless stream of talent show contestants on TV feel obliged to tearfully implore that they’ve ‘worked so hard’ (presumably by wailing into a hairbrush in front of the bedroom mirror since the age of thirteen).
The truth of the matter is that business is tough - and particularly so at times like these. But simply working hard in a downturn isn’t a guarantee of survival. You also need to analyse every single aspect of your business to extract maximum value from your efforts. Businesses that survive and strengthen during a recession are those that have learnt from the experience and adapted.
At Axis we have gained a lot of experience and knowledge of what our clients are going through, and how many of them are working differently to guarantee sustainability.
And we are supporting businesses by reviewing their internal systems - streamlining and discussing ways that they can reduce costs, whether in areas such as telephony and broadband or the more traditional tax arena. Business owners need to be aware what the best of their competitors are doing; and by benchmarking their own performance against the industry they can form a progressive strategy.
The banking sector has achieved enough column inches, but while the banks continue to shore up their own balance sheets we must find ways of protecting ourselves from the fallout of their tribulations. Two-month old cash flow forecasts won’t hold any water with the banks; they need to be right up to date. And they must be as accurate as humanly possible, subject to the vagaries of the market. Gone are the days that a two month slippage in cash flow figures would receive a helpful flex from the bank. You’re more likely to be met by, ‘It says here that you don’t need an overdraft now’.
And we need to guard our own cash with the same ferocity. If I had a pound for every time I’ve advised clients to credit check their debtors I would have had shares in Experian. But now everyone’s doing it, in the knowledge that a big bad debt can have a nightmarish domino effect – and the banks know that more than most.
Good debts are covering bad debts at the moment, but surely the credit control approach that we are adopting now would stand us in good stead when things improve.
And they will improve. But we can’t expect it to be next week or even next month. Some businesses are hibernating in the hope that they’ll still be here when it’s all over. But others can see the opportunity to inwardly strengthen, firstly to defend the imposing threat, and then to be in a position to attack when the sun starts to shine.
The strongest companies are led by calm directors who have confidence in their ability to make the right decisions.
And it’s only a guess, but I don’t think many of them will have read Shepherd Mead’s book. Maybe I should pick a copy up.
Posted:
15/06/2009 09:22:54 by
Stuart Wilkin | with
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Over the weekend I’ve been troubled by a philosophical question – is it preferable for our politicians to be dishonest or incompetent? In an ideal world it would be better for them to be neither, but sadly those are not the days we are living in.
There has always been a suspicion that too many of our elected representatives weren’t to be trusted, but more from experience of broken promises than allegations that they’ve been pilfering our hard earned cash.
Rik Mayall’s brilliant creation Alan B’stard has begun to look worryingly believable over the past week. But in a departure from B’stard’s clinical destruction of his accusers, the fashionable defence these days seems to be that MPs have got their personal finances in a pickle because they are impressively stupid.
For an MP to claim £16,000 to cover mortgage interest on a loan that has been repaid is an oversight on a gargantuan scale. But accounts do get muddled when you’re busy – and, hey, it’ll never happen again. Until the day after. And amazingly the next overworked bleeding heart who had claimed for interest on a repaid mortgage did so by mistake as well!
Now I don’t class myself as a gullible idiot, but I have for many years broadly believed what politicians told me, particularly on legal matters. A few years ago I was convinced that the homicidal Iraqis could deploy a missile within 45 minutes that would hone in on my garden and wipe out my begonias. So much so that I covered my garden shed with silver foil and filled it with cans of baked beans and corned beef. Boy, did I feel silly?
But let’s just assume for a moment that these oversights were actually innocent errors. I must say, in that case, I’m not entirely comfortable with the idea that our elected representatives are so stinking rich that they wouldn’t query an erroneous five figure sum dripping into their bank account, or forget that they’d repaid the relevant loan, until the Daily Telegraph ran a story on it. Obscene wealth combined with financial ignorance isn’t an attractive proposition for the electorate.
And you’d think that claiming £800 a month for food would not only raise eyebrows in the fees office - but more menacingly would prompt a knock on the door from the Department of Health’s obesity police.
