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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.

BanknoteChanger

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

 

Pollex’s Up! Time Thief

Where is the human Pollex situated?

First day away from the office and, blessed crackers, I was exposed as a lazy thinker… I’d have to Google that one… I had no idea

Thinking takes practice  -  When it comes to cramming certain facts, I’ve never managed to hold the map of routes that circumnavigate burning midnight oil. Although even if I’d realised that higher intelligence (and by that I’m not referring to myself) isn’t insurance against the necessity of putting in practice, I’d still have skipped school in favour of seeing Bowie live. By the time I was a parent I hadn’t even given a thought to parenting needing practice so, as a naive parent, ‘kinaesthetic learner’  was welcomed as enthusiastically as child given a puppy for Christmas  and now, thanks to the Great God that is Google  we’re  all one click away from information overload …. and exposure to more lazy thinking.

Why bother problem solving by exploring ideas when there’s so much ‘knowledge’ readily available?  -  In business I’m sometimes as guilty as the next in giving out (accompanied by involuntarily inside mouth biting) ‘well… it depends’. The reason is (usually) simple: something is beyond my control; I have to surrender to an, in effect, legion of androgynous troopers, who waiting on the doorstep – ‘outside forces’.  For as frustrating as it can be (for all parties), I can’t always give a definitive black and white determination. But, just as I’ve experienced sufficient to realise that time is of the essence in business, I’ve also come to recognise, you’re going to have a hard time if a job isn’t done properly. Hence, I have a more frustrating time when a person emits (often with side of the mouth chew to infer they’re giving thought), ‘well… it depends’ as their camouflage for sitting on the fence – time wasting.

Ground control to Major Tom…   Can you hear me Major Tom?

Sometimes it does depend.

Without balanced thinking, pros and cons are useless  -  Take marketing  for example.  As each trend, strategy, plan, and measurement, expands, increases, decreases, the general shift  becomes, as with each element of a business’s evolution, more complex; especially when (like you and me) the customer factored in to the ROI is increasingly savvier in using online search for information, solutions and comparison. Then take what is now an elemental marketing platform, the website. Every business owner will have their own opinion about the notion that a business without a website is said to be non-existent. A website for some is easy entry into marketing, for others it can be too difficult to even consider, different perspectives, both derived from a ‘thinking’ process relevant to itself. However, the value judgement of ‘thinking’ resides in the overview, which is measured by considering the positive points of having a website and the negative points, or lesser positive. When something hasn’t been tried before, or experience tells of mistakes, messy experience, or similar, the ‘thinking’ balanced viewpoint might go along the lines of ‘it might be worthy of more information for further consideration’.Thumb

When thinking isn’t practiced surely it goes the way of any unpractised skill, meaning it can’t be put into operation from experience. Using the analogy of the well-practiced acrobat with an ability to rotate many hula hoops, all at once, quickly enough to make the hoops look as one – that’s what a Venn diagram of the scope of my service business’s crossovers would look like (elements overlapping one another, plus elements overlapping with other service businesses) -  just as other business owners’ Venns will have overlaps for how and what they operate. I don’t know about you, but for me it’s difficult to want to only direct my attention to the interesting bits of my business. The way I try to manage this tendency (and maintain direction) is to think about the decisions I have to make …. and make those decisions. And, as I don’t like to limit my thinking, the information I need mustn’t be limited or biased….

Thumb2 The point is, it’s not only the information that’s important. We all want a derivative black and white determination AND at the same time choice, alternatives to consider. The route of least resistance means that we don’t get distracted, decisions can be made quickly, time won’t run away further than it already has. Searching amongst constraints to find hidden, unobvious, possibility and informed decision making takes thinking about (time) which (as the inside of my cheek will attest), on the occasions of forces being beyond my control, can be frustrating - But as, in my experience, confident responses aren’t guarantee of certainty. Saying ‘well…. it depends’ can, depending on where you sit, be fence-sitting or thinking beyond the most likely.

 “You ask yourself not if this or that is expedient, but if it is right”  – Alan Paton

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Image credits: Celestine ChuaKevin KMarc DalmulderJin.

Article credit: Copyright SUF  2014©

The Banking Reform Act, ring fencing retail and investment banking, and implementing recommendations of the Parliamentary Commission on Banking standard (including criminal offences for senior bankers misconduct), has become law.

As is said, this is just the beginning.

Although, ring-fenced banks will not be able to hold or own the capital of other non ring-fenced banks etc., it won’t be fully in force for another four years during which a new authorisation process for staff will be introduced and effectiveness reviewed.

