Blog Archive


BOOM! The Only Acid Test

“As I hurtled through space, one thought kept crossing my mind – Every part of this rocket was supplied by the lowest bidder” ~ John Glenn.

There are some small numbers that can make a big difference to a business and there are some metrics that are readily available and ripe for easy improvement: the efficiency in using breeze blocks proportionate to bricks for a refurbishment, the types of stock allowed on the shelves longer than other types, the specific machine able to put out a new product, or even how the length of time taken to make a repair for a part that a customer doesn’t even realises exists.

And, glancing backwards over experience garnered in the daily running of a business, it’s probably the small tweaks and adaptations (how the day is organised, the sales cycle, staff issues… etc.) as being the most noticeable in having made or are still making a bigger difference for that business.

Putting aside the actual business type and market sector to isolate the financial aspect, too often financial decisions are also taken after, when the biggest numbers’ (gross profit, cost of goods, inventory and so on) history on the logs and spreadsheets have been looked over… and an accountant will likely guide through further changes to net better results (tax, VAT, company formation, bookkeeping….). Dollar2

The small numbers that can make a difference get the attention they need. The mechanics are regularly overseen. The metrics are monitored. The financial statements have a regular MOT (Monitor or Terminate).

But what about, as we call it, the mysterious metric?

This is the measurement I use as a starting point for calculating lender’s interest for mortgages, loans and business finance.  It isn’t a secret, obscure or hidden metric. It’s a usually overlooked business buffering opportunity made up of those small numbers – the little ones that make the difference amongst the numbers, spreadsheets and statements.

The financial statements might (maybe a year down the line) show where there is a problem (which six months ago was the future but is now the past).  BOOM!  While these numbers have been building up (or down), lenders have been building their key metrics using their own ratios and, a year ago, when there might have been wriggle-room in a business, so might a lender have had some wiggle room.


A business’s metrics (from its ratios) change, lenders’ metrics (from their ratios) change. The correct business metric directed at the correct lender metric, at the correct time is the acid test of fiscal health. BOOM!

Images and Article credit: Copyright SUF © 2014


As from 1 April 2014 the Competition Commission is being taken over by the Competition and Markets Authority (CMA) and will assume the consumer functions of the Office of Fair Trading OFT concurrently with Financial Conduct Authority (FCA) who will hold the law powers in relation to financial sector activities  for over 50,000 applicable consumer credit regulation firms.


As from 26 April 2014 new lending rules will be applied as a framework for lending when the Mortgage Market Review (MMR)  comes into full effect. For all types of regulated mortgage contracts, lenders will be looking for the ability of all borrowers to afford the loan at both the current rate and, additionally, if there were rate rises. It applies to staying with the same lender; repayment methods, further advances, part or full redemptions and equity transfer, as well as considering a new lender and non-bank mortgage lenders subject to risk-based capital requirements and liquidity risk management controls. Using detailed scrutiny, this advice driven model in essence focuses on responsible lending and affordability assessments.


‘The more organised you are and the quicker you can get to the point of exchanging contracts, the less time there is for movement in the market.’  Although we haven’t seen it recently, apparently gazumping is on the rise.


And …. crazy prices continue….

£1M for a `smaller than a tube carriage’ flat

£150K for a solar powered beach hut.

£115K for a very messy house.

Image and Article credits: Copyright SUF © 2014

Step-Up Finance Slang: Short-Termist :
Someone who chooses the path of least resistance instead of unscrambling the jigsaw for a clearer picture.


The Long and Short of it.

Shopping around IS time consuming and when you want to access accurate advice or information before you buy, but don’t know who stocks what or aren’t sure where the shops are, there’s not a great value to shopping around.


When seeking a mortgage, loan or financial solution - distinguish between absolute value and perceived value.tn_HappyGrumpy

Perspective is formulated by using a ready-mix that includes contextual factors and subjective judgement. In other words, compared to our view of the landscape, the business owner’s view (affected by unconscious factors) is often slanted.

The price tag is the primer of perceived ‘better things’ and it effects judgement: something in a better location or environment, and having better packaging is usually expensive or carries the biggest price tag, but experience also effects judgement. I can state with certainty that ironically the most expensive finance, mortgage or loan (or that which is packaged for marketing) isn’t necessarily the best value (with the same applying to the least expensive).

It’s unfathomable to us why (especially with a culture of progressive IT) an Independent business owner is usually bounded by the rational of The Bank being their first port of call. A local branch manages to supersede any of the rational aspects of the parent (The Bank) whose systems, structures or attitude is the priority to limitation.  This leaves in the shadows, for Business Finance considerations and property purchases (Commercial, BTL or Personal), the alternative lenders and solutions.

We all like to think we’re rational when it counts but when the heat is on, pressure is building up or time is running out, applying those decision making processes often appear too lengthy, too time consuming, and (sometimes) agonising in the way it can sap and distract from what we’d rather be doing. The`To Do’ list is getting longer, there’s subjective pressure coming from a business/family /friend relationship (talk to ____ , she’s an accountant for M&S ) or second guessing from checks on comparison sites (that display offerings of naive reassurance) all contribute to the shoring up distraction from the task in hand…. and misleading information.



