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Business Development & Marketing Cash Flow & Forecasting General Rescue, Restructuring & Recovery

Will proposed relaxation of planning laws revitalise construction?

Last month the Government announced that it would enact legislation to relax planning laws so that full planning applications will not be required to demolish and rebuild unused buildings making it easy to convert commercial and retail properties into residential property. This could be the key to a swift revival of high streets and town centres by repurposing existing property.

If approved these new rules should come into effect in September.

The Government is also proposing to reform England’s planning system, it claims, “to deliver more high-quality, well-designed homes, and beautiful and greener communities for people to live in.” although the details have not yet been made public.

On the face of it, if the rule changes do become law this will be a significant boost to construction and building companies and suppliers, like us, of building materials.

Presumably, also, developers could benefit from a relaxation of the planning conditions that often accompany such projects, whereby local authorities can make planning consent conditional on the provision of a proportion of affordable housing or other community amenities via a Section 106 Agreement.

In answer to concerns raised by such bodies as the Council for the Protection of Rural England (CPRE) and the Local Government Association (LGA) that it will lead to a decline in standards, the Government has said that the measures are designed to cut out bureaucracy “to get Britain building” but will also protect high standards: “Developers will still need to adhere to building regulations.”

It has also pledged that pubs, libraries, village shops and other buildings essential to communities will not be covered by these new flexibilities. This will help avoid the decline of village and community life by preserving local amenities although most local libraries and many pubs have already closed.

Although a controversial initiative, we believe this would be a welcome boost for construction and associated industries and for employment through the jobs it will create. What do you think?

Has your business struggled as a result of the Coronavirus Pandemic? Are you having to consider redundancies as the Furlough measures are scaled down?  

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Banks, Lenders & Investors Business Development & Marketing Finance General Turnaround

The pros and cons of an infrastructure boost post pandemic

infrastructure boostThe UK Prime Minister has signalled a massive infrastructure boost to help the country’s economy to recover post pandemic.
The details and plans for allocation of money are likely to be fleshed out in the autumn but in a speech at the end of last month he indicated that more than £5 billion would be spent on infrastructure projects, many of them in northern and central England as part of his pledge to tackle the imbalance between London and the South and the more deprived regions.
The projects will include spending on hospitals, roads, railways and schools, including what are called “shovel-ready” projects to help businesses and individuals to recover and address the expected mass unemployment.
Business directors should be planning now to take advantage of the proposals, especially those in the construction and tech sectors that are likely to be recipients of the government money.
I know of at least one company, supplying a unique range of thermally efficient, environmentally-friendly products to house builders, which is already well-placed to grow post-Coronavirus to supply its Passivhaus compliant insulated foundation and walling systems.
The government initiative does however highlight some issues that are associated with ambitious plans that are announced without thinking them through.
In his speech, the Prime Minister promised to simplify the planning system and regulations to speed up the process.
Unless some thought and care is put into how the infrastructure boost is carried out there is a risk that the initiative will undo what little progress has been made to reaching promised environmental targets.
For example, while improving the road infrastructure is needed in some parts of the country, it is likely to increase the numbers of vehicles on the roads and in turn will contribute to an increase in CO2 emissions and global warming.
In fairness, the PM did also promise to “build back greener and build a more beautiful Britain” with a commitment to plant approximately 75,000 acres of trees every year by 2025. He does like his promises.
It may also be the case that ambitious infrastructure plans fail to meet the objectives of creating a large numbers of jobs. It is likely that businesses will be looking to find ways of reducing their dependence on labour investing in and more automation and technology-driven ways of working.
These are points highlighted by the economist Joseph Stiglitz who argues that there are infrastructure spending risks but also acknowledges that “well-directed public spending, particularly investments in the green transition, can be timely, labour-intensive (helping to resolve the problem of soaring unemployment) and highly stimulative”.
It is clear, however, that directors will need to find innovative ways of delivering the proposed infrastructure while at the same time also promoting their “green” credentials.
#infrastructureboost #economicrecovery #construction #techinnovation

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Banks, Lenders & Investors Business Development & Marketing Finance General Turnaround

Is commercial property investment no longer a safe haven?

commercial property a safe investment?Commercial property pre-pandemic was considered one of the more secure options for money by investors, particularly by pension fund managers.
But the consequences of changing consumer behaviour, the aftermath of the pandemic lockdown and the retail High Street revolution would suggest a pause for thought and perhaps a rethink.
While the most obvious sector of business related property to be in trouble is retail it may prove not to be the only one.
Retail has been hit by a significant move to online shopping that has been building for several years, but it is also beset by what has been called an archaic rental collection system, whereby rents are payable quarterly.
The most recent Quarter Day was on 24th June (Midsummer Day) and it has been estimated that in the region of just 14% of retailers were paid their rent that day.
It was no surprise, therefore that Intu, owner of some of the UK’s biggest shopping centres, such as Lakeside and Manchester’s Trafford Centre called in the administrators the day after the Quarter Day.
Intu had been struggling even before the lockdown as a result of a list of store closures announced throughout the year so far, including well known names such as Warehouse, Oasis, Monsoon, Quiz, Pret A Manger and others. It has been estimated that in excess of 50,000 jobs have been lost in the sector so far.
The lifting of lockdown in retail is not likely to help to restore the High Street’s fortunes given the restrictions and limitations shops have had to impose to ensure customers are safe from infection.
But commercial property is not only about retail.
Lockdown meant that many businesses had to close their offices and again, they have only been able to re-open amid considerably changed circumstances for safety reasons.
Not only this, but many previously office-based businesses have discovered that their employees can work efficiently and often more productively from home and have therefore they have been reviewing their business models to enable employees to carry on working remotely.
Where they have a need for some employees to be in the office at least some of the time, they have introduced rigorous sanitisation measures, abandoned such practices as hot desking, installed safety screens at more widely-spaced desks and introduced flexible working so that employees no longer have to arrive or leave at the same time. Much of this is aimed at helping staff avoid travelling on crowded public transport but it is  also a recognition that flexibility is benefitting both employers and employees.
The trust issue assumed by management has also largely been allayed; indeed staff have tended to work harder at home than they did in the office with few companies experiencing any loss in productivity. I would argue that requiring staff to work in the office was never a trust issue but more one related to the egos, status and security of managers who need the reassurance of having staff on hand; nothing to do with employees’ ability to work.
Inevitably, the successful experiment will mean that many businesses no longer require such large commercial premises and will terminate leases as soon as possible to downsize the space needed.
Indeed I know of two large professional firms who were about to move into larger offices in the City when the lockdown hit, fortunately for them they hadn’t signed the lease and have since decided then no longer need larger premises since everyone has worked perfectly well from home.
Furthermore less space will be needed as the recovery to pre-lockdown levels is looking unlikely.
Earlier this year McKinsey produced a paper full of advice for private equity and investors in commercial property about the radical changes they would need to consider for the future.
“Many will centralize cash management to focus on efficiency and change how they make portfolio and capital expenditure decisions. Some players will feel an even greater sense of urgency than before to digitize and provide a better—and more distinctive—tenant and customer experience.”
And this was just the start!
It went on to suggest that commercial property owners, especially in B2B environments, will have to change their behaviour and “engage directly with tenants. They should follow up quickly on the actions they have discussed with tenants. Not only are such changes the right thing to do—they’re also good business: tenants and users of space will remember the effort, and the trust built throughout the crisis will go a long way toward protecting relationships and value.”
However, the report does suggest there will be some commercial property niches that could benefit from the pandemic upheaval, such as commercial storage, and in time there may be others.
There is no doubt that the nature of the commercial property market is changing, but it is perhaps premature to predict its demise.
#commercialproperty #safeinvestmnent #propertymanagement #commerciallease
 

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Business Development & Marketing Cash Flow & Forecasting Finance General Turnaround

Business triage involves allocating limited resources to achieving realistic outcomes

Business triage prioritises the most urgentBusiness triage refers to the process of prioritising work in a crisis when there is more work to do than resources available to do it. The aim of triage is to maximise the outcome and minimise the damage by being realistic about what can be achieved with limited resources.
It is more commonly understood in the medical context, usually in response to prioritising treatment of casualties following disasters or other emergencies.
According to Investopedia, in a business context, “Triage helps companies by enabling them to attend to emergencies quickly, but it also poses risks, as it tends to involve the elimination of certain time-consuming steps that are normally part of the workflow”.
While business triage is normally associated with decision-making and action a crisis, its principles can also be applied to all forms of transformational change.
In my last blog I advised directors that now is a good time to conduct a strategic review of businesses in order to prepare for a resumption of activity as the Coronavirus lockdown eases.
The review may well have revealed processes, and products or services that are no longer viable as well as potential future opportunities and you may be considering re-organising your business to reflect this.
For some of you this may be urgent and you will be embarking on the business triage process to determine the changes you need to make to reduce overheads, perhaps your workforce, and to re-organise the whole business process.
The warning about the risks involved is therefore timely.
If cash flow has plummeted and staff have been furloughed your business may have been relying on reserves, CJRS (Coronavirus Job Retention Scheme) and CBILS (Coronavirus Business Interruption Loan Scheme), but reserves may be running down and furlough schemes are being phased out. And, sooner or later the loans will have to be repaid.
These are all important considerations for business triage as you prioritise cash flow by reducing overheads, perhaps by make some staff redundant much of which may be necessary to survive. Once survival is guaranteed then you can consider future plans but for the moment it is important to be mindful of the costs involved, particularly, but not only, of redundancy.
The aim of the business triage process is to emerge as a leaner and fitter organisation, more resilient and more efficient, with processes targeted on the most profitable parts of your business.
Many directors have some tough decisions to make and these will require judgement about priorities and affordability such that they may need to bring in others with the experience of making such decisions.
Both a failure to make decisions early and a failure to make the right decisions may mean that your business won’t survive.
#Triage #Businesstriage #Decisionmaking

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance General

As businesses resume operations it’s a good time to take stock with a strategic review

a strategic review helps your business move forwardI would normally be recommending a strategic review of your business at this time of year, when activity slows down for the holiday season.
This year, of course, things are very different because of the pandemic lockdown but as you resume business activity my advice remains the same because a strategic review will help you to identify the resources, costs, opportunities and capabilities that will help your business move forward.
It may be that carrying out a review will help you identify new products or directions in which you can take your business as in a changed economic landscape innovation is likely to be a key to future success.
A business needs to be sustainable and profitable so firstly you need to identify the resources that are already available to you and these can be divided into physical resources, human resources, intellectual resources and financial resources.
To use the example of a manufacturing business, physical resources would include equipment and inventory and manufacturing plant, but also the premises, if the business owns them. However, over time for all their longevity such assets as manufacturing plant can become obsolete or inefficient and it is important to plan for when their lifespan will run out and for updating them perhaps with automation to improve efficiency.
Human resources will include existing employees and their skills, perhaps suppliers with whom you have a long-standing relationship, the board of directors and shareholders if any. Do you have the right skills and capabilities in the organisation to help it move forward, perhaps even in a new direction?
Intellectual resources include any processes or products that are already protected by patents, anything emerging from research and development or perhaps potential demand for a new but related product identified via marketing activities or customer research. The talent within your business could also be potentially an intellectual resource.
If you have identified a new product or direction for the business it is important to establish as far as possible how much it is likely to cost and where you may need to invest to turn it into a reality so current costs are an essential element in the equation.
If reflections during lockdown or insights following a strategic review give you ideas for a new direction you will need to know your business’ financial position to fund working capital and afford any investment so forecasting your cash flow is imperative as your reserves may be have been depleted by the lockdown and you may need further finance.
Doing your homework now while business activity is still quiet could make all the difference to a successful business development.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance General

Directors should be mindful of future investment and changing values post pandemic

future investment and changing valuesBusinesses planning their post-pandemic strategy are likely to be seeking future investment to shore up their balance sheets but directors will need to be mindful of the changing values of stakeholders and in particular those of their customers who in turn are influencing investors.
Before the immense disruption caused globally by the onset of the pandemic, climate change, global warming and the need for a more sustainable form of economics were a major preoccupation.
That preoccupation has not gone away.
While physical attendance at a second summit on ethical finance by international delegates from Government officials, financial institutions, consumer goods corporations, supply chain intermediaries and conservation organisations planned for Edinburgh this month has had to be cancelled, it has now been replaced by a virtual summit.
And this month, the UK’s Investors Association published a paper on the future of investment in which it, too, identified the importance going forward of ethical investment highlighting:
…“Increasing importance of sustainable investment. There is growing customer emphasis on the material impact of sustainability issues on financial returns, notably among institutional clients, as well as a more prominent focus on setting non-financial objectives (for example, to invest in companies and projects that have specific social or environmental benefit).”.
The focus and emphasis among investors is very much on CSR (corporate social responsibility), or its replacement ESG (environmental, social and governance) which is becoming the criteria for oversight of behaviour and values and holding companies to account.
Changing consumer values have been highlighted by others, including the retail “guru” Mary Portas, who has been promoting what she calls the “kindness economy” where, she argues, that shoppers may now be more alert to how businesses treat them, their workers and the planet.
Former BoE (Bank of England) governor Mark Carney also referred to this growing awareness in an article in the Economist last April, where he said that “fundamentally, the traditional drivers of value have been shaken, new ones will gain prominence” and where “public values help shape private value”.
These are issues that company directors will need to be mindful of when formulating their post-pandemic business plans, especially if the plans involve securing future investment.
Returning to pre-pandemic “normal” is not likely to be enough for business survival as the desire among both investors and consumers is for more ethical values and this has not been eroded by the pandemic.