And, a banking union plan has been agreed for managing Eurozone banks (UK plus 10 other countries are not part of the plan). The ECB (European Central Bank) has been put in charge of European Union regulation rules for banks in the Eurozone

Image credit: WetWebWork  Article credit: Copyright SUF © 2013

Standing small things side by side, a singular value often has the ability to magnify itself; the singular value is increased as a collective.

Individually three words can each hold their own important relevancy; stand those words next to one another, as World Book Night does (the smallest word propped-up by the two longest at either side) and their combined strength works together.

Words come together to create a sort of letter-land community, in this case the common cause is promoting the world of books (and literacy in general). The three little words standing in a row could have placed the littlest first ‘We’ll go in letter order, B-Book, then N-Night, W-World’ : Book Night World.  ‘Nah! We’ll have little Book first, then you go World and I’ll follow’ : Book World Night. ‘No, you go first World because we’re all encompassing, then I’ll stand in the middle (the main act) followed by you Night’.

World Book Night. Enjoy Yours.

Image credit: mrsdkrebs  Article credit: Copyright SUF 2013

 

To avoid future bailouts at taxpayers’ expense, the splitting-up of major European banks debate continues  considering the separation of  high-risk investment banking and other bank operations: similar to  the Vickers Commission (London) aim, in separating capital market transactions from banking activity (lending and deposits).

Since 2008, the familiar phrase ‘too big to fail’ banks, has ensured that four years down the line countries are running out of resources and the public are enlightened enough to want to know where their public contributions are being placed. Creating splits between the banking types seems to have two arguements;  should there be any future problems being split, they’re easier to be dealt with, whilst the counter argument is, it was the specialised banks which instigated the problems in 2008 and the universal banks were stable.

Complex problems require comprehensive explanation.

Business Week  -  Der Speigal -  Economic Times  -  And opinion

Image and Article credit: Copyright SUF 2012

 

In the hope of making something tasty for the economy to feast upon, one can only imagine the conversations that occurred during the process of creating something that has a bit of everything thrown in.

If ever there was evidence needed of Thick of It  goings on in Mr Osborne’s  department, the announcement of plans for a Government-backed ‘business bank’, to increase lending to UK companies, might be it.

 “Vee’re-a gueeng tu meke-a bunk?”, Mr O might have said, in a `Muppet-style Swedish Chef ‘ dialect to spice-up incomprehensible ideas because they’re rarely understood.  “Well we have tried, and we come up with jolly good names, remember Project Merlin?”, the advisers would encourage.  “Tag of ‘bank’ can’t do any harm. Tho, make it different from the credit schemes before; this time instead of giving tax-payers’ money directly to the banks for them to lend it back out, we could pass the loan applicants to the banks”.  “T- meke-a decishun.  Eff’en it’s a ‘no’, business bank will make a decishun….. Eff’en its a ‘no’, it will be passed out-a agin”  he might have continued. “Boot its nut reelly a bunk”, he’d confirm.

“Jolly good name tho’ : Business Bank, it could be run with a purpose, just like a business”.  After some thought he might have responded, “Yuoo meun Bunkroopt?”. The advisers overlooked what he’d said. “Indeed, in a speech delivered at Imperial College, London, Vince Cable called for the Government to be ‘more like a business’ by making strategic plans and sticking to them”.  “I hefe-a a plun…. und I’m steecking tu it!”   “Exactly! Perfect strategy sir, keep things moving. Err, would now be a good time to pencil in a discussion about direction?”  

Image and Article credit: Copyright SUF 2012

 

Being recognised as a caring, sharing company sounds better for business – It conjures up images of a big family ready to embrace you in their circle of products and services as they go about their daily activity of focusing on profit.  Interesting then to read an email sent to me with editorial-type articles – Including one from the MD of a major high street bank: quoting Churchill, pessimism and optimism, glasses half-full and half-empty…. and then a nifty self-promo of their product, along with the usual numbers-without-facts; Or rigorous statistical analysis or data. Which can, to some, be impressive stuff, things `getting better’, `enhanced services and offerings’ – These guys know where they’re coming from.

But it’s a bit disingenuous for a bank, at the centre of some major questioning about its own activities and context to be quoting Churchill out of context.  For me, that leaves more Unsaid than said – and what was said wouldn’t make a jot of difference to many people applying to them for funding – zilch, nothing – the cupboard can still be empty.  Many would say it’s impressive that such a high street bank is encouraging the small business to approach them, they like the sound of things going back to ‘normal’ because ‘normal’ meant before things changed.

Before the financial crisis there were small enterprises going about their business, holding tightly to the notion of value and doing the right thing. Before the financial crisis there were banks doing what banks did then, and still do now; Delivering for themselves.

Image and Article credit: Copyright SUF 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

 


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