01 02 2013
According to the Accountant’s I’ve spoken with, HMRC’s deadline for self-assessment gets the papers flying around quicker than a pile of leaves covering a hedgehog who’s spotted its first slug in 6 months, for those well-meaning businesses with a late-starter attitude in discovering the difference between paper shuffling and paper moving. It seems for some it’s the schedules, for others its spreadsheets and for others it’s general paperwork that’s their Achilles heel lurking amongst the well meaning ‘to do’ files and piles (that masks the stresses and compounds the disorganised). But ‘papers’ will be heard rustling beyond the busy season (31st January) deadline, as the VAT returns, tax liability payments, PAYE and capital gains tax continue for the micro and small business, alongside notifications to Companies House and preparation for RTI – the electronic PAYE returns to HMRC.
A large proportion of some businesses outgoings are business rates to which Small Business Rate Relief (Non-Domestic Rating Amendment Order 2013) comes into force on 11 February. There are no changes to eligibility criteria but the temporary increase in the level of rate relief is extended to 31 March 2014. Business occupying premises with a rateable value of not more than £6,000 are provided with 100% relief; with decreases between £6,001 and £12,000…. the benefit MUST be applied for. Properties that fall beyond the £12,000 limit (think about small businesses under stress and trying to keep a grip or businesses looking to expand) – the cap doesn’t apply.
Also 11 February, the first Business Planning Week, which could be ironically titled for existing businesses, weighted down with commitments but also available for start-ups wanting to look to business planning templates until 17 February.
Image and Article credit: Copyright SUF 2013
Welcome Back! We’ve Been Expecting You!
It starts off good and then gets better. I could be talking about life, a relationship, business or any combination of the three; each one can affect the other …..and none more so apparent than in my latest meeting with an old friend.
We go back a long time but he’s showing little wear-and-tear of his middling years, which I mention because he’s a fortunate man who’s taken more than average knocks. The people he relies upon, also older than the franchise he’s involved with, stayed around when he took early retirement. Although he’s a gizmo-gadget fanatic he walked away from his responsibilities, until …. how should I put this?…. things went up in flames…. and shaken (but not stirred) he was kicked into a realisation of what he was about to lose.
Data was the key to him dusting himself down.
Taking an overview of a situation is the ideal course before making any decision, and using an observation with exclusion to pre-conceived ideas; in other words, objective evaluation adds a dimension to the decision. Data becomes important. Add the element of quantitative information, the USB stick is enhanced and the hard-drive can soon contain information which alters the significance of decision making. It doesn’t always have to be life-changing decisions that are being considered. But the data is the measurement that, kept in a detached, measured way, can be game-changing for the smaller enterprise.
Moving away from familiar, comfortable ways, to detached spreadsheet-thinking can be a bold challenge.
My friend, previous to his return, thrived on detachment, but being subjective and based upon our experiences he’d evaluated what he had to lose and returned, remaining detached but with a serious edge. In turn, others evaluated from their experience what they had to lose or gain from his return, with the outcome being that both needed the data – the qualitative nature of it was recognised – it held important information.
Why would a business shift its way of working, use data collection, when everything there is to know can be relayed verbally?
Business news and articles are frequently based upon indicators – especially those circumnavigating the economy – inflation is seen jumping or falling around The Office of National Statistics figures, GDP and The Bank of England gives out growth and flat figures. The Council of Mortgage Lenders, Insolvency Service, Commercial Banking Research, Building Trends and NOMIS, offer up reports, figures and surveys and most currently prove little that the business owner doesn’t already know. They do what they say on the tin, they’re used as a forecasting method; they’re indicators…. not crystal balls.
My friend’s franchise evaluated the situation using data, before he was pulled out of retirement, they understood the indicators and decided whether they could make or break the business.
Evaluating the performance and ability of any business, by monitoring and tracking, no matter how basic, is an essential benefit for leveraging a probability of its success. Anything is better than nothing, applied detailed or sparingly, informal or formal, the information will demonstrate a result which justifies the effort.
Continual changes occur which affect planning, therefore potentially the business model itself, when, as part of business practice, objective observation is contributed, the qualitative indicator can be interpreted and applied for direct decisions i.e. financial or indirect i.e. realising shortfalls. The indicator might be that it’s time to get back to work which can be, as my friend said, ‘a pleasure’.
