03 03 2013
Deciding factors for shopping commonly include price, quality or choice. Deciding factors for personal banking might be interest rates, additional services, convenience or, it seems from Sainsbury bank’s pre-tax operating profit increase of 40% last year, the loyalty card points.
Ways to tap into potential customers: It is our business to quickly restore value-added infrastructures that provide key differentiators between us and our competitors, may have been discussed at the annual review before the decision to expand the roll out of GP Services. Much like ‘Tesco Law’, ‘Sainsbury Surgery’ might be perceived as a game changer but picking up the tea-and-sympathy biscuits after minor surgery, or experiencing a checkout process with the walking-wounded nearby, will depend on what the customer wants…. or is driven to.
The idea of a rent-free surgery in the calculations might be sufficient for any wanting to consider one of the seven additional practices but with no mention of double points, or who’ll eventually take up the slack for the rent, will it have sufficient benefit? It may be that co-payments further down the line of the Health and Social Care Act 2012, coming into action (April), will fill in the gaps.
Being a driven customer is the latest experience for the TMW (The Mortgage Works) landlord applicant where tenants receive housing benefit. No longer will borrowings be available after Nationwide made the decision to clarify their policy. We seem to be making headway against competition benchmarks. Have we checked that they haven’t changed direction? And yet, within two days, they completed a massive U-turn, apparently listening to the market….
And so it is for some loan customers of, Australian owned, Yorkshire Bank, following the calling-in of loans that haven’t reached their termination date. The drive to find alternatives might have assisted in reducing the bank’s portfolio by £300m – due to loans reaching maturity, or exits from customers. Excellence carries a significant risk of over-reach. By targeting and repurposing mediocrity our risk profile becomes excellent.
It’s been a ‘choppy’ year for RBS with only £600m in the bonus pot and they’ve agreed to cut down the size of their US investment business, by selling part off (in the next two years) and restructure capital buffers in response the FSA. The State-backed bank intends to focus on the UK economy; lending to British households or small business.
There was a crooked man, who walked a crooked mile. We made him Head of Finance, and now we’ve made a pile.
All quotes attributed to @managerspeak
Image and Article credit: Copyright SUF
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
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
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
08 10 2012
‘Business Bank’, for increased lending to businesses has been announced by business secretary Vince Cable, who is ‘working with the Chancellor to develop a state-backed institution that will combine up to a billion pounds of new government capital with a larger private sector contribution’. It will be supported by guarantees and equity for long-term lending to SME’s by buying-up bank loans: not providing loans. Replacing the National Loan Guarantee Scheme, final details are to be announced in December’s Autumn Statement.
Changes to the law of occupation of vacant residential property, without the owner’s permission; squatting, mean that owners and tenants are now able to bring in the police if there are obvious signs and proof of a forced entry by a ‘squatter’: who could face the combination of a £5,000 fine and 6 month jail sentence because of the changes in the law (section 144).
As @brewdog recently tweeted – about their groundbreaking licence application case against Leeds City Council – ‘yeah we did it’ – might be the phrase of many; not so, micro-breweries. As, according to CAMRA, there were 158 startups in the last 12 months. Figures for pubs closing continue an increasing trend, so too does the choice of beer available - East Yorkshire alone has ten breweries in its region.
How high street banks cope with software glitch prevention has been requested by the FSA and ‘to ensure the overall resilience of critical infrastructure and banking processes’, so has the names of those responsible and their contingency plans.
The Parliamentary Commission on Banking Standards has released its written evidence responses to seven questions on banking. Barclays suggested setting up a Chartered Institute of Bankers and is considering setting up an externally run hotline for whistleblowers. HSBC suggested a ‘behavioural monitoring audit’ and Which? wants ‘big change’. Recommendations from the review are expected before the end of the year.
Some statistic from social landlords who are charging an average of 68 per cent of market rent for homes built through the affordable homes programme. The average rent charged by housing associations rose by 6 per cent in 2011/12, to an average of £81 a week. The average weekly rent across all providers, including local authorities, was £76. Two thirds of lets were for general needs, with the most common type of household taking up new general needs lets, being single adults under 60 without children (30 per cent).
There is to be a ‘greater role in self-regulation’ by asset-based finance industry’s trade body ABFA following allegations about the conduct of some invoice finance providers who abuse their preferred creditor status, profiting from struggling businesses or insolvency.