The highlight of the week for me was Margaret Beckett, in a hilariously stupefying onslaught on Question Time, accusing the Telegraph of scattering the personal data (including bank details) of MPs, and more importantly their unsung band of support workers, into the public domain. I wouldn’t worry about it too much Mrs B. The DVLA and HMRC did exactly that to twenty five million of us two years ago – but it was a mistake.
So back to my original dilemma. We certainly don’t want heads of state that are both dishonest and incompetent. It might be fun but we can’t seriously entertain the thought of housing Dick Dastardly and Muttley at numbers 10 and 11. Having said that - at least they’d have an enthusiastic stab at clearing some of the pigeons from Trafalgar Square.
So no, we don’t want incompetence or dishonesty. And thank goodness we can believe that we have hundreds of MPs who are neither. So I suppose in the end I’ve come to the conclusion that there are just too many of them.
Stuart Wilkin writes for Insider
www.insidermedia.com
Posted:
18/05/2009 09:50:07 by
Stuart Wilkin | with
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Spare a thought for your poor old bank manager, and try to think of something nice that you can do for him - because let's face it, he's probably been a bit down in the dumps lately. What was once a job for life occupied by a respected community pillar, is now treated with the same disdain as the poo on your shoe. The bank director now has the status of an estate agent; Captain Mainwaring has become Rigsby, and it's not altogether fair.
But if you'd rather cuddle a skunk and you think I've lost my grip on reality ask yourself this: Who was it that developed the global strategies to sell inappropriate mortgages to customers who couldn't afford to repay them? Who bundled the high risk debts to sell them on? Who brokered the deal for one bank to take over another bank without completing fully adequate due diligence? Well it wasn't Captain Mainwaring that's for sure. But now it's down to businesses and bank managers to sort the whole mess out.
When a furious Gordon Brown, with the dark countenance of a Presbyterian schoolmaster, shouted at the banks, insisting that they lend us our money back, they still had their fingers crossed behind their backs - even those that were being nationalised. But the business banking managers on the front line, the good ones, were just as angry as us. And now, I hear, there are signs that the money is starting to trickle through. The Department of Business, Enterprise and Regulatory Reform has announced that so far over 2,000 Enterprise Finance Guarantee loans have been granted to small businesses.
The scheme, whereby 75 per cent of the debt is guaranteed by the government, was designed to help businesses who had a good business plan but inadequate security, to raise finance. Initially the banks were reluctant to participate, but that might be changing.
And the business community can help by making the bank manager's job easier. Gone are the days where a plan on the back of a fag packet and a bottle of whisky for the manager were enough. You need to help the bank manager to appease his credit committee. Understand your business; know the detail; research your market, know your competitors, use the financial ratios that can help you to improve your profits. And, for a while anyway, become obsessive about credit control. A well thought out and well presented business plan will help you as well as the bank.
And the poor blighters need a lift. They've even stopped spending the fees we cheerfully pay to them on ski trips and champagne fests, or so it seems. Which predictably brings me on to the other section of society that have become celebrated for their enthusiasm in spending our money on themselves. I do wish all this fuss about the MPs expenses would die down.
For goodness sake, how can we expect our elected representatives to function properly without two roofs over their heads, an executive cleaner, manure, women's' clothes and a plentiful supply of kitkats? I was going to ask the tax specialist at Axis if I could put the receipt for the two Swedish documentary DVD's my 'friend' rented through my business, but I thought better of it.
We must remember that it's very easy to mock politicians when they're trying so hard to run the country and tell us how we can live better, only to find that they've been found out. And it can be a lot of fun too.
But they're not going to lend us the money to support our business. So let's ignore them for the moment and rebuild our relationships with the chaps who can. Smile at a banker today, and if he starts crying just run away!
Posted:
12/05/2009 10:09:42 by
Stuart Wilkin | with
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I wonder how long it took the marketing luvvies at Downing Street to come up with that uplifting Budget logo - 'Building Britain's Future.' To be fair It's not all that bad really - short, progressive and it involves masonry of some type. I'm just glad they didn't resurrect TB's 1997 campaign song,'Things Can Only Get Better ' otherwise Mrs Wilkin would have had an extra pair of pants to wash this week.
