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
06 11 2012
Although annual inflation had dropped to its lowest in 3 years at under 3%, Inflation and Productivity research by the Forum of Private Business’s (FPB) showed, from those who took part in the referendum survey, inflation was running at 6%-7%, with the most common increase in costs for SME’s being energy. Also citing fuel and energy costs as a sector challenge, the construction industry saw a fractionally higher output in the Construction Purchasing Managers’ Index Mark/CIPS with a figure that only just separated growth from contraction. Residential building activity showed as being the weakest performing sub-sector, with commercial activity also showing a drop.
According to Zoopla figures for the last 12 months, the value of the average home in Britain has risen by £3,373: the Independent shows the average home value as £226,369 and property prices in London continuing to rise. Changes to mortgage lending regulations which intensify scrutiny of the borrower’s ability to pay have been put back from 2013 to 2014, whilst research, published by Cluttons, shows rents expected to rise significantly over the next ten years in the Capital, will not be matched by a rise in supply - therefore prices and rent will be pushed upwards in an area which already has the highest concentration of renters in the UK.
Not alone in wanting to see the evidence used for the postponement decision in the Revaluation of Business Rates, are The Association of Convenience Stores (ACS), The British Retail Consortium (BRC) also wants the scrapping of inflation based increases. As companies will have to pay rates based on property rents in 2008 (near peak evaluations) until 2018, they face hikes of over 2% next year. Every 5 years, the way bills are calculated is revised by the Valuation Office Agency, The Growth and Infrastructure Bill (clause 22) includes postponing the next business revaluation until 2017. With some commercial property values having fallen significantly since pre-recession any business rate fixture not relevant to current values could be hard hit – some potentially facing higher rates than rent.
Whilst there are now around 30 institutions taking part in BofE’s Funding for Lending which gives access to cheap funding; with the proviso of growing net lending into the economy Supply Chain Finance (SCF) a cashflow scheme has been announced. Based on the strength of large companies i.e. Vodafone / Rolls-Royce / Tesco, credit ratings notifying suppliers’ banks that invoices have been cleared for payment, those suppliers can then arrange for their banks to give them 100% advance of the money they are scheduled to receive. With a £20bn target set, the Government intends to implement this amongst its suppliers, starting with the Community Pharmacies in England and their 80 million monthly NHS prescription items.
Another month with no hanging-around in business, including for the Foreign and Commonwealth Office (FCO) who, having some building work done, spent £10,000 re-stuffing an old snake and taking care of their assets.
Image and Article credit: Copyright SUF 2012
15 10 2012
The man ‘flu hasn’t receded: meaning I’ve been at the receiving end of quite a few ‘told you so!’ from those near and (increasingly) not-so-dear as they remind me of their fore warnings – ‘It’s colder out there than it looks’, ‘keeping those wet socks on won’t help’, ‘feed a cold, starve a flu… where does it say drink plenty of whisky?’
Basically I’m being told I’ve been a fool to mess about on the river for an inclement day, when I’d managed to get a boot full of water before I even set off… and now I’m paying the price twice; once with the persistent cold symptoms and once by the annoying ‘told you so’.
I haven’t had my flu jab… is more likely the reason. It might be more opportune as a lone voice, or fighting conventional wisdom to be able crow ‘I told you so’ – like to those I’d warned to look at their metrics – but they’re managing to keep warm, out in the cold, fighting fires, trying to breathe new life into something that has clearly gone…. and I can’t be bothered because I’m sick…. of people saying ‘told you so!’
Image and Article credit: Copyright SUF 2012
22 08 2012
I sometimes don’t know which hard surface to bang my head against first. There’s the one waiting next to those who, being good at what they do in business adopt an attitude of possessing business acumen in specialist areas – to which they have no experience - or, the hard surface next to those businesses who follow these expansion of service offerings like a blinkered donkey following a carrot. It can magnetise me with despair.
Whilst some advisors are well placed to give advice it doesn’t follow they have a specific expertise appropriate to a specific business type. And, the less confident a business is, the more likely they’re exposed to a non value-for-money service when there is a gap between what is needed and what is supplied.
So, when the small business owner tells me their “house is in order” because they’ve been told by their “professional” advisor – but they can’t understand what they’ve been told, or why they are doing what they are doing with their business – that’s got to be leaning towards a paradox?
Image credit: Brett Jordan Article credit: Copyright SUF 2012
04 07 2012
Shoot…! ….Before You’re Shot!
Clearly for us in the Northern hemisphere, after tilting its maximum towards the sun in June, the longest day in terms of daylight hours has reached its peak for another year. Doubtless is the longest day for business owner-managers, with any changes occurring in different areas at the same time, over yet… and the potential is to increase the sense of everything changing at once. Add in the sense of peddling twice as fast to stay in the same place, it’s easy to lose direction, become staid and too busy for business… or life.
In the micro and small business operators world, in which time is eaten up quicker than cheese by a mouse in a creamery, the daily challenges can be similar to that given out to the Radio 4 panellists on Just a Minute: managing 60 seconds without repetition, hesitation or deviation. For some, the constant erosion results in a belief that being older means automatically time will move quicker, for others, the misinterpretation that nothing remains the same.
