Blog Archive


Stuck in a Rut?

In the intervening years since I last viewed an end of year school report, things may have changed. Rarely containing a personal comment, they had to be scrutinised for hidden meanings to talk over on parent’s evening. Promises of trying harder were made for after the summer break… the fresh start of un-graffiti-riddled folders and un-bitten pen sets.

Similar to an end of year school report, commercial lending annual client reviews have content which rarely deviates too far from standard statements. Comment of the, could do better or has the ability but needs to focus ilk is made to those whose promises go unfulfilled, with the more usual fare being about fiscal sustainability and continued improvements, steady and measurable progress, operational effectiveness and manageable growth.

To sustain trying harder away from being an abstract concept, the follow through is measurement.  Numbers3

Capital, cash flow, credit, reserves, liquidity, surpluses and reorganisation are boring (for the most of us). It’s only when I get my teeth into a project that the structure of those elements take on a different shape, when their life-cycle comes alive, then I get interested. But, for the smaller business owner, when there’s little or no co-operation from the channels or instruments used for these elements, it can be very frustrating – and easy to see why focus disappears. There’s a trajectory to the great unknown which is daunting enough without increasingly hearing the latest in vogue F-word lavishly bandied about.

Distracted focus from a commercial liability can undermine its strength when the base-lines used to measure creditworthiness or business performance keep shifting.

Aversion, happening further up the food chain of global markets, acts to exacerbate the problem of financing for the smaller business owner. Limitations are trickling down in the real economy, at the same time as costs rising; disconcerting the independent business owner and disorienting general financial conditions. Even with positives to a business investment, even for the risk-averse and even in an F-for-Frugal environment, sustaining profitability can suffer from caution as businesses are being forced to operate differently.

Lending banks won’t deviate from their deposit base as they shore up their capital base. The UK inflationary pressures are low, with a likelihood of interest rate increases looming ever nearer.

Banks, and other lending sources, are businesses – hugely complex businesses. They have a business plan or operating strategy (that includes a marketing presence). They’re run with strategic focus, which has strategic objectives and a perception of risk. They have lending profiles and use cost control. Targets seek returns and are derived from KPI’s (Key Performance Indicators), monitored by KRI’s (Key Risk Indicators) for losses (immediately and effectively).  They often have a mix of funds and borrowing, debt and equity to operate with. They use monitoring systems for their operating expenses and price margins. Sometimes mid-term reviews are implemented for corrective measures to their targets. They look to minimising their cost of capital and balance their own capital, borrowed funds or reserves and their internal management systems expect customers to operate similarly.

What happens when a businesses system doesn’t have those elements available or implemented?

The only difference between a Rut and a Grave…. is the depth.

Image credits: Sonny Abesamis and SUF   Article credit: Copyright SUF © 2014







“What’s that all about?” said (yet another) incredulous business bank customer who was shocked at the disappearance of their bank manager’s discretionary aura.

We all know the routine: Effective funder relationships are the way to go. But, lenders have been on a diet, and if they’re on a diet the sweet jar doesn’t get opened for all their customers.

Who gets a cookie from the cookie jar when belts are being tightened by fettered discretion?

 Apparently business finance has a partner to the challenges of inflexibility and the leach of box-ticking over discretion has slid into some mortgage lenders ‘over-interpreting’ new regulations.

Discretion is the basic requirement behind a well run businesses reasoning…… Need I say more?

Article credit: 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 ©

With inflation falling to the Bank of England’s 2% target for the first time in four years and numbers from Bank of England Credit Conditions Survey (2013 Q4)  continuing an upward trend, the notion of  ‘positive’ outlook has (for some) been reinforced.

Could it be that Default Rates on lending to small businesses  being reported as ‘fallen significantly in Q4’,  with  medium-sized companies unchanged and large PNFC’s falling over the quarter,  was due to re-structuring of existing facilities being part of the reclassification for 2012?  Alongside a statement which shows spreads on corporate lending falling in Q4, with  ‘significant reductions’ for medium-sized companies and large PNFCs, and a slight reduction for small businesses’ it’s worthy to  question an attribution to re-structures into the figures behind the numbers.

Depending on the questions asked and the answers given some results are ‘not directly comparable’ therefore perhaps some statements are too narrow?  Maybe an insightful survey is one that focuses on the survey participants’ business attitude, their plans and strategy in achieving that objective. Would that offer a stronger perspective and wider field of vision into the UK economy or would it  tell us what’s happening in business rather than what’s happened?

Image credit: Pilot Theatre  Article credit: Copyright SUF 2014 ©

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

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


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


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


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