Old MacDonald…….E, I, E, I, Owe You


A big welcome to all of you who are new recipients of our newsletter and thank you to all of those who have given feedback – we always appreciate honesty.

Old MacDonald had a farm… and on that farm he had a variety of hens. Some laid golden eggs, some chocolate, some Faberge, some fake.
He collected his eggs in a basket ( he only had one basket for many reasons, of which one is, this is a tenuous link to understanding how our finances can feel – thus he put all his eggs into one basket). Unfortunately at the top of the hill the basket tipped over and the eggs rolled away from him. Which eggs should he chase after first? Which should he let go?

By reacting and trying to get just one of the eggs back, he took control… and saved some of his eggs (this was the last lay of the season).

The business world has changed and the economic culture, in which we now exist amongst, is having variable effects upon us all. It is very easy for a general depression to seemingly hang in the air and, with the constant doom and gloom news coming at us from every angle, we can soon be discouraged. It takes effort and energy to be active.

Albeit not addicts, here at Step-Up-Finance, we have always respectfully admired the approach of E F Schumacher and the idiom of his most famous work‘s subtitle, Small Is Beautiful : Economics as if People Mattered. An encouraged strategy for our clients has always been the setting of financial objectives (as opposed to lifestyle goals) to achieve growth.

The direct opposite of an entrepreneurial attitude is to lament things that were and who’s fault it was / is. We may need a far better, and tighter regulation of the financial system, but, we also need better financial education of ourselves. People borrow, and spend thousands of pounds every year, without knowing the basics of real interest rates, compound interest rates, the impact of credit ratings and how their money can work for them.

The Quarterly Survey of Small Business in Britain, found small firms are the hardest hit, bearing the brunt of the economic downturn. Most businesses, in the survey, cited the current economic climate as their biggest concern, followed by cash flow, payments or debtors and government legislation. Being in in the privileged position of being able to speak with all types of business owners, SUF have listened to many stories. By taking a step back from a situation, business’ and individuals are able to see which of their eggs are rolling where . A fresh perspective enables the plotting of long-term direction whilst being reminded that honesty costs nothing …. but is priceless.

The Post Office’s Consumer Credit Report further illustrates the need to have financial goals as it cites that millions of consumers are still reliant on credit for day-to-day living costs. “In the current climate, many people have little choice but to rely on their credit cards to fund more expensive purchases…..people continue to rely on their cards for basic day-to-day purchases”.

Fiscal matters are almost as elemental as air and just as if we had difficulties in breathing we’d go and see a Doctor, finding a strategy to reach a financial objective requires an Independent Broker. Deciding what we want, the order of importance within a time frame and incorporating realistic limits to get the most effective results applies to us all, and part of that is choosing what to do, or choosing, as a strategy, to do nothing.

Market Update

Despite the overall gloom in the economy it is worth reiterating that lenders do have money and many are willing to lend, even when there is an existing relationship with a Bank. For example, recently a client was turned down by their Bank for short term finance to fund an important export order. However the order was able to complete and the contract was successful because there were other funding sources accessible. In the smoke-and-mirrors economic climate it is all too easy to loose sight of the facts. Personal mortgages, including 100% loans, and fast-track business finance solutions are attainable.

Other Musings…

Fiscal Tax Year is here again. Personal Allowance is being raised to £6475 for 2009-2010, that means each of us can earn an additional £440 pa before tax kicks-in. The HMRC website can be confusing, this other resource is an alternative explanation.

Starting or expanding a business is rarely easy, therefore Business Startup at ExCel London, 28/29 May, might just tick all the right boxes if you are looking to do either. Tickets are available by `phone or online… and they’re Free.

And finally…

If you have missed any of our March musings and snippets remember to take a look on our website  as these are updated regularly on the News and Views Tab……