How customers, clients and staff evaluate a business is their business, and how a business evaluates itself can be a hair-raising business because no-one can be certain of the future….. but…. in business, to guide decisions in getting there, objective evaluation is a fundamental element.
As for my friend James, his latest adventure had its flaws. Hopefully, he’ll go on to further adventures because – to quote his tag – Nobody Does It Better.
Image and Article: Copyright SUF 2013
01 01 2013
How does a business obtain a loan under a bank’s normal lending criteria when they don’t have the required security? …..Via the Enterprise Finance Guarantee Scheme? The EFG lending figures have been published and show, for financial year 2012/13 a total of 1,834 loans being drawn down from the 50 lenders, amounting to a total of £201,903 advanced……
Are lenders and banks too risk-averse? Or, are smaller enterprises not interested in investing in their business in this changed climate? Banks and lenders have adjusted their risk assessments – it’s not news that they aren’t an easy access to finance – however, credible sources of affordable finance are available but the chosen route, whether a bank or alternative lender, require a current mutual understanding of each other, as well as the risks associated; only then can the lender and business manifest themselves for potential in meeting each other’s needs.
Not for short term cash injection, the Business Finance Partnership initiative is aimed at cutting borrowing costs for smaller companies. Selected partners have invested with the government for lending to businesses with up to £500m turnover, although Vince Cable’s business department has access to about £100m which is being advanced to non-bank sources i.e. peer-to-peer lenders who offer short term finance, the same as similar competitors to the market, crowdfunders.
The Autumn Statement increased Capital Allowances, from 1st January 2013, from £25,000 to £250,000 to encourage investment in plant and machinery. What is a Capital Allowance? In simple terms, it’s a qualified amount that Companies may deduct from their taxable income. The Annual Investment Allowance increase is a ‘pro-growth’ measure.
Don’t forget 31 January is the last day to file 2012 Self Assessment tax returns online - any balance of Self Assessment tax owing for 2011-2012 should be settled on time.
Image and Article credit: Copyright SUF 2013
04 12 2012
The Answer Is Out There – It’s The Question That Brought You Here: Financing Business Matrix
Little wonder the micro and small business owner can feel their brain turning as cavernous as an empty warehouse, when they hear the stable interview question: where do you see yourself in 3-5 years? An unsurprising response because looking at what-if moments is heavy going, with few in smaller business having the luxury of time or situation. It’s adversity that injects us with a drive to sit up and take notice.
What-if moments are unattended areas – some abandoned altogether – until, an event or circumstance occurs which has potentially damaging effect.
The shock of the situation’s potential consequences can be enough to triggers a reaction – usually played out with some matrix-type wall running and freeze frame time effects movements – forcing the situation to be considered relevant for attention. The impulse is to want to understand the consequences of the complicated that wasn’t on the taken easy route: Why? … and… How? … and How? … and Why?
For example, as a consequence of banks ‘reshuffling’ their capital the trend is for overdrafts to be called in (repayable on demand). Having defined their problem, the bank reclassifies the borrowings as part of their risk assessment to (sometimes) a bank loan, which for the borrower is usually a reclassification they don’t want – it doesn’t hold the same incentive of the overdraft i.e. the interest rate – it’s going to get complicated. Recognition of any complication, might be called in, had gone unnoticed in the first instance; overlooked for the less complicated preference. This took away an ability to speculate, hence, when ‘driven’ to an alternative financial product, opportunity can be missed again…. for as many times as ostracising behaviour is repeated.
And, the circumstances can also dictate the response that instigates a leaning towards uncomplicated. In the same example, inviting a view of being penalised for no wrongdoing, the annoying situation needs knee-jerk reaction, some stomping around, finished with some air hand-throwing and a resolved ‘what can I do?!’
Distinguishing between a problem and a challenge, the balanced approach, is discarded. There is no right or wrong question when defining a problem: the challenge is to use a combination of knowledge, experience and data as a ‘framework’ for considering what the basis of the problem is, in order to define the challenges: a problem is associated with conditions or situation whereas a challenge relates to the necessity of effort – problems are conflicts whilst challenges are the questions that break down a problem and can make a difference to the business numbers. Which, returning to the overdraft example, could mean a problem is considering what alternatives are available for the business’s circumstances, when a) that which could offer alternative has been prejudiced and side-stepped b) the preference for overdraft has become reliant upon, part of a routine and familiar. And, as most of us are creatures of habit, the challenge is altering a mindset to put the business owner back in control which can all appear too complicated without a translator, or when your mind-movie has you bent backwards dodging that slow-mo bullet.