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Business Development & Marketing Finance General

Protecting your business from technology post-pandemic

technology comes with risks as well as rewardsLast week one of my blogs highlighted the growth opportunities to businesses of adopting new technology post-pandemic.
However, businesses, like consumers, can also be vulnerable if you do not take steps to understand and control the adoption and use of software and technology in your company.
Already, reports have emerged of new scams specifically related to Coronavirus. They have resulted in consumers being promised delivery of products for which they have paid but which subsequently discover do not to exist.
Then, there have been the scams to remote workers related to fake contacts from alleged payroll departments and internet service providers asking for personal information, according to TSB Bank.
But in a business context, while digital technology has been embraced to make it easy to continue to work during the pandemic lockdown, in the future how and what technology is used needs to be carefully considered and integrated with business processes going forward.
The temptation may be to “start to build resilience in their businesses by complementing product-focused models with scalable and stable digital alternatives” such the remote hosing of data and the use of third party software tools and AI as explored in an article in information age on potential business technology opportunities.
The article suggested that there will be an increase in B2B initiatives to adopt “smart and quick ways to slash costs and monetise existing assets”.
But the essence of business is competition and this suggests increased opportunities for industrial espionage and hackers unless you take considerable care to protect your business.
Those unfamiliar with the technology are likely to be vulnerable through their lack of knowledge or understanding. Tech is a highly specialised area where few directors are knowledgeable about its vulnerabilities and drawbacks.
Companies will need such specialists and ideally someone in-house to be sure their systems are robust and protected from such potential threats.
You should carry out due diligence on your digital service providers and protect yourself with robust legal contracts although for many online providers this may be impossible such that small businesses in some instances might be advised to avoid certain providers.
Using AI, “smart” cloud storage and other digital technologies to improve efficiency and cut cost has many benefits but only if such systems have back-ups and tight security controls as protection.
 

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Business Development & Marketing General

The future of global sea freight transport post lockdown

sea freight faces a difficult futureThe words “new normal” have become something of a cliché in predictions for a post pandemic world but there is little doubt that global sea freight transport is likely to be very different for some years to come.
Even before countries started closing their borders and taking other measures to protect citizens from Coronavirus the sea freight industry was facing pressures.
Much of the pressure relates to concern by the IMO (International Maritime Organisation) about the industry’s impact on the environment and specifically its use of sulphur oxides which is harmful and is considered to be the cause many premature deaths.
From January 2020 the IMO had imposed new emissions standards designed to significantly curb pollution produced by the world’s ships which will be no small feat given estimates that more than 90% of the world’s trade is carried by sea.
To achieve this target, it proposed to ban shipping vessels using fuel with a sulphur content higher than 0.5%, compared to the present upper limit level of 3.5%.
The challenge is immense since the commonly used marine fuel has a sulphur content of around 2.7%.
The move is generally predicted to be likely to add to shipping costs.
However, an even more significant factor has come into play with the advent of Coronavirus which has highlighted individual countries’ vulnerability to their dependence on global supply chains.
As a result, there have been calls for a revival in UK manufacturing and the onshoring of the manufacture and processing of critical products, such as medical supplies and pharmaceuticals, among others.
At the same time, there have been calls from more than 200 top UK firms and investors who demanding that government deliver a Covid-19 recovery plan that prioritises environmental initiatives that tackle climate change and propel a “green” economy.
It has been argued, notably in an article in the Economist, that globalisation was “in trouble” even before the pandemic took hold.
Then, argues Prof Richard Portes, professor of economics at London Business School, “Once supply chains were disrupted [by coronavirus], people started looking for alternative suppliers at home, even if they were more expensive.
“If people find domestic suppliers, they will stick with them… because of those perceived risks.”
While inevitably there will be a need for global sea freight transport once things return to ”normal” it would seem likely that the volume of freight moved by sea will be considerably reduced.

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Business Development & Marketing Finance General Turnaround

Tech offers growth opportunities post lockdown

groth opportunities post pandemicIt is likely that there will be many growth opportunities for companies to embrace the use of technology after the Coronavirus lockdown.
Many organisations and businesses have had to switch to a remote way of continuing to provide their goods and services and this has affected everything from medical consultations to teaching, even more online shopping and whole offices now remote working.
Having discovered that it is possible to function in this way it is likely that many will carry on doing so when restrictions are eased and this will provide growth opportunities for tech companies.
Among the beneficiaries already have been providers of online tools including conferencing facilities, such as Zoom, Microsoft Teams and Skype, productivity and project management tools like Asana and Trello and online collaborative and co-creation tools like Miro and MURAL.
But for all their benefits there are also caveats in terms of speed and reliability of broadband, security and protection from intrusion or hacking.
Particularly in the area of providing public services such as health care or education there are also concerns about democracy and the uses to which authorities could put all the data that is gathered, as the writer and activist Naomi Klein has pointed out in a recent article
Security is also likely to be an issue for businesses, not only regarding online financial transactions but also in building resilience into their supply chains.
Ernst and Young has identified growth opportunities in a recent report that also advises directors on how to address some of the potential concerns.
It identifies opportunities for companies to embrace technology:

  • New and more efficient ways of working and living means growth opportunities for companies including the tech companies that provide improved and more secure infrastructure for customers;
  • Retrofitting by design for those organisations that have adapted during the pandemic but plan to continue using their new working processes in the future;
  • Reimagining the seemingly impossible, such as the provision of robotic support to the healthcare sector.

But for the most innovative companies there are likely to be growth opportunities for updating business processes in some instances in products using technology, some of which have yet to be imagined.
The EY advice to directors of all businesses when planning the way ahead is:

  • Challenge all legacy technology, frameworks, infrastructure and how things have been done in the past;
  • Encourage new ways of technology-driven work to drive flexibility, efficiency and productivity;
  • Invest in both personal and business research and development, innovation and learning about technology;
  • Hire people with technology skills, including software engineers, developers and data scientists;
  • Grow the organization’s ecosystem and establish alliances with innovative companies, entrepreneurs and start-ups;
  • Innovate and automate now for the future.

All of the above should provide growth opportunities for imaginative companies in the years ahead.
 

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Banks, Lenders & Investors Business Development & Marketing Finance General

Is it time to stop propping up traditional so-called UK Key Industries?

UK Key industries of the futureThe main UK Key Industries are often still considered to be aviation, aerospace, steel and car production.
As a result of the Coronavirus pandemic and subsequent lockdown the UK Government is working on a plan, called Project Birch, to provide short term bail-outs to those companies “considered strategically important” to the national economy.
However, how to define strategically important? Is it in terms of their contribution to UK GDP (Gross Domestic Product), or to the number of jobs they account for, or to their ability to be viable and profitable businesses that can operate in more normal times without state aid?
It would be reasonable for a Government to consider a business to be strategically important in terms of employment during a crisis, such as now, especially given that some of the above-mentioned Key Industries are in parts of the UK where there is traditionally high unemployment with few alternative job sources, especially when whole communities are dependent on a major manufacturer.
This would apply to the car industry in the North East and to the Steel Industry in South Wales.
However, given that many are foreign-owned, there is little certainty that their owners will invest in them for the future benefit of UK, and often their commitment to keeping them open is in doubt, as previous negotiations for Government help have already demonstrated. It is therefore questionable whether they should be regarded as UK Key Industries in the medium and longer term.
According to the ONS (Office of National Statistics) the UK Key Industries today are in the services sector, including banking and finance, steel, transport equipment, oil and gas, and tourism: “the services sector is the largest sector in the U.K., accounting for more than three-quarters of the GDP”.
So, as former Treasury minister and architect of the Northern Powerhouse project Jim O’Neill has warned, any short-term bail-out of the UK Key industries identified in Project Birch as strategically important must be linked to strict conditions: “If the lion’s share of the equity is simply going to preserve jobs at any cost, that’ll ultimately just add to our weak productivity problem,” he said, in an article in CityAM.
It is a point echoed in an article in the Financial Times about the UK’s “age-old” problem of identifying winners and losers. In my view there are still far too many zombie and borderline insolvent businesses in the UK; most of them have been propped up by lenders not wanting to write off their debt, not because they will contribute to the future of UK PLC.
My blog on Tuesday focused on the opportunities for business innovation that are likely to come post-Coronavirus as a result of changed priorities for consumers and investors towards a greener and more sustainable economy rather than a largely consumer-oriented one.
Perhaps in orchestrating an economic recovery it would be wiser to focus on stimulating and investing in new and innovative businesses and in re-educating and training the workforce for the future and not leaving them untrained and propping up the past.
Identifying new potential UK Key industries, such as pharmaceuticals, innovative technology and the manufacture of sustainable new products is imperative for our future prosperity instead of propping up ailing industries simply because they employ large numbers of voters.

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Business Development & Marketing Cash Flow & Forecasting General Turnaround

Directors should plan for innovative UK manufacturing to revive their businesses post-Coronavirus

UK manufacturing innovation UK manufacturing was in dire straits even at the onset of the Coronavirus lockdown, with the CBI (Confederation of British Industry) reporting output dropping at its fastest pace since 1975 in the first quarter of 2020.
As it progressed the pandemic and lockdown revealed many weaknesses in the global supply chain, most notably in the availability of PPE (Personal Protective Equipment) for frontline health and care workers.
However, it is often said that in disaster there are also opportunities and many businesses demonstrated their agility in switching their usual production to manufacturing both PPE and sanitising equipment, for example.
But, as attitudes change, so the opportunities for innovation increase and it is a good time for directors to start planning strategies for not only producing essential supply chain elements within the UK but also for devising new products to fit the new agendas.
The UK Government has announced two initiatives aimed to protect UK business and promote innovation, Project Defend and Project Birch.
Project Defend aims to identify and protect vulnerabilities in business supply chains, with project leader Liz Truss recently describing three aims: reducing the use of suppliers from countries seen as “unreliable partners”; encouraging UK manufacturing; and, stockpiling key items such as medicines and components.
Project Birch is a short term initiative whereby the Government will “temporarily guarantee business-to-business transactions currently supported by Trade Credit Insurance, ensuring the majority of insurance coverage will be maintained across the market” potentially until the end of the year.
Meanwhile support for a recovery plan with projects that support the environment has been given added impetus with a letter to the Government from 200 businesses urging it, among other things, to drive investment in low carbon innovation, infrastructure and those industries that support sectors covering the environment, increase job creation and recovery.
All this should encourage UK manufacturers to think in terms of innovation rather than striving to recover their existing operations.
A report by McKinsey in 2019 in the context of post-Brexit UK business and supply chains identifies several key issues directors should consider when planning their strategy for the future. Their findings are relevant in the current post-Coronavirus recovery context.
The key issues for directors, it says, will be to: redefine their sourcing strategy; revisit their footprint; review inventory build-up; and, crucially adjust their product portfolio to exploit their capabilities and experience.
I know of at least one company, supplying a unique range of insulated, environmentally-friendly products to the construction industry, which is already well-placed to grow post-Coronavirus as the Government seeks to stimulate the economy, jobs and housebuilding. Build Homes Better proposes to use its technologically advanced products to build environmentally and energy efficient housing based on its rapid building system. Check them out at https://buildhomesbetter.co.uk/
The time has never been better for a revival in UK manufacturing with innovative solutions for both new products, developing a greener economy and for strengthening the in-country supply chain.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance General