The blinkers stay on and prevent the appreciation of investigating, examining, probing and questioning.

That which directs our decisions, when it’s associated with something that can’t be quantified, is too often misinterpreted as an understatement: Value.



FINANCE TIP 2  Direct Absolute Value instead of Perceived Value.

Immediate perceived value is achieved through headline grabbing rates and an incorrect assumption that an employee (bank manager or packager) is working for you, not their employer (the lender).

Effective value is in choice; achieved by direct control to remove artificial constraints.

And is achievable without the angst and time consumption of shopping around blindly, working out the likely courses of action, evaluating, finding explanations or filling out reports and forms.

Images and Articles credit: Copyright SUF © 2014


For a bank which had the resources to be ethical and promoted itself as ‘ethical’  – it’s fallen short.  Acquiring a load of toxic debt along with Britannia Building Society and thus far avoiding being wound up, it’s been a painful year for the mutually owned Co-Op Group.

And it’s CEO has now been cited as stating it’s “Ungovernable”  (possibly whilst he slid his resignation across the boardroom table).

Can ethics be re-invented or is there little to Smile about?

Image and Article credit: Copyright SUF © 2014

What’s Growth Got To Do With It?

Fact: Businesses are the closest to consumers

When there are concerns  about consumers (pretty much a full time occupation for the business owner) those concerns translate to any concerns about the long term outlook – there is a connection between business’ consumers (customers) and forecasts of upward trajectory – it’s the  running a successful business fundamental – there are few who ever take their eye away from concern, or never have a long term outlook aim of upward trajectory. And, it’s a fundamental applied to before the 2008/09 crash and during the recession;  and it will continue to be for as long as there business owners running successful businesses – healthy economy or not.

Do moderate improvements in economic data mean moderate improvement in the intentions of business? Is it upward trajectory time?

Without getting into the nitty-gritty of different indexes and surveys; or differing business sectors’ economic pressures, aspirations and challenges, it seems with the notion of being in a bad BUT improving place there comes an ability to pull out ideas that had been put away for a lengthy hibernation. Published data  which kick-started the New Year continues to seemingly remain optimistic for the near future; there’s an encouraging, in general positive,  economic outlook as we enter what is (for some) the final part of Q1 territory and for others the exit of Q4.

Business owners want to grow but without adequate support and resources and a healthy strategy….?

Ever the proud wearer of my sceptic’s badge (I’d like to think held firmly in place with balanced thinking), from my perspective and the conversations I’ve had with small business owners (not just in this Q1, or the last Q4, but anytime), any louder platforms’ (media) increased frequency to the noise surrounding economic outlook can skew perception of reality. A recent ‘telling’ strategy is when something gets more headlines than banker’s bonuses during bankers’ bonus season. Compared to past usual headlines at this time is there any wonder I question if something is lying deeper behind the new kid on the headline grabbing block, when, what for some seems a recent conversation is a common conversation for others? Independent businesses’ talk about the long term outlook never stopped because it’s not a recession that’s dangerous – it’s the recovery that’s dangerous.

So, I’m with the guy who said ‘if you’re too open minded your brains will fall out’, as is the business owner (the one I mentioned before filtering concerns, taking  aim at upward trajectory for long term outlook with one eye whilst using the other to watch the customers) , the one who isn’t under an illusion about the reality of reality.

Weigh up all the variables and strategizeCustomer

A common strategy which can support a business in aiming for upward trajectory is to remove (if there are any) some of the profits which, considering the aim of business is to make a profit and that successful businesses are seen as profitable, seems in conflict. However, this isn’t the ‘removal’ of profits in accountancy terms (relating to any drawings or deferrals), this strategy is about responding and managing a business in a balanced manner by not letting it get stagnant.  The long term outlook and potential growth is planned with balanced expansion, is sustainable, allowing margin for ‘error’, uses a combination of internal finance (reserves used reservedly) and raising external (bought in) cash flow products, equity funding or business loan as working capital finance.

Those who have implemented this are likely now enabled to feel encouraged by their strategy. And, those who remained stagnant might want to swap cynic’s badge for sceptics; pin a sign of caution with cautious optimism.

To be able to calculate a trajectory

Investment in a business has to be balanced, resources and facilities for growth have to be factored in at the right time; placed for opportunity and shrinkage buffering. Put some sustainable working capital with a pro-active business owner, whose willing to pop a few of their pounds back into capital expenditure and you have a business that understands interdependency.

With general business conditions continuing to be up and down, investing enough to fill the holes without constraint enables a business to operate and continue its transition. Its takes away being powerless  and can look away from the headlines and far enough ahead to think about growth.


Image credits: Mike KrzeszakDell Inc.Lisa @ Sierra Tierra    Article credit: Copyright SUF 2014 ©




The banking industry has seen a rise in consumer confidence for two years in a row, according to a new survey of 32,000 banking customers in 43 countries. The study around the world showed confidence increasing most in India, followed by Saudi Arabia, with confidence falling the most in Ireland and Spain.The survey showed 60% of respondents aren’t planning to close or move their accounts, which, according to Ernst & Young highlights that this isn’t necessarily because they are confident that they are with the right provider, with some respondents stating they a change would be too difficult or time consuming.