In shock, judgement is unstable therefore it alludes to different question types, which consequently hold different answers which result in different courses of action. A reluctance to overcome innovation in the commercial financial arena has been further supported by ‘shocks’ it’s experienced, the resulting choices placed before its consumers are, in part, as result of the surrounding instability in this market driven area, which provides choices for its mechanisms benefit – not for customer benefit. Therefore, as a customer, to achieve any benefit, is dependent on understanding those choices available.
Actions can achieve objectives, however, because it’s only possible to predict to a certain extent, sometimes the best laid plans go askew. The positive/productive business practice is revisiting the business’ plan to revise areas that have become or considered becoming unstable. A shock holds implications. Any questions that follow are in context to those immediate affects; they will apply to the specific position or circumstances of that time and are, therefore, often of the knee-jerk reaction type. These have limited value compared to questions posed to prevent incident, made in preparation to avoid incident, or seek to limit damage of an incident.
Independence is perceived as a primary motivation for going into business. Fuelled by self-knowledge, understanding the processes of running the business smaller enterprise, owners and self-employed who are able to project where they’ll be in 3-5 years resonates an ability to project a partly abstract concept; without which a business becomes disadvantaged in a situation when resilience is essential.
Self assistance can be an investment for smaller businesses, however, when a route preference is made (in this case financial structure) which is dictated by blind consideration i.e. no safeguard advice has been taken, being in control is a misconception.
An approach which can, for some areas of business, be ambiguous and temporary because it underestimates the problems and challenges of the changing business and financial environment relative to the information matrix.
04 12 2012
Bank of England is to have a new Governor when Sir Mervyn King’s term ends (June 30). Mark Carney, currently Governor of the Bank of Canada, will be taking his post ‘at a crucial time in the Bank of England’s history’, as the first non-British national to lead the Bank.
The Autumn Statement may see forecasts of VAT being put up to 25%, further spending cuts, plus tax rises, as part of the brown/black announcements of the economy that run alongside the self-imposed targets for economic growth.
First time buyers’ priority is…. a garden, according to research carried out by Yorkshire Building Society. Regional differences applied to the priorities of the report which looked at living near family, transport, property maintenance, property size, potential first time buyers and actual first time buyers.
A wide ranging inquiry into the private rented sector is being reviewed by the Government and is to include the regulation of landlords and letting agents. Submissions looking into housing standards, rent control, fees, charges, tenancy agreements are to be made by January 2012.
BofE governor, Sir Mervyn King wants the proposals to be subject to a compulsory review after 5 years. `We are always being told that the Bank of England is far too powerful, this is another power I do not want to receive.’ RBS CEO Hester has claimed that High Street Banks ‘were less prone to collapse than investment banks’ and that ‘the biggest banking disasters have been simple banks’ therefore it would be ‘wrong to believe that it was dangerous to mix the cultures of investment banking and High Street or retail banking with the same institution’, whilst Lloyds’ CEO has compared retail banks to an army, due to their much hierarchical structure, and that ring-fence would make it easier for the government to deal with banks that went bust. Comments relative to the new banking ring-fence, designed to separate a bank’s core activities from its riskier investment banking, as recommended by the Independent Commission on Banking (Vickers) are expected to be implemented in 2019.
The City has congratulated itself on 20 years of UK corporate governance codes, which, since the Cadbury document (1992), 70 other countries having followed-on by adopting similar guidelines. That is 19 Best Practice principles for corporate governance; the role and structure of the board which are now called the UK Corporate Governance Code. The question is, has the code done its job?
A new study of male office workers claims that men who wear pink shirts earn an extra £1,000 than their counterparts, are better qualified, more confident and a greater number of compliments from their female colleagues, the green shirted are most likely to be late and white shirted are punctual. However, what the study didn’t tell us was….. how many mix their colours with their whites in the wash.