A complex jigsaw puzzle for directors in planning a post-coronavirus retail strategy

the retail strategy jigsaw puzzle As more restrictions are relaxed, allowing increasing numbers of retailers to re-open, directors have many issues to consider when planning their retail strategy for recovery.
Given that High Street retail was already in serious trouble, directors need to address a number of complex questions to assess their chances of survival and develop their retail strategy for reopening, short-term survival and growth.
This will include understanding and meeting the interests of many stakeholders including customers, staff, suppliers, landlords, investors and regulators.
Reducing overheads is likely to be key, given the need to include social distancing measures that will inevitably limit numbers in-store at any one time, thus reducing the number of transactions that can be achieved in any working day. This raises the question of whether or not the business is viable as it needs sufficient revenue to cover the cost of staffing, utilities, rent and related premises expenses while also generating profits.
Customer behaviour and changing attitudes are also likely to be a key factor that will determine retail strategy.
Even before the lockdown there was clear evidence that shopping online was increasing dramatically where those retailers that had introduced online with delivery or click and collect were generally surviving rather better than those that had not. Research by the accountancy and business advisory firm BDO has indicated that online sales rocketed in April by 109.6% compared to last year, although this did not factor in the loss of high street sales caused by the lockdown.
However, there has been much talk of a “new normal” post-Coronavirus and Mary Portas, the retail guru, has highlighted this in her suggestion that post lockdown will bring a “new era of shopping and living” which she calls the kindness economy in which shoppers will search for brands that reflect their values. Environmental and ethical concerns were already becoming increasingly important before the coronavirus pandemic and they will almost certainly continue to be a growing factor.
In addition, consumers will have less disposable income given the likely job losses although it is not yet clear how disposable income will be deployed if restrictions remain for mass events, leisure, travel and holidays. Certainly, being confined to home has encouraged a shift in consumption and again it is not clear if these will be permanent such as surviving without spending on disposable fashion, for example.
Accessibility to high streets may also change now that people are being encouraged to walk and cycle more and drive or use public transport less. Will this impact on shopping habits with shoppers making fewer, and more considered, purchases, not least because they will have to be carried home if not bought online?
All these considerations will weigh heavily on directors planning their future retail strategy and will likely mean convincing shareholders, lenders and suppliers to think long-term for a return on their investment.
The question is, can directors fashion all these competing interests into a retail strategy to ensure survival and growth in the future?

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Business Development & Marketing Cash Flow & Forecasting Finance General Insolvency

Are you prepared for the next crisis?

crisis preparationFinance may be a primary consideration but it is not the only cost to a business in preparation for a crisis.
Being ill-prepared can damage the relationship with customers and employees, and ultimately, if the crisis is badly handled, it can damage the business’ reputation.
Complex, fast-moving threats to organizations can happen at any time, so being prepared for a crisis is about having the right people having been trained with communication tools and strategy in place ahead of an inevitable yet unforeseen event.
Business management consultants Mossadams produced a useful cost management guide to dealing with a crisis in April 2020, which sets out six elements to pay attention to. These are strategy (covering a customer analysis, product mix, recovery plan and financial forecast), assessing operating models, the trade-off between risks and opportunities, a situation analysis and a financial analysis.
According to the Harvard Business Review “When companies seem ill-prepared in the face of a crisis, the first question people ask typically is, “Where was top management?”
Ideally, it advises, boards should dedicate a block of time each year to better understand and prepare for major threats to the business.
It advises that boards should have both a strategy and a core team at board level trained and ready to deal with the crisis itself, as exemplified by the UK Government’s Cobra (Cabinet Office Briefing Room) group.
Of course, for a business facing a crisis the key is to take control of the messages and immediately review finance. While directors might worry about a hit to profits, in fact they should first and foremost have a plan in place for controlling expenses and for protecting and managing cash flow. Of course, ahead of the event it is wise to build up some financial reserves and to avoid taking on debt wherever possible. The less outside funding a business has to sustain when dealing with a crisis, the better.
Part of preparation for a crisis, however, and arguably as important, is the way it handles its messaging and nurtures the relationships crucial to its continued existence.
Stakeholders, customers and employees are likely to be panicked and worried about their future so communication is essential, not only to keep people informed and reassured in the present but also to protect the business’ future once the crisis is over. Indeed, critical to any crisis is to plan for emerging from the crisis so that the business does not remain in crisis mode.
In a crisis, everyone becomes acutely aware of the behaviour of others. This is therefore a key factor for reassuring stakeholders.
In this context, it really is a case of leading by example, so, perhaps it would be unwise for a business to pay out dividends to its CEO, when others are having their working hours cut or suppliers are receiving fewer orders because a business is scaling back activity..
The lesson is that preparation for a crisis is infinitely preferable to being faced with reaction without it.

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Business Development & Marketing Cash Flow & Forecasting Finance General Insolvency

Potential Coronavirus pandemic business winners and losers

winners and losers in business after lockdownGiven the slight easing of Coronavirus-related restrictions a week ago, some businesses are in the very early stages of preparing to return to “normal” but which businesses are likely to emerge as the winners and losers in the future?
The Insolvency Service is now publishing its figures monthly and the April figures were released last week. They reported that “numbers of companies and individuals entering insolvency in April 2020 broadly returned to pre-lockdown March levels for most insolvency types” and their figures showed that total company insolvencies in April 2020 had decreased by 17% when compared to April 2019, with a total of 1,196 company insolvencies of which the majority were CVLs (Company Voluntary Liquidations). These numbers suggest no influence in insolvency from Coronavirus yet.
The figures come with a warning, however, that the operation of courts and tribunals had been much reduced, HMRC had reduced enforcement activity and there were likely to have been delays in documents being provided to Companies House by insolvency practitioners.
There is some illuminating data from Cebr (Centre for Economics and Business Research) which showed lost output figures, which include 50% in construction, 58% in wholesale and retail, 79% in accommodation and food services, and 81% in arts, entertainment and education. Communication and information, however, is down just 7% and professional and scientific activities are down just 10%.
Perhaps worse are the UK Composite PMI figures which are an indicator of health for manufacturing and service sectors and reported 13.8 in April, down from 36 in March which in turn were down from 53.3 in January. A reading of above 50 represents expansion and below 50 represents contraction where the lowest figure in the last three years was 49.2 in July last year when industry was gloomy about Brexit.
Of course, there is a long way to go before the picture becomes any clearer and the above is just a snapshot at a specific point in time.
Nevertheless, there are some clues to possible future businesses winners and losers and some of this depends on how deep-rooted the changes are in people’s behaviour as we emerge from the crisis.
Clearly, the lockdown has particularly affected the travel, holiday, retail and hospitality sectors as well as theatres, cinemas and the like. The question is whether these will be able to survive for much longer despite the various financial support packages, especially when they still have rents and other overheads to pay.
Similarly, commercial landlords may be affected as it has become clear that many businesses can operate with employees working remotely. According to the BBC last week “Many companies are struggling to pay the rent with 63% collected within 10 days in March and early April compared with 94% a year ago.” It also reported “Office and retail landlord Land Securities has said less than 10% of its office sites are being used as people work from home. This is unlikely to lead to a closure of 90% of offices but it highlights scope for huge cost reduction by businesses
In the meantime, such a rent burden is a major factor for the survival on many businesses and most likely will result in many companies going bust.
Another potential longer-term loser may be the cruise industry. Will people feel comfortable taking holidays on a large ship in a confined space in close proximity to hundreds of others?
While there may eventually be some recovery in the travel and holiday sectors once countries open their facilities and airlines are permitted to resume operations, the question is whether they will ever return to their pre-pandemic volumes since this will dependent on consumer confidence as well as affordability given the likely increase in travel costs and the fact that many people will lose their jobs.
To an extent, also, there is a question mark over the viability of airlines if they have to introduce some social distancing measures and cannot cram their cabins to maximum capacity.
The weaknesses that have been exposed in the global supply chain may also have a negative impact on freight transport.
But this last gives a clue to potential future winners among the business winners and losers.
It is possible that manufacturing may be brought back to UK and more stock will be stored here as a result of the exposed supply chain issues, which may well boost various types of local production and by extension the construction industry which will have to build the greater capacity that will be needed. Indeed, this in turn may benefit those parts of the country that were devasted by the closing down of industry during the Thatcher years.
Similarly, the UK’s pharmaceutical industry and research may become a winner as the search for a Coronavirus vaccine continues, not to mention worries about its availability if one is ever devised, and the Government has already announced £93m to help speed up the construction of a not-for-profit Vaccines Manufacturing and Innovation Centre in Oxfordshire.
The lockdown has also exposed the amount of pollution that had been generated previously and may bring an upsurge in greener energy production.
According to the Guardian last week, “Britain’s biggest green energy companies are on track to deliver multibillion-pound windfarm investments across the north-east of England and Scotland to help power a cleaner economic recovery.”
Another loser is likely to be the car industry as I cannot see as many cars being needed in a future if more people work from home and unemployment rises.
Finally, given the exhortations for people to find alternative ways of getting to work, such as cycling or walking, as lockdown is eased it is possible that another winner could be bicycle manufacture and the retail outlets that provide both bikes, accessories and aftercare.
There will undoubtedly be business winners and losers but the scale of fallout will only emerge when the future becomes clearer. The above are just some preliminary suggestions.
 

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Business Development & Marketing Cash Flow & Forecasting Finance General

How will work patterns change once Coronavirus restrictions have eased?

work patterns changingWhen working life resumes properly once Coronavirus restrictions have eased people may find that their work patterns are substantially different from previously.
While, sadly, some SMEs will not have survived others may find that their agility and perhaps new innovations introduced during lockdown will have given their businesses a new lease of life for the future.
Those who have shown consideration for their employees, suppliers and customers will have built up a level of goodwill that will stand them in good stead for the future.
I shall examine in another blog those businesses, sectors and processes that may benefit from the changed landscape but in this blog I am focusing on the likely changes to business work patterns and the relationships between employers and their stakeholders.
Because, of course, employers are also people, they will have discovered that they and their families are no more immune to the health risks of the pandemic than any of their employees.
This may well result in an increase in empathy between people at all levels and result in closer and more considerate working relations.
Indeed, an article in Forbes highlights this among the many beneficial changes in work patterns likely to be the result.
It identifies key positives that could result including increased support from businesses for employees: “Companies have been forced to consider employee wellbeing more holistically—in terms of not only the physical, but also mental and emotional wellbeing.”
Employees may find that their employers are much more aware of their different family responsibilities and more understanding of the ways family and friends are critical to life and happiness.
At a more basic level, if employees are to return to their workplaces, their health and workplace safety will be a high priority, suggesting an end to hot-desking, for example, leading to safer workspaces.
Desks could become spaced out, partitions could go up, cleaning stations stocked with hand sanitizer and antibacterial wipes will become the norm, and workers may seek out new places for focused work.
At a more basic level, safe travel to work may mean more people cycling or walking and less use of public transport, which is something that employers may have to take into account.
Dealing with the crisis, Forbes argues, could result in more effective leaders, especially those who “communicate clearly, stay calm and strong, demonstrate empathy, think long-term and take appropriate decisive action.”
Arguably, it says, relationships with teammates will also be stronger and closer after people have faced a common enemy.
New work patterns will also allow for more diversity and flexibility where businesses have discovered that it is perfectly possible to run effectively with employees working remotely, perhaps also having discovered new skills and strengths among their employees as a result.
Similarly, the new “normal” may have made it clear how few physical meetings are actually needed compared to pre-pandemic working life. This may well lead to employees’ work patterns involving far less bureaucracy and offering more opportunities for them to innovate and suggest ideas for future development.
It may also lead to greater use of new technology based on the new skills learnt while in isolation lockdown at home.
Savvy SME owners will be those who assess the good things that have come out of the crisis and incorporate them into more flexible work patterns for those valued employees who have stuck by them in difficult times, to the benefit of both the business and all those who work in it.
 

