Some fifty four pages of analysis, trends and developments across the economy are patiently explained and in a matter of fact manner, and inflation projections are translated by a patient and informative Agent…. yet, even with an A4 glossary, I left the meeting with my brain shrieking the same way it does reading isolated EBIDA figures.
I’d been to the Bank of England quarterly inflation report meeting where coloured diagrams and graphs that appear to go all over the place, at one brief point illustrating seismic waves for an earthquake potential, are shown.
There are no instructions for reading Inflation Reports (or EBIDA figures) and no warnings stating `This is an educated appraisal which contains potentially nuclear information, therefore as you may not be fully informed, you may experience a sense of foreboding’.
As financial needs for a business owner are as different as a full economic analyses and ‘our survey said’, or a single EBIDA figure heading up a report and the same figure coming after the pluses and minuses, although full analysis or single figure are created to give some clarity, without an accompanying mix of information that can set the full picture, and stop me feeling as though I’ve just swallowed something that tastes like lavatory cleaner spiced with Llama spit, they may as well be written in hieroglyphics.
As well as being at the heart of my business, the smaller employer is close to my heart (my grandparents and parents owned and were involved in operating smaller businesses, my extended family have local businesses or service-based businesses) and the non-corporate business is incredibly important to our economy. I don’t understand everything about the economy but….. Brace yourself if you’re of a nervous disposition about your business…. I’ll tell you what I do know…. and I’ll try not to be too graphic.
The day after the meeting when I got to speak with a mix of business owners and lenders’ people and I was unsettled, in a full-face Llama cleansing way. There was no mention of mention of the economy (…and some weren’t aware of EBIDA figures, single or full).
With that purple line, on the current B of E probability of inflation above target chart, being almost as straight as a straight road named Stagnation, unless those earthquake potentials are realised, interest rates are in a good place for businesses to set their stalls for their futures. And, because some lenders traditionally set their stalls as a ‘one size fits all’, being aware of EBIDA type metrics is an essential for the business that wants to successfully negotiate a way through finance and funding options for their future.
I’ve likely told you about the same as you’d tell me: there’s no explicit detail about what’s going to happen in the economy and as boring as it is for a cow to chew its cud, financial forecasting is a necessity.
Parts of our financial system haven’t changed; from the good ‘ol days of the local bank manager, through the dark days of the five horsemen of the apocalypse and into the IT platform future, they’ve just got a whole lot more value attached to them for anyone who wants to stay ahead of times that are-a- changing.
I can’t promise that, by understanding how the cash flows: the differing forms, uses and structures, seat belts would be needed for meteoric rises but I will say that small steps moving further away from running on empty is, when (as someone noted) ‘this is all temporary’ (would that be the same person who said ‘who knows what tomorrow will bring’?), a way to get an extra gear …. which, as far as I can tell, is better than being stuck in first gear when you’ve an irritated Llama closing in.
Trackbacks/Pingbacks