“Bank customers are not being actively retained; they simply remain with their current provider through inertia and are therefore vulnerable to competitors“.

According to another global study the Arts, Entertainment and Hobbies market sector was 60% more competitive January 2014 compared to January 2013 and Financial Services 60% more so, whilst Sports & Recreation was 121% less competitive in January 2014 compared to 2013 in relation to digital advertising

The three months to February saw a highest level since 1998, in the Confederation of British Industry (CBI) quarterly Service Sector Survey.   Optimism indices for consumer services (including hotels, bars, restaurants and leisure) rose to their highest level amongst 139 companies and at the quickest pace since 2005.

The ONS has confirmed the UK economy grew by 0.7% in the Quarter with business investment rising by 2.4% from the previous three-month period and rose 8.5% from a year earlier.

The BBA  (British Bankers Association) has said that mortgage lending was 38% higher in January than a year ago and ‘continues to rise compared to a year earlier’. It is widely expected that the Bank of England  will raise interest rates by the end of next year, with an inevitable knock-on effect on mortgage rates.

Finally, not certain if this is a record or not but Royal Bank of Scotland has lost all the money  invested in it by the taxpayer six years ago with total losses since its bailout now drawn level with the £46bn put in with 81% stake, in 2008 and The Co-op Group’s losses  for 2013 are expected to be greater than £2bn, by far the worst in its history.

Image and Article credits: Copyright SUF 2014 ©



When things went wrong….

Coming about in relation to an outsourced service not meeting standards, the matter escalated when Customer Services proved ever more disjointed. I’d contemplated the situation with an initial conclusion, the situation was as clear as mud.

It wasn’t until (eventually) meeting an appropriate manager who could efficiently illustrate that combining knowledge with authority (in this case the right person for the job) wasting resources could be avoided: the ‘gatekeeper’ element can avoid being a `business beware’ element.

With a value proposition which, for me, isn’t easily understood (nor tripped lightly off the tongue), John Lewis’s proposition of being ‘never knowingly undersold’  had a lot of ground for discussion – they offer to match or beat price (high street outlets only) with, if I’m correct, the interesting bit for me, comparable service offerings (although I’m still not clear about how a service offering is measured).

Until I’d had this recent ‘debate’, revising management systems for queues (of any type) might have fleetingly got my attention but I’d never had any inclination to ever ponder management systems, subjecting management effectiveness, subjecting gatekeepers’ authority, subjecting a business value proposition to vulnerability…. I’d met it before (in big Corps) but hadn’t realised how this ‘system’ could, transferred to smaller businesses,  have a bigger impact.

Placed at points of convergence, a business gatekeeper is as easily able to undermine a business, or lose an opportunity to capitalise, as it is (when well managed) to be a value proposition and add value to a business.

Driven through a business environment, and checked by maintained commitment, commercial success  is the objective:  for the majority in business. Therefore, it stands to reason that any business support mechanisms ‘placed’ on the frontline need to be effective. The bigger the business the lesser the impact – hence, my vague contemplations on ‘gatekeeper’ not being a buzzword but, from sole trader through to large corporate, a business tool with challenges.

My current thinking remains that business:  small, medium or large, with vertical or lateral management and sole trader (including  co-ownership (John Lewis) cultures), ‘gatekeepers’   can leave businesses susceptible when ‘behaviours’ aren’t managed.  And, as we’re ALL gatekeepers to our customers, whatever forms the gatekeeper takes; performance is relevant if the business is to benefit.

Typically this returns to managing business to avoid having one that could have let, like a Trojan Horse,  a lot of unnoticed additional problems in.


Image credits: Joshin Yamada      Jackie Curry  Article credit: Copyright SUF 2014 ©

The latest Bank of England Inflation Report  has altered Bank of England Governor Mark Carney’s Interest Rate Policy since the first Report (August 2013).

Now, reflecting the falling unemployment and economic recovery, policy will be determined by a wider range of indicators other than the previous indicator of unemployment falling to 7% or below. The report says the ‘Bank Rate may need to remain at low levels for some time to come’ and considers ‘economic slack’ being ‘substantially reduced’, in taking a gradual approach to rate increases.  ‘When Bank Rate does begin to rise, the appropriate path so as to eliminate slack over the next two to three years and keep inflation close to the target is expected to be gradual’.  Sterling rose to an almost 3 year high  following the central banks forward guidance.

Although, with the ONS (Office of National Statistics) using some B of E Data, it will be interesting to see how they interpret the effects of the recent floods in their measurements: moving from Cornwall into the Thames Valley, M4 and M3 corridor. Mark Carney has said  although the floods would influence the short-term outlook, there was unlikely to be any effect on overall growth – currently forecast at 3.4 per cent this year.

Will the UK still be seen as being in a bad but improving place?

Image and Article credit: SUF Copyright 2014 ©

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