Employers are able to access grants of £1,500 via the Apprenticeship scheme when taking on an apprentice between the ages of 16 – 24, following the Holt Report. Made in a single payment new employers to the scheme can support up to ten apprentices.
The time limit extension for planning permissions have been clarified by the Chief Planner and confirm a one year extension to the temporary provision introduced in 2009 – when a permission might have lapsed, to extend the time limit and be granted a new time limit for implementing the permission. Effective from 1 October 2012 for live permissions granted on or before 1 October 2010, there will be a requirement for local authorities, from December 2012, to include a statement on every decision letter stating how they have proactively and positively supported the applicant.
Some businesses might be able to save money on their annual accountancy and administration costs under reduced auditing and reporting requirements which allows more companies to make a commercial decision about whether or not to have a statutory audit, if they meet two out of three criteria relating to balance sheet, turnover and number of employees for accounting years ending on or after 1 October 2012.
Image and Article credit: Copyright SUF 2012
04 09 2012
The Business Equivalent of Lactic Acid – Am I Bothered?
It would be too simple to blame the Olympics, too easy to blame the holiday period and too British to blame the weather for absorbing business focus. But, without wanting to sound like a easily forgettable Award speech that lists the team involved – amongst the landlords, property developers, retailers, publicans, pharmacists, beauticians, hairdressers, builders, decorators, artists and others I’ve worked with (….almost forgot the portable toilet developer), I’ve never met a time before when “Can’t Be Bothered”, as an attitude, has been so disturbingly prevalent across so many different sectors and markets. The polarisation between virtually audible sighs and animated attitudes, laughable excuse and insightful reasoning is striking.
There are those whose business holds their attention and they want to fight for its long term existence and those who neglect it until annual account check when the fading pulse is obvious in the statement and returns.
Maybe it’s Clarkson-esque to make a sweeping statement and assert the character traits of those in business without delving further into their individual circumstances but, on this occasion, highlighting the inertia-busting characteristics of the Can Be, won’t be deflected by an ‘ but you don’t understand’, or ‘ it’s different for them ’ because, in my experience, there are few with the common denominator of being their own boss who can be sieved through into the Can Be bothered from the Can’t Be bothered: no matter the circumstances, we’re all in charge of our own attitudes.
Those who understand the need to spend their money to benefit their business before they can tweek any model definition and focus on their customer base already review the balance sheets, keep the files updated, monitor financial reports, use cash forecasts, know their margins – the Can Be Bothered. They’re doing it, no procrastination for them, they understand business’s equivalent of lactic acid.
Can’t Be is unlikely to change: the MD of an independent lender who procrastinated for eight weeks in response to my concerns about misleading behaviour from one of its directors, the pharmacist who wanted a unique solution for business wavered for six weeks and couldn’t be bothered to implement the small amount of energy needed to implement it, pension-pot landlord who needed answers and wannabe property developer who sought guidance both picked my brains and all illustrated that Can’t Be could be a blueprint for the white-lie easy way to take out but not put in. They’re the mini-me of the greater culture of lying: politicians do it, banks do it, CEO’s do it, marketplaces do it, in our social lives sports people do it, celebrities do it, the ad-men sell it, – There would seem to be little incentive to behave differently. We all, to some extent or another, do it, attitude determines to what extent and purpose we are a Can Be or Can’t Be.
‘Ability is what you’re capable of doing. Motivation determines what you do. Attitude determines how well you do it’ – Lou Holtz.
It’s the way of the small independent in business – different business characteristics, run in different conditions, with different routines and different regulations; and so then the architect who went out of his way for wannabe property developer, the small enterprise owner managers who understand that to explore an idea doesn’t mean dirty tricks in the mix, our web/internet guy who reacts quicker than internet connection speed, the non-arrogant accountants who return calls, and the MD’s who lead their directors in accurate advice, are all their own Can Be bosses: As are the lender managers who gave time to pension-pot landlord and the manager willing to drive out on a second lengthy trip to reassure a small business owner.
Can’t Be seems to have a prominent feature; it’s from a culture of things coming easy, in which it’s easy to let things go. And it’s interesting to observe Can’t Be in moments of realisation, the finger of blame is pointed, weapon style, usually toward another Can’t Be in a type of Mexican stand-off, because they can’t be bothered to shoot first.
Weakness of attitude becomes the weakness of character – Albert Einstein.
Image credit: The Mad LOL Scientist Article credit: Copyright SUF 2012