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Business Development & Marketing Cash Flow & Forecasting Finance General Rescue, Restructuring & Recovery

Is it likely that there will be a permanent change in people’s behaviour post lockdown?

post lockdown behaviourHow people’s behaviour might change post lockdown is something that may be crucial for SMEs in planning ahead.
While it may be a long time yet before the Covid-19 lockdown is removed completely, following the Prime Minister’s briefing at the weekend, the process of relaxing the lockdown restrictions is now underway.
Despite the financial support that has been provided to businesses and workers it is becoming clear that we shall not return swiftly to a pre coronavirus level of business for some time and before we do many businesses will not survive, especially if the recovery takes a long time and the post lockdown landscape is substantially different.
Much depends on businesses’ ability to recover, on how long it will take them to recover and on how much people will change their behaviour as a result of the crisis.
A key to business survival is communication by leaders to deliver the information and direction everyone needs when a large scale crisis hits. While they are unlikely to know the answers, leaders reassure everyone by sharing facts and the rationale for decisions in a way that allows them to change direction as the crisis unfolds and more information is available. Essentially they need to be agile.
A PwC investigation of leadership behaviour during a crisis suggests “When disaster hits, an all-hands-on-deck, everyone-to-the-rescue reaction is understandable — but such good intentions will most likely lead to a chaotic response.”
The website emergency cdc emphasises the importance of clear, simple messaging from the start: “Because of the ways we process information while under stress, when communicating with someone facing a crisis or disaster, messages should be simple, credible, and consistent.”
Messages should be repeated, be supported by a credible source and be specific, it says, and should offer a positive course of action.
To this extent, this is exactly what the UK Government has done with its repetition of the simple message “stay home, protect the NHS, save lives” and its daily briefings reiterating the message as well as giving updates on the numbers of cases that justify the advice.
That it has been doing its job, perhaps almost too well, is indicated by the findings of an Ipsos Mori poll in early May that “two-thirds (67%) of Britons say they will feel uncomfortable going to large public gatherings, such as sports or music events, compared to how they felt before the virus.”
However, things become more difficult as the messaging changes, especially when it becomes more nuanced as we are seeing with the change of message to allow for a partial relaxing of the lockdown rules.
The proposed new message “Stay alert, control the virus, save lives” has already been rejected by the UK’s devolved governments (in Scotland, Northern Ireland and Wales) as being too vague as well as being perhaps premature given the continued high numbers of positive diagnoses being reported. Indeed, the Evening Standard last night reported confusion over the “back to work for some” message that led to commuters being packed on the London Underground.
The packed tubes may be linked to other reports that the country’s transport infrastructure is operating at only 10% of its former capacity post-lockdown. The biggest four trades unions have united to warn that people should not be going back to work without adequate safety measures in place and despite the troubles in the High Street retail sector, the British Retail Consortium has also warned against allowing shops to open without clear and adequate safety and social distancing rules.
In addition to any return to work message, different age groups are interpreting the message differently with many young adults going out to meet each other while older age groups remain at home.
The longer that the return to post lockdown normality takes then the more likely it is that people will change their behaviour permanently.
It is becoming clear that it will take quite a long time before everyone will do all those things that they did before Covid-19 appeared so a return to normal is a long way off.
Therefore, it is highly likely that there will be a permanent change in many people’s behaviour post lockdown.

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Business Development & Marketing Finance General

How to manage an efficient online conference

online conference efficiencyAs we all adjust to the new realities of working remotely while we self-isolate during the Coronavirus pandemic, we still need to maintain contact with staff, clients, suppliers and others where online conference calls and video meetings are proving much better than the phone.
But how do you avoid an online conference descending into anarchy with people talking over each other?
There are some simple rules that are not so different from those we adopt during face-to-face meetings.
One of the meeting platforms that is becoming increasingly popular during the pandemic has been Zoom, but there are plenty of others such as Microsoft Teams, Skype for Business and even WhatsApp. Security is an issue and all are constantly improving their security measures following concerns about uninvited intruders, in particular for Zoom which seems to have become the most popular platform.
It is important that the chair should host (convene) and be familiar with the technology since each platform has tools to manage the meeting. Like all other meetings, they need an agenda and discipline over time keeping so it is best that those invited know in advance what topics are to be discussed and for how long. It also helps to ensure key contributors are prepared with any presentation material they need to share.
Confirmation of availability is no different to face to face meetings such that once the attendees are confirmed a notice of the meeting in the form of a Zoom or other invite, which for most will request confirmation of attendance and automatically update everyone’s calendar. The invite also includes a URL for automating the login to the meeting but it makes sense to practice setting up meetings so you are familiar with the technology and invitation settings such as the need or not for passwords and waiting rooms which are all features set by the host as part of setting up the meeting. Once mastered this is straightforward.
The notice should include an agenda, with notes and login details.
It makes sense that the organiser as host opens the meeting shortly beforehand monitors participants’ arrival in the waiting area so they can approve attendance although for large meetings I would recommend you don’t use the waiting feature since it will distract you.
Participants can normally attend meetings using any device they wish including via landline phones so organisers should specify if video is necessary with the notice. For team meetings and internal ones of fewer that about 40 participants I suggest everyone should be able to see each other as this reinforces involvement.
Everyone speaking over each other is a problem so the chair may need to manage this as a discipline to master. To help their is a Participant feature allowing each Participant to raise an electronic hand which the chair can see in the Participant’s video feed and invite them to speak.
Again, learning to switch your microphone on and off  or in the case of the host, switching off everyone’s microphones centrally is another discipline we need to learn and is particularly useful for those at home with a noisy background or children in the house.
Taking notes is another discipline which can be done traditionally although most platforms offer a record feature and in some cases the host can allow or not Participants to make their own recording. It makes sense to cover this at the beginning of the meeting.
The chair essentially manages the online meeting or conference like they would do normally but everyone is logged in remotely.
While not being in the same room makes it harder to pick up the non-verbal signals that we take for granted in face-to-face meetings, video meetings are much better than phone calls because you do see everyone’s reactions.
In many ways, an online conference or meeting is no different from any formal workplace meeting, but it does highlight the importance of a strong chair and the need for courtesy, which, of course, should be features of all meetings.
 

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Business Development & Marketing Cash Flow & Forecasting Finance General

How will consumer spending change as a result of the Coronavirus pandemic?

consumer spendingConsumer spending has become much more restricted during the Covid-19 pandemic safety measures, but will it lead to a permanent change?
From March 21, all non-essential businesses in the UK were forced to close, from hospitality, restaurants and fashion retail to car dealerships and holiday travel companies.
At the same time, many businesses have had to furlough staff and a substantial number of people have sadly lost their jobs altogether.
Inevitably the reduction in income through furlough and loss of jobs and restrictions on going out due to most of us being confined at home are having a huge impact on consumer spending.
It is no surprise, therefore that in March, demand for new cars from private buyers fell by 40.4%, while fleet registrations dropped by 47.4%.
According to Essential Retail the food retailers have clearly benefited both in-store and online to the point where they have had to limit supplies of some products and sign-ups of new online shoppers, however the picture for non-essential retail spending is significantly different, even for those retailers with considerable online and delivery capabilities. Purchases have plummeted.
It says: “People are scared to spend money that’s not essential,”
But as the situation continues, it argues, there is likely to be a greater need for certain non-essential items. Examples include exercise and hobby equipment, gardening products and home improvement materials.
The question is whether all this will lead to a more permanent change in consumer spending once the crisis is over.
According to Paul Martin, UK head of retail at KPMG, Covid-19 will precipitate a rapid increase in e-commerce activity that may persist long after the event, not that this has happened yet.
No-one knows yet how many of the currently closed SMEs will survive the current limitations and much will depend on whether such consumer and business activity will return to normal once the restrictions are lifted. But those of you that do survive will be well-advised to develop an e-commerce proposition if you don’t already have one. The rapid growth in our use of online conference facilities for video meetings that in the past were physical meetings could be an indicator of one change to our normal behaviour where the number of daily meeting participants using Zoom has risen from 10 million to 200 million in a month.
A major factor is the possibility that unemployment rates may rise substantially which will be down to two factors: staff reduction by surviving businesses; and job losses due to insolvency, both of which are likely if there is a delayed or slow return to normal activity.
Another unknown quantity is whether consumers will be more selective about what they purchase having discovered how much they can do without while they have been forced to stay home.
Once the pandemic is over, it is also likely that environmental concerns will rise up the agenda again, making people more wary of re-joining the previous “throw-away” culture.
It will be a while yet before the situation becomes clearer but it is likely that the current crisis will have a significant impact on both the mechanisms and the volume of consumer spending.
 
 
 

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Business Development & Marketing Cash Flow & Forecasting General Rescue, Restructuring & Recovery

Nurture your key relationships if you want to have a future after current crisis

key relationships are important for business survivalIt may seem premature to talk about what happens when the Coronavirus pandemic is over but SMEs need to think ahead and nurture those key relationships needed to ensure their business has a future.
Many of you have had to temporarily close your business and furlough staff due to Government restrictions introduced to try to slow the spread of the virus and many or you have seen your income plummet or cease altogether, with a devastating impact on your cash flow.
According to behavioural scientists it is natural to behave cautiously, even timidly, in the face of a threat, in direct proportion to its magnitude and to what is known about it. But amid the daily deluge of media updates, it is important to remember that we will tend to exaggerate the risk so the threat looms large in our minds.
So, it is perhaps natural to invoke a so-called “bunker” mentality in which self-protection overrides all else.
But as a business owner, no matter how dire the current situation, it is important you try to maintain a sense of perspective and remind yourselves that eventually some form of “normality” will return at which point you will want to be able to return to business profitability.
An essential element of this is what you do now, and key to it will be your relationship with employees, customers and suppliers.
In previous pandemic-related blogs I have talked about maintaining regular communication with staff, somewhat like the government’s daily briefings from No 10 to keep us all informed. This communication is key whether you have been fortunate enough to be able to carry on with staff working remotely, or whether you have had to take advantage of the Government’s furlough scheme for the time being.
Similarly, it is critical to maintain a level of marketing to stay in contact with customers and clients.  They may not be placing orders now, but staying in close touch with them, demonstrating concern for their interests and wellbeing, and discussing the future will help prepare for it.
In the same way, understanding the changing needs of customers may have helped you pivot, as those like some restaurants who now provide a take-away service and offer meal deliveries. This engagement will ensure your business pick up quickly when restrictions are eased.
Another of the key relationships that you will need to nurture is that with your suppliers. You will need them if you are to remain in business where non-payment during the lock down may have been necessary if you yourself haven’t been paid but ignoring them won’t be easily forgiven.
There is a salutary lesson in the action recently taken by New Look, whose CEO last week wrote to all suppliers suspending payments to suppliers for existing stock “indefinitely, cancelling orders for its Spring and Summer clothing lines and saying it won’t pay costs towards them.
In fairness, the company had been in difficulties as a High Street retailer due to the changing nature of customer shopping habits in the previous two years and had closed many of its branches.
However, the news was devastating to its suppliers who received such a brutal message, one of whom is reported as saying the action would “devastate smaller companies down the supply chain at a time when they need help the most”. There appears to have been no recognition or understanding in the letter that suppliers would be facing cash flow issues of their own.
A little empathy would not have gone amiss when communicating such a non-payment message to suppliers who will need a level of understanding to show how important they really are despite being unable to pay them and especially when wanting to do business with them again in the future.
Perhaps you could engage with them by discussing ways to limit the damage, either by offering staged payments, if you as a business can afford it, or by reassuring existing suppliers that you value them and will continue to work with them as the restrictions ease and life gets back to normal.
No matter how focused you are on your own concerns and worries at the moment, and I am by no means seeking to minimise their significance, you should also remember that if you don’t nurture your key relationships now you could put your eventual business recovery in jeopardy.
Help is available for SMEs dealing with the pandemic at:
https://www.onlineturnaroundguru.com/coronavirus-sme-support

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Business Development & Marketing Cash Flow & Forecasting General

Why you shouldn’t suspend your marketing during the Coronavirus pandemic

marketingSMEs have had to close, suspend or reduce their activities due to the Coronavirus pandemic and most are looking for ways to minimise their cash out flow however despite the temptation they should be wary of cutting their marketing budgets.
But if your business disappears from the market and in doing so is no longer top of mind for your customers and clients will you be able to regain your position or will others who continued marketing replace you?
Withdrawing from the market may suggest you have gone out of business, as indeed will be the case for many as a result of the Coronavirus pandemic.
While it is understandable that SMEs in dire financial straits will want to preserve cash by cutting back on expenditure, some newly-published research from Opinium, released on March 26 has found that people do still want to hear from businesses of many kinds.
The research revealed that “a very large majority of people in the UK would like to hear either the same amount, or even more, from brands” across a range of categories including the essentials such as healthcare and pharmaceuticals, supermarkets, food and drink and household goods but also from healthcare to fashion and beauty to entertainment.
Of course, many of you have reacted quickly, communicating your actions and in many cases pivoted your business model as a response to the crisis.
One example is a small bakery that has closed its shop and set up an outside market stall so customers don’t need to go inside and a drive-by collection service for other customers who order by phone and don’t want to get out of their car. Another bakery does deliveries to hospitals and essential worker sites.
There are examples of SMEs in the hospitality and restaurant businesses that have been forced to close their doors to the public and have responded in different ways, in the case of some hotels, by offering accommodation to such people as health care workers or the homeless and restaurants that have quickly established food takeaway and delivery services as well as special deals for key workers such as those in the NHS.
Some in fitness, health and beauty have moved online to offer their services remotely to help people in lockdown stay not only fit and healthy but also to be able to look after their appearance.
Of course, all of these will be remembered positively when the crisis comes to an end and it is likely that their business will recover more quickly that those that shut down. Plus, if your business has a website you need to protect its place in the search engine rankings with regular blog posts and ongoing marketing activity.
Perhaps more surprisingly the research found that many people want “brands to talk about something other than the pandemic”.
“This desire for something different is symptomatic of a consumer who is struggling to find their place in a drastically different world”, it says. So, any marketing that can convey some sense of normality is good for your business.
Opinium also asked people what were their preferred forms of marketing communication and top of the list came TV advertising (31%) and e-mails (40%).
While the desire to cut the marketing budget may be understandable when margins are tight, clearly it is far from the right thing to do if you want your business to return after the crisis.
 