At a time when even being a long established family run business, with a great local reputation, isn’t sufficient to stand out against competing county and national chains, there is constant opportunity in the basis of business and the trading of products and services, and it is difficult to think of any businesses exempt from the benefits of continually refining its own information or practice (even before the time of the internet). However, when information overload is added to the mix of ever prevalent disturbance to attention, there can be a tipping point reached: being both cause and symptom, new opportunities and experiences are suppressed.
In this modern life in which time and technology moves at a pace seemingly faster than the speed of light, where it’s possible to use a phone that is smart enough to monitor heartbeat, after running for a train to which tickets were bought over the internet, whilst making the decision whether to arrange a taxi on arrival, when mail no longer necessitates a postie and face to face conversations happen through a screen, time does indeed seem to go quicker than ever before: business environments and customer wants/needs constantly changing - the changes in effect becoming a constant.
3 Shots to Crank Up Business’s Constant Changes ….and Kill the Overload
- Concentrate on areas that ensure the business is sustained – The financials, the data, the spreadsheets – boring and time consuming but true
- Give attention to new customers as well as loyal customers – Identify a market, the customer in that market and what that customer wants – time consuming but true
- Apply digital technology: applications such as email, smartphones, websites – Be selective; use the silent mode on your mobile phone, prioritise emails and make your website relevant – time consuming but true.
There are hundreds of businesses competing and claiming to give professional service (what other type would they make claim to!?) Add to that corporates with their brand going before them (think coffee – think Starbucks, think health – think Boots, think cheap supermarket – think Asda), the independent has plenty to make their days seem very long. For example, motorists are now enabled to buy car parts online, the website being the enabler; some are good sites, some are bad and some are in the middle. Some motorists choose to use a mechanic in a garage; some have good garage services, some bad and some are in the middle: as in all business types there are the good, the bad and the ugly. There’s no magic involved in the value-base for online customers altering their middleman from garage to website, and the mechanic’s customers’ preference of garage as intermediary, the customer has the choice of preference and a business has a choice in how it operates. Product or service, B2B or direct, all business types have a commonality in their customers wanting gold star service - it should be a norm but is often seen as an added bonus - add to that something that gets their attention or makes an impression, the customer experience becomes enjoyable.
Offering great deals which pass savings on is what customers want: it’s what businesses purport along with having a great reputation, keeping the customer updated and so on. But business being enjoyable isn’t easy for many sectors, us included; there are no giggles in high-end rate scales, pedantic red tape, or corporate contemplation, but experiencing customer satisfaction by creating an agreeable experience for a customer is drive in itself, no hesitation or deviation – for repetition.
Putting the customer first doesn’t always make us the most popular, arguing with a lender when we’re firmly on the side of customer makes for one of our less enjoyable challenges, but, a business that puts its customer first, by knowing they have understood what their customer wants, builds a confidence which reinforces their ability against the competition.
Seize the information overload, wring it dry, mangle it into submission and make it work for your business instead of against your business …..providing you’re not in a blackspot!
01 05 2012
Old news, the UK is in recession (again) as the Office of National Statistics said Britain’s GDP fell 0.2% in the first quarter of 2012 after contracting by 0.3% at the end of 2011, forecasts were upset by a big fall in construction output and industrial output. Therefore, with a sinking-ship type economy, apt news via an Australian whose planning on constructing Titanic II in late 2013, with a maiden voyage planned for 2016. With an interesting and pragmatic approach towards his new state of the art venture, that only a billionaire could have in such times: “of course it will sink if you put a hole in it”.
The Taxpayers stake in RBS could be sold off before the next general election but, according to the Treasury, not before “it delivers value for money for the taxpayer”.
The Bank of England are on the move with 1,000 FSA staff from Canary Wharf to JP Morgan offices for their Prudential Regulatory Authority role.
The latest BoE Trend in Lending Report showed that bank lending to businesses was down 3% over the latest 12 months; with lending to small businesses down by approximately 10% in the latest 12 months.
Landlords and their tenants are being considered for a Government charter which could include legal fire and safety standards, and rules governing anti-social behaviour, as part of a central standardised document of landlord/tenant responsibly.
Google UK is to launch its financial comparison service for credit cards and savings accounts.
Diamond Jubilee Year sees the Queen’s speech 9 May and will likely to focus on Bills passed and those in progress; the Finance Bill regarding tax measures and stamp duty, the Financial Services Bill which aims to overhaul financial regulation, the Localism Act which introduced local authorities to being able to grant discounts on business rates (provided they are funded locally) and the Grocery Code Adjudicator Bill that aims to monitor the grocery supply chain.
(Image and Article credit: Copyright SUF)
07 03 2012
Anything is Possible, Not Probable: In Business. In Finance.
Any business managing to track a path throughout the last few years and get to now, which is the majority of small or micro business (and includes new entry), should be very proud.
What next, what’s the future of your business?