Image and Article credit: Copyright SUF 2012
20 11 2012
Being told economic prospects are Black or, at best Brown, had me puzzled for a second; thinking shady dealings equate to Black markets, is Brown marginally less shady….or was this confusing the Grey economy? All during a discussion which included the Green economy, although didn’t include the Blue economy nor mention the Golden economy; not to be mislead about money-trees turning Yellow, or Gold…..Although the Green stuff was mentioned, but there was no reference to Green money; the dialogue circumnavigated White money being in the Red or the Black, including the Pink pound and Blue chip with the potential for a Silver lining…..
Image and Article credit: Copyright SUF 2012
09 11 2012
“I would always say you should take Independent Advice when looking to take out a new mortgage, because the Independent Financial Adviser is not tied to any one provider and can provide advice from the whole of market including deals offered directly from Banks or Building Societies. An IFA or Independent Mortgage Broker will also conduct a full financial review to take into consideration all the areas of need in connection with the mortgage”.
Nothing too unusual about that declaration – other than its written by someone who less than 3 years ago was an employee working in a Bank as a Manager probably telling people…..
“As a bank we value your business and have solutions for you which will give you the appropriate mortgage that addresses your needs. Our advice will come up with the best deal for you to support your application, because we don’t just give out mortgages to anyone…… “
Image and Article credit: Copyright SUF
06 11 2012
Rising Froth: Assigning Value Discipline
Just as the economists are said to be puzzled by ONS statistics showing a rise in employment during recession, I’m hearing some business owners being equally puzzled as to why, with an increasing roll-call of practicing solicitors, it’s difficult to find one they’re comfortable with.
As essential facilitator as part of the buying /selling of businesses and property process, the proactive and efficient Solicitor seems to be as hit-and-miss experience as the intermediary who works with client best-interest at the forefront; or as my dear old Grandpapa would say they’re all froth, no beer. From the most recent comments, it would seem that some business Service markets (just to be clear, finance included) have elements in their sectors who are achieving disproportionate reward for the work they are perceived as undertaking. Nice work if you can get it? … Not from what I’m hearing, which makes it galling to have given out advice to a business owner to seek out the right people to handle the job, those who add value before their business gains the value, and to hear of them being let down and ultimately ever more cautious. The good old days of the friendly Solicitor haven’t gone but, just as any business has to adjust, if the friendly Solicitor can’t be friendly as well as efficient, I’ll no doubt continue hearing of a disinclination by business owners to approach them as part of the business process.
Without going into the minutia of data, exploring whether a downturn in the economy has increase or decrease effect on a professions numbers, any business service sectors’ paying clients expect full market applicable knowledge to be offered: along with guidance, advice and information; whilst efficiently having as much of any pain of a sometimes painful process taken away – no matter what the economy. In a downturn the necessity of offering value for money is ever more prevalent.
Like the three bears’ porridge, there are those who’ve always striven in reacting their resources and experience to be just right – neither too hot nor too cold with their offerings - unlike the hot temperamental ones who won’t move until fees are paid upfront, or would rather bicker with the other party’s solicitors (I’m considerably smarter than yow!), or the too cold who are so uncommunicative they may as well be in a freezer.
The notion of excellence widely varies: think about the last place someone told you to get a bite to eat – was it the same experience for you, as them? Now think about following through a recommendation made for your business to use….. I once needed personal photo verification; I enquired with a Solicitor’s office and was told it wasn’t a problem if I was willing to wait around to nip-in a space between appointments. It was a painless couple of minutes; I was acknowledged, and signature assigned as such. I also left £20 lighter with no receipt and a sense of being ‘fleeced’, yet had I been told beforehand about the charge, and proffered a service receipt, I’d likely be admiring the efficiency.
A frequent request made to me is that of recommending a solicitor, to which I’m happy to oblige and put into the pot those who’ve worked well with my clients. With some clients/customers never having been through a process they’re about to embark on, not fully understanding that process is understandable. How a business Service, such as the Solicitor, can surpass their understanding; un-confuse its often alien language, inform of the relevance of qualification or regulation and explain the efficiency of implementing technology, should be considerations to go alongside any recommendations.
Working with a proactive team means benefits for all the businesses involved and ultimately all-around client/customer service level – however, Customer Service is a value discipline to which only the customer can assign worth.
Image credit: mrrakt Article credit: Copyright SUF 2012