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Business Development & Marketing Cash Flow & Forecasting Debt Collection & Credit Management Finance HR, Redundancy & Trade Unions

Maintaining a positive mindset about your business during the current crisis

maintain a positive mindsetNobody would deny that the current pandemic-induced situation is a worrying time for SME business owners but they should do everything they can to maintain a positive mindset.
It helps to see if there are potential opportunities for either new ways of working or new services that you can adopt, especially if the changes you make demonstrate a concern for the needs of others.
There have been some excellent examples among the smaller micro-businesses that have been remarkably agile in doing this very quickly. Many of these are likely to fall into the category of sole trader/self-employed for whom there does not yet appear to any Government financial help, so hats off to them for their agility.
Examples we have seen is the numbers of exercise and fitness, yoga, Zumba and other classes that have set up to carry on via video in response to the closure of their usual physical venues.  Not only does this mean that they are able to maintain the link with their clients but they have found a way for people to maintain a level of fitness if they do find themselves having to self-isolate.
The same applies to other types of coaching and mentoring, which can be done one to one via Skype and other platforms or can offer training sessions via video for people.
One independent brewery in Scotland has started making hand sanitiser at its distillery and is giving the product free to anyone who needs it. Perhaps not profitable but a good piece of marketing its social responsibility, which may lead to more people trying its main product!
Local pubs and restaurants, too, are demonstrating a positive mindset despite a drop in customers or actually having to close. Many independent restaurants, for example, have switched to producing and delivering ready-meals. Some local retailers have set up outside their shops and others are offering home deliveries of staple supplies such as bread, eggs, fresh meat, fruit and veg.
At the other end of the scale the Co-op has announced that it will create 5,000 store-based posts which will provide temporary employment for hospitality workers who have lost their jobs because of the coronavirus crisis and is simplifying its recruitment process so successful candidates can start work within days.
Of course, many SMEs have more immediate and pressing concerns keeping them awake at night, like how they are going to pay staff if they have suffered a catastrophic drop in customer orders given that there is as yet no sign of when the promised Government grants and loans will be available. In the meantime, staff expect their wages to be paid and most other overheads are having to be paid.
One example of the lack of understanding among many large firms is Funding Circle who were contacted on behalf of a client to discuss a short-term suspension of payments or at least interest only payments, they were not interested and said that they would issue demands on the personal guarantees they hold if ongoing payments were not made in full.
It doesn’t help that many firms have suspended all trading with the stopping of all payments to suppliers and placing new orders.
In these circumstances it will help to talk to an experienced turnaround and rescue adviser who can help SMEs manage their cash flow and assist with the urgent measures necessary to survive.
Remember, a problem shared is a problem halved!

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Business Development & Marketing Cash Flow & Forecasting Finance General Insolvency

Using the Pareto 80/20 Rule as a guide in your business

Pareto 80?20 RuleMany people in business are familiar with the Pareto 80/20 Rule, particularly the idea that 80% of their business comes from just 20% of customers or clients, or that 80% of their profits comes from 20% of orders, or that 80% of their profits come from 20% of products, or even that 80% of their sales are generated by 20% of their sales staff.
Understanding this can influence behaviour such as protecting the 20% that contribute the most or looking at how to improve the lower performing 80%.
Essentially the Pareto 80/20 Rule is simply a way of demonstrating that most things in life are not distributed evenly.
This can apply to everything but focuses on considering productivity as an output of time spent or as a return on investment. It looks at resources, in terms of people, time and cost with a view to optimising the output. Analysis of turnover and profits by customer, market segment and products to produce a pie chart is likely to highlight aspects of the Rule.
The 80/20 Rule is a guide that can be misused, While 20% workers may be measured as doing 80% of the work this rarely means that the work of remaining 80% is irrelevant. Indeed, it may be that 20% contribute to profitable work while 80% are necessary for the 20% to be productive. It does however show where to focus on improvements.
So how can businesses use the Pareto 80/20 Rule to improve their businesses?
To a large extent this is about identifying the processes, systems or activities on which to focus because they have the best potential for a return on the effort.
You might focus attention on customers perhaps with view to selling more to your best customers or to improving sales to the 80% with view to generating the same level of return as the 20%. This might be putting prices up or selling different products or even turning away unprofitable business or customers who are hard work.
You might focus on staff perhaps with a view to measuring and improving their working practices that in turn improve productivity. Can one person be trained to do several jobs? Or should teams be reorganised or shift patterns altered? Sales and delivery may benefit from reorganising those geographical or market segments for which they are responsible.
You might focus on your products and production. Do you reduce the number of suppliers or the stock held or number of products sold. Can one product replace several existing products? Should you outsource the manufacture of components?
The Pareto 80/20 Rule is, in short, a handy guide to where you might focus your attention for improvement, it should not be regarded as a fixed and immutable rule.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance General

Sector – business in UK’s North and Midlands

UK's North and MidlandsThe UK’s North and Midlands were once the powerhouse for the country’s economy, with its manufacturing and engineering industries driving the Industrial Revolution in the late 19th Century.
Cities such as Leeds, Bradford, Manchester, Sheffield and Birmingham were the industrial heartland of UK when national economies depended heavily on what they could make and sell, from textiles to steel and heavy engineering machinery.
But as industry in UK declined, the UK economy shifted its focus to services and in particular to the professional and financial services with a lot manufacturing being transferred to countries such as India and China, where production costs were much lower. This was also associated with a shift in the UK economic centre of gravity from the Midlands and the North to London leaving much of the country behind.
Vestiges of industry have survived in places like Sunderland, where the Japanese car manufacture Nissan has thrived and recently increased its commitment by investing more than £50m in its plant that builds the Qashqai model.
According to a “State of the North” research by the IPPR (Institute for Public Policy Research) and reported in the Yorkshire Post  in November 2019, “only countries like Romania and South Korea are more divided” than the UK.
It found that “in Kensington and Chelsea and Hammersmith and Fulham, disposable income per person is £48,000 higher than in Blackburn with Darwen, Nottingham and Leicester”.
In December 2019 various reports by the Centre for Cities highlighted the issues. According to the Financial Times it had found that the economic divide between London and the rest of the UK widened last year.
The FT also quoted ONS (Office for National Statistics) figures that showed that “The UK capital recorded a 1.1 per cent annual rise in output per person to £54,700 in 2018, increasing the per capita gap with the poorest region — the North East — where growth was only 0.4 per cent to £23,600 per head”.
The Centre for Cities research analyses business and employment opportunities across the UK, finding that many northern cities are underperforming, hampered by a need for growth and by being at different economic stages in terms of availability of skilled workers and of infrastructure.
But there have been some signs of hope for the UK’s North and Midlands amid the gloom with the Centre for Entrepreneurs think-tank reporting that Birmingham is now the UK’s start-up capital outside London. The British Business Bank has also revealed that entrepreneurs in the north of England received more loans than those in London.
Business Live recently reported that figures from UK Powerhouse have shown that Stoke-on Trent has the fastest employment growth in the UK.
During the recent General Election much was made of pledges to level up the economy with heavy investment promised for the UK’s North and Midlands.
Among the promises made by the Government is a pledge to get on with the proposed HS2 railway to connect northern cities like Birmingham, Manchester and Leeds to London. It argues in support of this plan that “The Midlands already has the highest concentration of businesses outside London, including international firms such as Jaguar Land Rover, MG Motors, Deutsche Bank, JCB and the 150 year old, West Midlands-founded FTSE 250 engineering firm IMI”.
It has also promised “massive investment” in a new institute of technology to be based in Leeds, and to be modelled on MIT in the US (Massachusetts Institute of Technology) and there are suggestions that parts of the Treasury will be relocated to the North of England.
Whether these promises will be delivered remains to be seen, especially given the more immediate and pressing problems of the NHS demands due to the worldwide pandemic of Covid-19 now playing havoc with the global supply chain and countries’ economies.
Perhaps this week’s budget will provide some clues.

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Business Development & Marketing General HR, Redundancy & Trade Unions

Employing millennials should not be a problem

employing millennialsEmploying millennials should not be seen as a problem but according to some reports in the business press many employers would prefer not to.
The reasons given range from this generation having a poorer grasp of language to being less loyal than older workers, and allegedly having higher absence rates.
Quite apart from the fact that age discrimination is outlawed under equal opportunities legislation, millennials (the generation born between 1980 and 2000) now make up the bulk of the workforce.
While it would be fair to say that employing millennials means bosses need to understand that this age group may view their careers rather differently from previous generations, it is also true that each generation comes with skills and attitudes that are a benefit to their employers. It is also true for many employers that they are customers who need to be understood.
Approximately 10 years ago PwC produced a report that focused on the millennial generation, examining their career aspirations, attitudes about work and level of comfort with new technologies. It predicted that they would make up 50% of the global workforce by 2020.
It also examined the key features that employers would need to understand about this generation: “Millennials’ use of technology clearly sets them apart. This generation has grown up with broadband, smartphones, laptops and social media being the norm, and expect instant access to information”.
This is clearly a benefit for 21st Century businesses.
However, the report continues that employers need to understand that it is a generation whose “behaviour is coloured by their experience of the global economic crisis and this generation places much more emphasis on their personal needs than on those of the organisation for which they work”.
This should be no surprise given that it has been a long time since employees of any age have been able to rely on the “one job for life” career model.
Couple this with having had to make compromises due to the 2008 global financial crisis, such as having to do work that is beneath their skill and education level. Indeed, they are often better educated than previous generations who tend to be more senior people in organisations and they are living with high levels of rent and living costs while at the same time they have been burdened with university debts that were not imposed on those who complain about them. It is hardly surprising therefore that many of them consider their income as derisory when compared to the income of others. Loyalty works both ways.
In addition, they are aware of other factors such as quality of life, environmental concerns, diversity, ethical business and equal opportunities which are becoming more important factors when deciding who to work for.
As older employees reach retirement and the likely restrictions on immigration, employing millennials is not going to be a choice and indeed employers should be looking for the best available skills for their businesses – or the potential to develop them.
It may mean that employers will need to re-think their rigid, hierarchical structures and use a more cohesive, mentoring approach to their management style.
They will need to pay more attention to employees’ training needs and careers aspirations, and to accommodate their increasing focus on environmental and social concerns.
Good workers know when they are being treated well and young people tend to be well able to adapt to a fast-changing world, accordingly employers should focus on helping young people to become good workers as a demonstration that they valued. Employees should no longer be regarded as a burden or treated as being lucky to have a job. It is now the other way round.
Survival in the 21st Century will involve businesses having to adapt rather than expecting their people to adapt.
While most businesses claim that their people are their greatest asset, the reality is only true when their people claim their business is the greatest employer.