Alistair Darling's best attempt at good news in telling us that we would be basking in the warmth of 3.5% growth by 2011, was swiftly rubbished by those spoilsports from the opposition parties, the fiscal heavyweights Vince Cable of the Lib Dems, and Ken Clarke, who both hinted that the projections could have been the work of JK Rowling.
So what did the embattled Chancellor do for us in the business community? None of it was worthy of a headline, or even a page leader, but there were little snippets and a frisson of cheer:
- There is a temporary increase in First Year Capital Allowances from 20% to 40% for expenditure over and above the annual investment allowance on plant and machinery.
- HMRC's Business Payment Support Service is being expanded. Businesses may be able to use projected losses in 2009/2010 to offset against upcoming corporation and income tax bills.
- The VAT registration threshold is up to £68k.
But sadly none of this raised a smile when a BBC News 24 journalist spoke to a group of consumers and business owners in Derby. Not one of the hapless interviewees could find anything to be pleased about after all the Chancellor's best efforts.
Well I can. It seems to me that the new 50% tax on the grafters earning over £150k has caused a bit of a stir. So much so that many high earners, noticeably Sir Michael Caine and Peter Hargreaves, the co founder of Hargreaves Lansdown, Britain's biggest firm of financial advisers, are threatening to abandon our shores, presumably for Switzerland.
Now that in itself isn't good news - but just think of the possibilities. Cheer yourself up by making a list of the most irritating reality TV people, footballers and council officials and then hang on to the possibility of them leaving the country!
I feel better already. I think I'll go and scrap my car.
Stuart Wilkin writes for Insider
www.insidermedia.com
Posted:
29/04/2009 20:06:20 by
Stuart Wilkin | with
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Has anybody else noticed that the busiest department in your company is the Human Resources team?
It’s coming to something when you haven’t been able to find anyone to review your personal development plan for the last six months. And now the three-week residential diversity course that you were so looking forward to has been cancelled.
The truth of it is, after spending years thinking of mind boggling ways to help you confuse your identity in a ‘right on’ style the BBC would be proud of, the lovely HR people are finally working their trolleys off.
That’s what happens in a recession. Everyone’s busy doing the things that really make a difference to make sure your business is still here in 2010. And, at last, HR has been welcomed to the inner circle.
If hiring and firing really was as easy and as much of a wheeze as Sir Alan Sugar makes it look – we’d all do it for ourselves. But shouting, ‘You’re fired’ at a gaggle of punchable wannabes whose egos appear to be as colossal as their collective talent is puny won’t qualify you as a Human Resources guru – shame though that is.
And no matter how small your business, you have to take it seriously. Screwing up on a piece of HR legislation is as big a risk to your business now as turning up on the first tee wearing bermuda shorts used to be.
But surely at times like these we can rely on the government to help small businesses by slowing the pace of HR legislation just for a while. What do you think?
Since the beginning of this month:
- Minimum paid holidays have increased to 5.6 weeks and must be correctly calculated for key workers (part-time staff to you and me).
- Parents with children under 16 can request flexible working patterns (previously 6).
- A brand new ACAS code of practice has replaced the previous grievance and discipline standards applicable to all businesses.
If you’re a big business you need to make sure that your HR team is on the ball. If you’re a small business you need to ask for help. Or subscribe to Personnel Today, study for a degree in contract law and buy a decade’s supply of coffee.
Let’s get through this without going bust, and remember – ‘The Apprentice’ isn’t real, it's only make-believe.
Stuart Wilkin writes for Insider.
www.insidermedia.com
Posted:
08/04/2009 09:51:06 by
Stuart Wilkin | with
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This April, 2009, we've launched our new website. Not only that but we've launched the Axis blog where we'll keep all of our customers up to date on what's going on in the financial world and with Axis Corporate Solutions.
Why not get involved and tell us what you think about our new website, we'd love to hear! Just add a comment below.
Posted:
01/04/2009 14:52:13 by
Kris Clayton | with
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