Why should you want to think about future business, you enjoy a peaceful life and don’t want to rock any boats, besides you understand your business sufficiently to distinguish between its needs and wants, you’re experienced sufficiently to adapt to market changes and who needs to grow when you’re paying your way? With a density of access to information and resources available it’s understandable that we think we can do it all.
Business Boss Budget Balance
Operating a business is the same as operating personal cash flow, even the translation of controlling expectations is the same; anything is possible, not probable. The powerful effect of operating within your means effects the decisions you are able to make for the future of your business.
Disappointment for the small / micro business which can’t react to change means restrictive growth becomes further squashed by the increasing frustrations which pile higher to outweigh any allowances for change. Keeping the balance is something that only those leading and managing the business have the power to change.
No credit running through the business, ultimately means, no business, yet, talking with some business owners, their resounding areas of commonality are perceived as a lack of customers and reduced profits. No allowance has been made for any changes to their business model, either imposed or self generated yet few businesses can survive with such an attitude. Any ‘personal’ financial support does what it says on the tin therefore needs to be carefully planned to be maintained as a sustained budget balance.
What you offer your customers; what you enjoy doing, are good at doing and want to do, might not be those customers understanding of what you do. What your customers want; understand that you don’t offer and don’t use you for, might be the misunderstanding of what you do.
Reality check; the majority of markets, whether shrinking or expanding, have customers who eschew most things that don’t have convenience attached. Any business clinging to old school has to fuse something to their business to ensure that it remains strong enough to move forward, or, have the value for a strong sale. It’s understandable to hear some businesses say they need more customers but that’s not the problem. Without the customers, there can’t be any more resources and without the resources customers are unlikely to be retained, replaced or grow.
To move forward, business owners need to distinguish between
- Rocking the business boat and the business boat being rocked
- The businesses needs and personal wants
- Current reality and future reality
Because in business, as in life, anything is possible, not probable….. especially if the financial balance allows for change.
(Image credit: chrisj_moore Article credit: Copyright SUF)
06 03 2012
2 signatures were missing from the EU Fiscal Compact, UK and Czech Republic were the 2 out of 27 EU leaders who didn’t sign the new treaty, enforcing budget discipline and aiming to prevent huge debts and potential consequential bailouts. The ‘fiscal compact’, signed before any fiscal / transfer union or any devalue/ leaving, will now to go before national parliaments.
3 key driver variables for house repossession are the debt service ratio, the proportion of mortgages in negative equity and unemployment rate, according to an economic model which uses both national and regional data sources. The model, being used to influence government policy, the Bank of England and at least one major UK bank, demonstrates that even moderate rises in mortgage interest rates makes an impact.
£735 a year more is the payment that Halifax mortgage account owners are facing following rate hikes on May 1, going from 3.5% to 3.99% it will affect 850,000 customers.
£200m from Merlin banks and £400m from dormant bank accounts , which Big Society Capital used to set up as a social investment wholesaler in the support of a market growth for social investment. With social as well as financial returns, they are now looking to multiply the launch funds.
£2.8bn was paid over to the government in a combination of interest, fees, corporation tax and loan repayments by UKAR; who manages the closed mortgage businesses of Bradford & Bingley and Northern Rock Asset Management. Assisting the increased profits, by 145% to £1.09bn, was last year’s repossession of 8,800 properties. So far, £3.1bn payments have been made from the ‘bad bit’ (NRAM) towards bailout loans.
£3bn capital requirement is the latest challenge facing the UK’s biggest mutual, Co-op which has seen its Somerfield acquisition sales slipping 2.4%, faced £700m costs with the integration of Britannia Building Society and now the possible requirement, to sign off the Lloyds deal, which will see it transform to a financial service dominated company.
£18bn has been wiped from the market value of HSBC following financial regulations introduced after the banking crisis. CEO Gulliver said the Government’s new banking levy and suggestions that lenders hold enough cash to absorb a loss of up to 20% of their balance sheets would cost it 2.8 billion US dollars (£1.8 billion) in 2012; with equivalent to 17% being wiped off its market value.
£20bn, underwritten by the government, as the National Loan Guarantee Scheme (credit easing), for the benefit of small business cheaper loans has had Brussels demand that the Treasury force banks to pay a minimum amount to participate. HSBC is contemplating withdrawing because of concerns of over exposure to itself because its lending is mostly out of customer deposits unlike wholesale banks such as RBS and Lloyds Banking Group.
£31bn is the amount borrowed by UK banks from the ECB’s second round of three-year loans. The 1% Central Bank’s trillion-euro Long Term Refinancing Operation was the most interesting to Lloyds Banking Group who took €13.6bn, Barclays had €8.2bn, RBS and HSBC split €18bn with a further 796 banks and financial institutions turning to the ECB for a total €529.5bn. The first phase of the ECB’s three-year loan programme helped boost market sentiment, as banks used the funding to refinance debt although the overnight deposit facility only earns an interest rate of 0.25% it is therefore the hope that some of the money being injected into the banking system will start filtering down to the real economy, in the form of easier funding.
(Image and Article credit: Copyright SUF)