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Business Development & Marketing General Turnaround

Learning to really listen can benefit your business

really listenHow many of us really listen to what is being said to us?
Listening is not the same as hearing and often we can tune out what is being said to us, either because it triggers an assumption or a prejudice, causing us to miss the real point of what is being said.
Being able to really listen, however, is crucial to both personal success and also that for a business particularly, but not only, for those in a customer services role, where it is crucial to really listen and respond appropriately to a customer’s concerns rather than parroting from a pre-prepared script.
How often are we frustrated by the tele salesperson who launches into their script without even pausing for breath.
Indeed, failure to really listen can have a serious impact on the reputation of a business with its clients or customers.
But the ability to listen well is equally important for a boss or manager wanting to communicate a change or an innovation, or to HR when dealing with issues with an employee. Both situations will invite feedback and this is where it is important that the person giving it is actively listened to.
Language can be a very imprecise tool. Every word is loaded with background information which to the listener can mean something quite different to how someone else would interpret the same sentence or word.
Arguably hearing is a passive activity whereas when you really listen to what is being said you are actively engaged in paying attention, considering and seeking to understand what is being communicated, both verbally and non-verbally.
It is possible to improve listening skills by doing some very simple things.
The first is to leave the ego at the door and demonstrate an open and welcoming approach, perhaps by using eye contact if possible and show that you are concentrating on what you are being told.
The second is to remind yourself to keep an open mind and allow other people to finish what they are saying rather than jumping in with a comment before they have finished. Not doing so will convey that you are making an assumption, perhaps based on something in their choice of words that triggers a reaction in you, that may be well wide of the mark and in so doing you are missing something that could be beneficial.
It helps to give feedback, especially if the conversation is on the phone, to ensure that you are clear about what they are saying. It can also help to make notes of key points so that you remember what was said, especially for your feedback and any future action.
Listening is an art that we are increasingly losing in a cacophonous age of social media and sound bites, where the emphasis seems to be on having one’s say and competing rather than really engaging with each other.

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Banks, Lenders & Investors Business Development & Marketing Finance HM Revenue & Customs, VAT & PAYE Turnaround

Will SMEs get more help from the Government?

help from the Government?Business pages are always full of articles claiming that SMEs need more help from the Government.
But equally, there have been a number of upbeat and positive reports that suggest the opposite is the case, so what is the truth?
According to the business lender Iwoca, lending to SMEs in deprived areas has dropped dramatically, by 8% between 2014 and 2018. Iwoca CEO Christoph Rieche has said: “It’s concerning that, in many parts of the country, major banks aren’t serving small and microbusinesses with the funding required to help them thrive. SMEs are vital for the health of the economy.”
The figures are borne out by UK Finance, which has revealed that small business loans and overdraft balances from big banks fell by almost 16% in the North West between the end of 2014 and September last year, from £9.8bn to £8.2bn, while loans and overdraft balances in London fell by only 2.3%. Wales saw a 14.2% drop, while Yorkshire and the Humber posted a 10.9% decline.
The CEO of the British Business Bank has also argued that the Government should invest “billions” more in SMEs if it wants to deliver on its promise of levelling up all parts of the UK.
Earlier this month reports in the Financial Times and the Times criticised the Prime Minister for ignoring business groups such as the CBI (Confederation of British Industry), BCC (British Chambers of Commerce) and the IoD (Institute of Directors) in a speech he gave on EU trade negotiations.
An aide (unnamed) later reportedly criticised these business bodies for failing to prepare their members for “a Canada-style free trade deal” and said they were unlikely to get Government attention unless they fulfilled their responsibility to their members.
Another issue high on the SME agenda is the Apprenticeship Levy, which is failing SMEs, according to the FSB (Federation of Small Businesses) leading to a 24% drop in apprenticeship starts since the new scheme was introduced in 2017.
However, there has been some positive news for SMEs, the Ministry of Housing, Communities and Local Government has confirmed that a £1bn of new loans is to be made available to small construction companies, under a loan guarantee scheme.
Let us hope it is not like the Enterprise Guarantee (EFG) scheme that was introduced in January 2009 to replace the Small Firms Loan Guarantee (SFLG) scheme that was introduced in 1981.
While both provided for a government guarantee to underwrite bank lending to SMEs, the SFLG scheme was a key contributor to the grown of the UK economy under Mrs Thatcher’s government through encouraging entrepreneurs. The SFLG repaid the banks as lenders to companies upon insolvency of the but was very different to the EFG that required personal guarantees from directors and only repaid the bank lenders after bankruptcy of directors as guarantors. It is no wonder that the EFG failed. We can only hope that the new breed of young advisers to Rishi Sunak, as the new chancellor read history but I am not holding my breath.
In the meantime, there are other initiatives, many aimed at the regions such as the Midlands where FSE Group has been appointed by the Midlands Engine Investment Fund to manager an estimated £40 million fund for its region’s businesses.
An example of stimulus for SMEs was that reported by Civil Service World who found that the proportion of government spending going to SMEs exceeded 25% for the first time in four years last year, as smaller firms won an extra £2bn in Whitehall contracts.
There are without doubt burning issues for SMEs that need to be addressed, such as tougher action on late payments, reform of business rates and reliable, efficient broadband in rural areas and market towns, on which there has been little Government comment so far. We might however have found a champion in Philip King, the recently appointed Interim Small Business Commissioner, who is promoting the Prompt Payment Code (promptpaymentcode.org) to focus a spotlight on the payment record of large firms.
We shouldn’t ignore the positive signs from Government following its election with a clear mandate and a sense of purpose to make things happen which in turn will rely on a strong economy.
The budget on March 11, may yet contain some real help for SMEs and at least will let us know whether the Government is aware of SMEs and their concerns.
 

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Business Development & Marketing Cash Flow & Forecasting Finance General Turnaround

Sector focus on the UK newspaper industry, regional, national and online

UK newspaper industryThe UK newspaper industry has faced multiple challenges for many years but somehow it manages to survive.
In many ways it is a good example of how agile a business needs to be in the 21st century if it wants to continue, to prosper and to grow.
But arguably the UK newspaper industry is more than simply a business albeit, like all businesses it needs to cover its costs and make a profit.
Relevance is critical to having and retaining readers as consumers of content in what might be assumed to be a traditional supply and demand business. At its most basic, news is about informing readers about what is happening in the world, and in the country and region in which they live and aspiring journalists in training were often told that their purpose was “to entertain, to educate and to inform”.
Nevertheless, to the accountants, newsroom journalists have increasingly been seen as a cost, a drain rather than a contributor to the business’ profits.
Indeed, relevance is often more than simply news or indeed information.
So, costs started to escalate in the early 1990s largely due to the increasing price of the paper, much of which is imported from Canada and to falling circulation.
The development of web offset printing had already eliminated the need for type setters and proof readers and increasingly the focus turned to how to get more from fewer journalists and a near-epidemic of redundancies began, with a shift in the news-gathering model from in-house employed journalists to a mix of less expensive, young trainee journalists in house and freelance columnists.
At the same time, in attempts to retain readership, many papers, particularly the regional and local ones, started to include a great deal more content that could be described as lifestyle, celebrity and entertainment-related, reflecting a perceived change in readership interests.
But it is a tough and competitive business and by March 2018 the UK Press Gazette was reporting a net loss of at least 30 local newspapers in the previous year, while many of the nationals were struggling to make a profit. It said that Trinity Mirror closed more titles than any other publisher, with 12 shut down in total over the year and the collapse of family-owned Observer newspapers had led to the closure of all of its 11 titles.
In the local market, it reported, “Trinity Mirror remains the biggest regional publisher, with a total circulation of 1,598,285 across its 129 local publications.
“Newsquest was the second largest publisher with a total circulation of 1,344,379 across its 118 publications.”
Arguably, the digital revolution has had the biggest impact on the UK newspaper industry.
The majority of a newspaper’s profits come from advertising, and as more and more advertisers shift to online promotion the print and distribution costs of newspapers are significantly impacting profits. Like retailers, the switch to online distribution is taking a long time and the rate of online growth in profits is not sufficient to offset the rate of print related decline.
Nowadays, we take it for granted that our daily, or weekly, paper whether it is local, regional or national, publishes an online edition, which can be updated frequently throughout the day given the intense competition to be first with news developments in an increasingly fast-paced world.
Many national UK newspapers, with the notable exception of The Guardian which relies on appeals for contributions from readers, have introduced a paywall, forcing readers to pay a subscription to read many of their online articles.
The Independent, launched in 1986, and sold to the Russian businessman Alexander Lebedev in 2010 went online-only in March 2016.
According to an article in PR week last year “the Financial Times hit its target of a million paying subscribers a year ahead of schedule … and The Times and Sunday Times have around half a million paying customers, with the majority now digital-only. After years of making substantial losses, the Guardian announced a small operating profit for 2018-19.”
By contrast, over the last 13 years, it said, there had been a net closure of 245 local and regional titles.
There is no doubt that the explosion of social media, has led to arguably shorter attention spans and more impatience generally, not to mention a greater dislocation between where people live and their attachment to the locality and changed attitudes to local and regional papers.
However, the rise in concern about “fake news” on social media and subsequent fact checking services offered by some papers, may well improve readers’ trust in what they read in reputable publications rather than on social media.
In my view it is too early to predict the total demise of the UK newspaper industry, certainly at national level, but I hope also at regional and local level, not least as an antidote to the early-morning commute or as a pause in the daily office pressure for a mid-morning coffee and a quick flick through the paper.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance General

Key Indicator – the state of UK business activity

UK business activityUK business activity is either in a woeful state, or slowly picking up speed following December’s general election, depending on who you are listening to.
Given the dire insolvency figures for 2019, which I covered in Tuesday’s blog, there is clearly plenty wrong in specific sectors of the economy.
The construction industry, High Street retail and the accommodation and food services were the worst-affected last year but it would be foolish to pretend that any business, from SME to large corporations had an easy time given the global economic slowdown and, more recently, figures revealing that the EU economy is near-stagnant.
Nevertheless, now that the withdrawal of the UK from the EU has passed its first hurdle and that the government has a clear mandate with a huge majority to implement its decisions for the next five years, there are signs of optimism.
The first Lloyds Bank Commercial Banking Business Barometer in 2020 showed a 13-point increase in business confidence, taking it up to 23% in January, the highest it has been for 14 months. The Lloyds barometer calculates overall business confidence by averaging the views of 1,200 companies on their business prospects and optimism about the UK economy.
The most recent IHS Markit/Cips manufacturing purchasing managers index (PMI), for January, showed that the sector has enjoyed its best performance for nine months. Another survey by the CBI (Confederation of British Industry) was also positive in suggesting “the biggest wave of optimism among smaller manufacturers for six years” with 45% of these SMEs reporting that they were more optimistic following the election.
In addition, the Bank of England has kept interest rates at the same level, despite expectations that they would be cut. The outgoing BoE Governor Mark Carney said: “the most recent signs are that global growth has stabilised”.
But much of this is about sentiment where the proof of the pudding will be in increased orders on business’ books and improved cash flow.
On the positive side, productivity (output per hour) increased in January, by 0.1% in the services sector and by 5.7% in construction, according to official figures from the ONS (Office for National Statistics). The results of another survey by the finance firm Together concluded that British SMEs plan to invest £1.7bn over the next two years.
It has to be said that much of this “improvement” is from a pretty low base given that the economy ended 2019 at near-stagnation point, so this is not yet really any indication of a growing economy, although it is a positive shift.
There have also been some encouraging government noises about increasing spending to address the economic inequalities between the North and Midlands and the South which could be good news for Northern businesses. Other government initiatives in the pipeline are likely to benefit the house building and construction industries.
Despite the optimism there is a long way to go before most businesses and especially those involved in farming, fishing and food export, will know the shape of any proposed trade deals, with the EU and with the USA so the short-term for them is not especially encouraging.
The Chancellor, the Foreign Secretary and the Prime Minister have all in the last few days signalled a very hard line negotiating position with the EU over the shape of any agreements which the Government hopes to achieve by the end of 2020. Whether this is a negotiation tactic or a ‘die in the ditch’ strategy we shall find out quite soon.
Concerning input to the outcome there have been some reports that the Government has been ignoring requests from business bodies, such as the CBI (Confederation of British Industry) and the FSB (Federation of Small Businesses) to include their representatives in the forthcoming trade negotiations with the EU.
There are also still the unresolved issues of how the current skills shortage and migrant labour issues will be addressed.
No doubt a level of certainty for some businesses will emerge during the budget, which is due to be announced on March 11. Well at least we shall learn more about the Government’s priorities.
In summary, while it is encouraging that there has been a return to more positive sentiments from UK business leaders, there is a long way to go before we can be confident that they are matched by revitalised UK business activity at home and abroad.

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Business Development & Marketing General HR, Redundancy & Trade Unions Turnaround

Emotional Honesty at work – mutual respect turns a negative into a positive

emotional honesty and conflict resolution There are many situations in our working life that have the potential to damage relationships with colleagues and managers and it takes emotional honesty to confront them.
Disagreements are inevitable especially where individuals are ambitious and want the best for the business and its goals. There are often many solutions to problems and teams need to learn how to share differing ideas without disagreements being seen as confrontation and in particular avoiding individuals being afraid of others in such a way that they don’t contribute.
Team decision making doesn’t necessarily mean agreement but is should be positive, especially when the team is needed to implement the decision. Sophisticated teams may explore decision making as a form of idea meritocracy by considering the knowledge and expertise of each contributor rather than team democracy where everyone is equal, or worse, where overconfident individuals, bullies or HiPPOs (Highest Paid Person’s Opinion) make the decisions.
Conflicts at work are often rooted in a lack of respect among colleagues. Conflicts are different to disagreements and can make the atmosphere toxic leading ultimately to bullying and other serious issues that damage a team’s ability to work together.
Another area of discomfort is giving feedback on someone’s behaviour or during an appraisal when the appraisee is under-performing. The intention is normally to invite a change in behaviour that leads to a positive outcome. But receiving such messages can promote rejection of the message or even anger hence the need to deliver such messages with both honesty and with emotional understanding.
Dealing with disagreements, a loss of respect and giving feedback all require a level of emotional honesty to confront the issue in a sympathetic way. In addition to individuals learning how to deal with difficult messages the culture of the company is also important. Culture can help avoid individuals being defensive and feeling victimised by removing blame and promoting honest engagement such that everyone moves on after the decision has been made or after a matter has been dealt with.
In an ideal world everyone at work respects each other and values the contributions of others. However, we all have quirks of character and mannerisms that can grate, which is why we need a level of emotional honesty to both acknowledge this to ourselves and to others. This acknowledgement allows us to be constructive when confronting issues. The key is to actively listen and seek to understand others and avoid letting our own emotion get in the way.
If it is necessary to resolve a problem with a colleague or manager, the first step is to remind ourselves and them of their good points and qualities and to start with these at the opening of any discussion.
Emotion should be firmly kept out of the discussion. Expressing anger or frustration makes it hard to really hear the feedback being given. So, an essential element when dealing with disagreement or a loss of respect is to maintain courtesy.
Equally, aggression, both active and passive, during a confrontation gets in the way by becoming a form of bullying; even disengaging from a difficult situation can be done in a way that is construed as emotional bullying when one party gives in or walks away without resolving the underlying issue. This is often how family members deal with conflict and is seen at work when people don’t know how to deal with issues.
It can be effective to establish a connection by sharing a situation where you may have made a similar mistake and not talking down to the person on the receiving end.
Humour and displacement topics can be useful tools for lightening the mood or changing the topic when dealing with awkward situations but it is often necessary to get back to resolving serious issues as burying them tends to fuel resentment.
It is important to remember, too, that people have personal lives outside of work and their circumstances may be a contributing factor where they may be concealing a personal or family situation that is affecting their behaviour or performance at work.
It is not unusual for people to keep outside problems to themselves, believing they have to conform, to be “professional” or to fit in with a so-called “macho” culture.
Whatever the situation or problem, time should be allowed for the person on the receiving end to digest and think about what has been said.
When on the receiving end we need to listen, take notes if necessary and may need time to consider the points made before responding.
Emotional honesty rather than confrontation is the best way to resolve workplace problems. Feedback should be constructive and dealing with disagreements and conflicts should be done in a way that looks for a positive outcomes.
Respect for others is key and if maintained then everyone can benefit from the experience.
 

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Business Development & Marketing Cash Flow & Forecasting General

Retrain to do what? The jobs of the future

the jobs of the futureA national government retraining scheme was proposed in July last year to help those workers whose jobs will become obsolete because of Artificial Intelligence (AI) and automation.
Whether it will materialise following the Brexit mayhem and subsequent election remains to be seen.
Research by Oxford Economics has found that 1.7 million manufacturing jobs have been lost to robots worldwide since 2000, including 400,000 in Europe, 260,000 in the US, and 550,000 in China and that a further 20 million manufacturing jobs will be obsolete by 2030 although most of these will be abroad.
There is no doubt that the future world of work, especially, but not only, in the manufacturing sector will look very different.
The drive towards aver more automation may conflict with concerns for the future of the planet and the environment but both will doubtless mean a radical rethink of economies, especially those that are dependent on consumer activity.
Demographics too will play their part as many of the populations of the developed world age and live longer and birth rates decline.
All this has led to an apocalyptic vision of the future by some, such as Aaron Benanav, a researcher in the social sciences at the University of Chicago, who argues that economies have, since the 1970s, been based largely on industrial production, expansion and exporting as their major economic growth engine and that such opportunities for growth are dwindling as more economies mature.
He argues that no other sector than manufacturing has been identified that can replace this out of date growth engine and that “restoring previously prevailing rates of economic growth will prove difficult if not impossible. Unless we find some way to share the work that remains, beggar-thy-neighbour politics really will tear our societies apart”.
Others, however, are more optimistic arguing that we have not even begun to imagine the jobs of the future.
Business Insider is one publication that has had a stab at imagining the jobs that will be needed in the future. Their list includes GPs, Dentists, Plumbers pipefitters & steamfitters, vocational nurses, construction managers, physician assistants, sales reps, secondary school teachers, tractor-trailer truck drivers, computer systems analysts, construction trades supervisors, service sales reps, software developers, and physical therapists to name just a few.
But these are all existing jobs in the world as it currently is. A global digital company, Cognizant, has gone even further and imagined jobs of the future that may be needed. A small sample from their suggestions includes:
Ethical Sourcing Officers for when corporations want to root their decisions on what is ethical and not what is profitable. The ESO will be in charge of production to ensure that every step of the process is in accordance with the ethical values of the shareholders.
Personal Data Brokers, who will make sure their customers are paid by those companies who use their data. This assumes that consumers will have full control over their personal data
Virtual Store Sherpas, will be the online equivalent of the in-store personal shopper, who will guide consumers through the process of selecting the most appropriate and affordable items and organise delivery.
Man-Machine Teaming Managers, whose job will be to “figure out and combine the strengths of man (cognition, judgment, empathy, versatility, etc.) and machine (accuracy, endurance, computation, speed, etc.) to create the most productive worker team possible”.
A brave new world or an apocalypse? Who knows? But there is no doubt that the future is out there!
 

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Business Development & Marketing Finance General

Running a small business is a juggling act

businessj juggling actA YouGov study has found that small business owners identified most strongly with the analogy of a juggling act when asked about running their businesses.
The analogy was strongest in the North West, in Yorkshire and Humberside, where 63 percent in each region compared themselves to jugglers.
Bookkeeping was rated the biggest chore by 27% of the 1000 respondents, while 42 percent of respondents believed central government added to the hassle for small businesses.
As an analogy it makes sense where dropping one ball can cause a knock on effect such as the consequences of not having contingency plans or missed payments or failure to file Tax Returns.
Among the issues identified in an article in The Economist on the same subject is knowing the right time to take certain steps in a business.   In that sense, it argues, the juggling act is a permanent exercise in balancing a variety of trade-offs. Such as holding high stock levels can help avoid the consequences of being let down by suppliers but it ties up working capital.
Knowing the right time to expand is a major issue: “by expanding too fast, companies risk losing control of product quality and messing up their management structure”.
Another is the tension between centralisation and delegation. A hierarchical structure can lead to a rigid and inflexible business structure and a loss of agility, while delegation of roles can only work if staff are well trained and the business has a clearly-defined set of goals with which everyone is familiar and on which they act in harmony.
Another juggling act is created by the tension between sticking with the core products or services and how much you can diversify away from the core.
“Choosing the right time to expand and diversify, and the right organisational structure to do it, is a matter of judgment. That judgment, and the flexibility to change plans, is what makes a good manager.” is the Economist writer’s view.

So how can an effective CEO handle the juggling act?

Firstly, they should learn to delegate effectively. They should not be trying to do everything themselves. However, this means that those to whom tasks are delegated must be well-trained and know the company’s goals and be suitably motivated and trustworthy when left to carry them out.
The effective CEO will always be juggling priorities but there are ways of managing them although this involves being well organised.
It helps to see a business as a system of systems by breaking it down into discrete and manageable sub-systems or processes with delegation and clear lines of communication to keep track of all the various activities.
Planning and managing time have been covered in previous blogs and are essential to ensure balls are not dropped. It is easy to put off tasks which can turn out to bite you on the backside if ignored. Examples of activities that are often put off are: the collection in book debts, paying suppliers, VAT and PAYE, boring things like compliance, insurance, allocating time for staff reviews, and even speaking with customers; indeed there is much to oversee the trick is not to do it all but have systems and processes in place to ensure each necessary activity is done.
Check lists and using management systems can make juggling easier. This might mean having KPIs (Key Performance Indicators), check lists such as one listing all the month-end accounting tasks, a monthly management report that consolidates information from departments including management accounts, an order management system to track the fulfilment and invoicing orders, a way of monitoring sales & marketing activities and their results. There are myriad sub-systems and processes that can make the juggling easier but they all need to be optimised and integrated as part of the overall business.
It is possible to make the juggling act manageable and efficient in a way that frees up the time of the CEO so they can focus on the future of the business giving them time to develop strategy. To work on the business, rather than be bogged down in the business.

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Business Development & Marketing General

Keep it simple – and polite – if you want a response to your email

response to your emailIt can be frustrating trying to get a response to your email but employing some behavioural psychology can help.
Catching and holding the attention of busy people with perpetually flooded in-boxes can be tricky, so the secret if you want someone to both read and respond to your email is to make it easy for them to read and engage.
Firstly, the email should have an appealing, short and clear subject line that captures the imagination and makes the recipient want to find out more b reading it. Indeed, most of us harvest or scan our email inbox and often only check who the sender is and read the subject header.
Once opened the email itself should be short and above all concise in clear simple language. Beware of information overload, the recipient can always come back for more. While you may have several things you want to communicate, the objective is to get a response so you can expand in a follow-up call or email.
Giving something of value to the recipient can also trigger a response. Perhaps by offering an idea, or suggestion relevant to them or their company. Relevance is also key by demonstrating you’ve done some research as we can all spot the ‘bollocks’ of most marketing messages.
Courtesy is also crucial. Research has shown that polite emails with correct spelling generate a better response rate. The sign-off is also important, for example “Thanks in advance” has been found to generate a much higher response rate then “Best wishes”.
Keeping your message short and simple also signals courtesy, that you understand the recipient is a busy person.
Your last paragraph should make it clear what you are asking for and it may be that you can set up further communication even if your recipient doesn’t respond by using phrasing such as “If I don’t hear anything, I’ll assume you’re happy to ….”.
Finally, the time when you send an email may be crucial. If you schedule your email to land in their inbox at the start of the working day, for example, there is a greater likelihood of its being read and of your getting a response.
Using automated scheduling software can also help, so that if you don’t get a response to your email a reminder email a couple of days later can nudge the recipient’s memory.
To summarise, remember the acronym EAST (Easy, Attractive, Social and Timely) no matter if your recipient has the brain of an Einstein. In this context, another acronym also applies, KISS (Keep it Simple, Stupid).

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting General

What items are top of businesses’ post-election wish list?

post-election wish listInevitably many promises were made during pre-election campaigning but how many will be delivered and what items are top of businesses’ post-election wish list?
There is no question that there are many urgent domestic issues that need tackling and were “parked” during the on-going wrangling over Britain’s referendum to leave the EU.
However, now that the so-called “party of business” has been returned with a solid majority, perhaps businesses will see some action on the issues that have left them feeling that they were overburdened and struggling to carry a heavy weight with little support.
While many business groups have been calling for the closest possible trade alignment with the EU post-Brexit it will be a year – or more – before the shape of any deal is known.
In the meantime, there are plenty of items on the business post-election wish-list that can be progressed.
Perhaps the biggest and most pressing burden needing attention is a thorough reform of Business Rates.  Of course, the loudest cries for this have come from the retail sector, particularly from High Street retailers, but there is no question that the current levels, and the slow pace with which appeals are addressed, is a heavy burden for many SMEs.
However, the Federation for Small Businesses (FSB) leader Mike Cherry, has warned that it could take up to five years to complete a rates review and reform
Arguably of equal importance is the difficulty many businesses have in finding people with the appropriate skills and this has been impeding growth plans.
While the new Prime Minister has promised an overhaul of immigration policy, this will affect how and who firms can recruit. It remains to be seen how the proposed three-tier points-based system will work.
The idea is to fast track so-called Tier One entrants such as entrepreneurs, investors and people who have won awards in certain fields, and Tier Two people, skilled workers, such as doctors, nurses and other health professionals, who have a confirmed job offer leaving the need for less skilled, people such as for as agriculture and manufacturing as a problem. Essentially Tier Three employers will most likely have to show that they cannot recruit enough people from within the UK before other entrants are allowed into the country which may take some time and leave them with short and medium term staffing shortages.
Indeed business organisations such as the Confederation of British Industry (CBI) have said that the current immigration proposals are vague and impeding businesses’ ability to plan for growing staffing levels.
The final and most pressing issue, on which the Government has promised action and investment is the country’s neglected and in some cases crumbling infrastructure, particularly in areas like the North and Midlands.
Whether improving communications such as road and rail links, or broadband connectivity, it is going to require significant financial investment and given the lack of growth and current weak economy it remains to be seen how much money is in the Chancellor’s pot come the first budget in March.
 

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Business Development & Marketing General

If you want more effective meetings don’t use PowerPoint or bullet points

effective meetingsEffective meetings depend on discussion that is constructive and to the point, and on wasting as little time as possible.
It has been calculated that the average executive spends around 50 percent of his or her time in meetings of which at least a third are useless.
This was the finding of a 3M study carried out by Annenberg school of communications, University of Southern California, Los Angeles, in 1989.
Studying effective meetings has been ongoing for years and certainly since the 1960s and there has been a growing body of evidence to support the 1989 findings, which suggests that executive productivity could be much improved.
There is an assumption that using lists or PowerPoint presentations can result in more effective meetings, but in fact, this has proven to be incorrect, as Amazon CEO @Jeff Bezos and subsequently others have proved.
A couple of years ago Bezos banned the use of PowerPoint and bullet point slides in executive meetings requiring instead that everyone sits silently for about 30 minutes to read a six-page memo that’s narratively structured with real sentences, topic sentences, verbs, and nouns.
Once everyone has finished reading the meeting memo then the topic is discussed. It has proved to be so effective that is has since been adopted by other CEOs.

Why does a narrative structure produce more effective meetings that use of PowerPoint?

Storytelling has been a part of human culture since we first discovered the use of fire. Anthropologists and historians argue that fire encouraged people to congregate by sitting around the campfire swapping stories as a way of teaching, warning, and inspiring others in pre-literate societies.
But there is more to it than that.
To be persuasive, an argument has to appeal to logic and reason, and also to emotion, which neuroscientists have found is the fastest path to the brain.
Bezos is quoted as saying: “”I’m actually a big fan of anecdotes in business,” arguing that often there is greater insight to be gained from customer emails than from data.
Basically, the scientific evidence is that our brains do not respond well to, or retain, lists. Our brains respond much better to text and even more so when the text is accompanied by pictures.
So, it should be no surprise that effective meetings are more likely to result from getting everyone to read a well-constructed narrative memo at the start, which gives everyone attending the same, essential information before any discussion begins.
The result is a much more informed discussion in which more people feel able to participate, rather than those “usual suspects” with the loudest voices.
Not only this, but the narrative memo provides an essential historical record of background and context for those who are not attending the meeting.
Ultimately using narrative rather than bullet point lists and PowerPoint slides will cut down on the time it takes to reach collective decisions, thus saving executive time and improving efficiency.
We should restrict PowerPoint for use as a tool for making a sales pitch and recognise those who use it in a meeting as trying to sell an outcome rather than seek to discuss the topic.

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Business Development & Marketing Finance General HR, Redundancy & Trade Unions

The Good Business Charter may be the dawn of a new era

Good Business Charter for new decadeA new form of accreditation launched at the CBI conference in November, the Good Business Charter aims to promote a more responsible way forward for capitalism, business and the economy as the new decade begins.
Businesses can sign up to the new voluntary code, but they will have to provide evidence that they are following the ten principles enshrined in the Good Business Charter.
The Good Business Charter, which is supported by the Confederation of British Industry (CBI), the Trades Union Congress (TUC) and managed by an independent not for profit organisation, has been funded by Julian Richer, the founder of retail chain Richer Sounds.
Early last year Mr Richer handed over control of his company, Richer Sounds, to his employees, transferring 60% of his shares into a trust.
Launching the initiative at the CBI conference, the current Director General, Carolyn Fairbairn, said: “Without successful, responsible, passionate business, creating wealth and opportunity across the country and working in close partnership with government.
“… Business has always been about profit but it’s also been about so much more. It’s about making a difference. Creating jobs, services, products, ideas, opportunities.
“This is a time to talk about and even more importantly — demonstrate – that profit comes with purpose.”
To become accredited, participants in the Good Business Charter Scheme will have to undertake to pay employees the real living wage, give workers a voice in the boardroom, commit to prompt payment of suppliers, treat their customers fairly, agree not to engage in tax avoidance and show efforts to reduce their environmental impact including sourcing materials ethically.
The full list of ten principles can be found on the organisation’s website.
There has been mounting evidence for some time that both customers and investors, not to mention employees, want to see businesses behaving more ethically and in particular paying far greater attention to their environmental impact.
There is no better time for businesses to change their practices than the start of a new decade.
The Good Business Charter offers businesses a way of demonstrating their social responsibility and may be the dawn of a new era.
I wish you a happy new year and good fortune for the coming decade.

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Business Development & Marketing Finance General

Addressing the UK skills shortage must be high on the new Government’s to do list

skills shortageBusinesses’ difficulties due to the UK’s skills shortage were high on their list for prompt Government action in the run-up to last week’s General Election.
The skills shortage was said to be inhibiting SMEs’ efforts to compete in global markets, particularly in areas related to digital and new technology.
A quarterly study by the BCC (British Chambers of Commerce) published in November found that 73% of firms that attempted to take on extra workers faced recruitment difficulties in Q3, up from the 64% recorded in Q2.
The skills shortage was compounded, according to Grant Thornton, by a low take-up of the cash available to businesses from the apprenticeship levy with almost half of eligible businesses having not yet spent the money available to them for workplace training.
This week, the Evening Standard carried a letter from Andrew Harding, chief executive – management accounting, at the Chartered Institute of Management Accountants, urging the new Government to review national education and skills policies, in particular the apprenticeships programme in order to address the skills shortage.
Added to all this is the rate at which EU workers have been leaving the UK, with Labour Market figures published in early November revealing that there had been a 132,000 drop in the number of citizens from other European Union countries working in Britain. Later in the month, the BBC reported that EU net migration to the UK had fallen to its lowest level for 16 years.
Yesterday, the latest ONS (Office for National Statistics) report revealed that in the three months to October UK unemployment fell to its lowest level since January 1975.
So, the numbers of people available for work are rapidly shrinking due to a combination of factors, including the uncertainties over immigration policy following the UK departure from the EU, the much-publicised failure of the apprenticeship scheme and the shrinking pool of available UK citizens with the right skills available for employment.
Yesterday’s employment statistics prompted Tej Parikh, chief economist at the Institute of Directors, to argue “”With some strains now appearing in the labour market, the new Government must push ahead with its plans to revamp the UK’s skills system, while initiatives to drive up business productivity should also support stronger wage growth.
“Businesses are eager for the details behind flagship policies like the National Skills Fund and reform to the Apprenticeship Levy.”
For almost three years the Government has been so wholly focused on the Brexit issue, while pressing domestic concerns have been ignored.
Now that the General Election is over with a resulting clear Government majority, it is urgent that the skills shortage is given a high priority among the many pressing concerns of businesses.

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Purpose oriented leadership gives employees a reason to be engaged

purpose oriented leadershipPerforming tasks to order is not enough to motivate 21st Century employees and instead they need purpose oriented leadership to understand the “why” of their organisation.
The purpose needs to be defined and made meaningful in a way that simply stating “making a profit” or “increasing sales” do not.
Generally, workers will perform more effectively if they believe in what their company is doing and how it is contributing to the common social good. This has been described as having a higher-oriented purpose. 
But this means that the most successful leaders need to be able to communicate their vision and to have good narrative skills in order to do so.
Amazon founder and CEO Jeff Bezos, for example, has banned PowerPoint in executive meetings. Instead, he believes that “narrative structure” is more effective because human brains are wired to respond to storytelling.
good example of effective purpose oriented leadership is Gerry Anderson the president of Detroit-based DTE Energy, which supplies electricity and gas to South Michigan customers.
An article in the Harvard Business Review describes how, after the 2008 Financial Meltdown, Anderson realised that DTE employees were not very engaged and could not seem to break away from tired, old behaviours.
He commissioned a video that “showed DTE’s truck drivers, plant operators, corporate leaders, and many others doing their job and described the impact of their work on the well-being of the community — such as on factory workers, teachers, and doctors who needed the energy DTE generated”.
These stories effectively demonstrated DTE’s statement of purpose: “We serve with our energy, the lifeblood of communities and the engine of progress.”
Purpose oriented leadership is becoming ever more crucial for engaging employees in 21st Century business.
A PwC study reported in Forbes magazine in 2018 revealed that millennials who have a strong connection to the purpose of their organization are 5.3 times more likely to stay but only 33% of employees drew real meaning from their employer’s purpose.
Similarly, new data collected by PR Week shows that customers view purpose-driven brands as being more caring and, as a result, are more loyal to them. It reported that 67% of respondents said they feel companies with a purpose care more about them and their families and ~80% of respondents said they’re more loyal to purpose brands, while 73% said they would defend them.
I have mentioned in previous blogs that there is a growing shift, among investors, consumers and employees, towards more ethical businesses, partly, but not only, down to the rising concern about climate change.
Clearly, business leaders are going to have to think more deeply about the purpose and goals of their organisations and to define them more specifically. They also need to communicate the purpose and goals if they are to survive since this involves nurturing loyal employees and customers.
 

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Business Development & Marketing Cash Flow & Forecasting Finance General

VUCA – protecting your business when nothing is predictable

VUCA uncertaintyVUCA is an acronym devised by the US military to describe an environment of Volatility, Uncertainty, Complexity, and Ambiguity.
But it doesn’t only apply to conflict zones. At the moment, and for the foreseeable future, it could equally well describe the climate in which business is operating.
For UK businesses the predominant uncertainty has been the situation, arguably since June 2016, when the country voted by a narrow margin to leave the EU. Since then, there have been three years of VUCA which won’t end tomorrow when we know the outcome of today’s General Election.
In the meantime, the UK economy has been sluggish, with the latest data from the ONS this week indicating that there had been almost no growth, a derisory 0.7%, in the third quarter of the year.
However, there are other influences that have combined to make uncertainty the new business norm, including a rise in nationalistic sentiment and population, trade wars between the US and China and also those between Japan and S Korea, all of which have led to a slowdown in the global economy.
Longer-term influences are the rapid pace of automation and AI development and, increasingly, worries about the future of the environment, which are influencing both consumer and investors in the direction of more ethical and responsible behaviour and decision-making.
Given the headwinds, VUCA is likely to get worse and will affect businesses for a long time to come.

Can businesses turn VUCA into a positive?

Despite its reference, VUCA offers terrific opportunities to entrepreneurs and adaptable businesses although exploiting them tends to be at the expense of those businesses, normally large ones, that rely on stability and predictability.
The website  vuca-world.org re-imagines the acronym as Vision, Understanding, Clarity and Adaptability and several business writers, among them Karen Martin and Sunnie Giles, both writing for Forbes, make the point that ultimately dealing with uncertainty is down to the creativity, agility and skill of people in an organisation.
Giles suggests that businesses need a change of mindset, so that they can react to fast-moving changes.
These include “moving from hierarchy to self-organisation”, “democratising information”, “speeding up interactions” and using “simple rules to make quick decisions, rather than perfect analyses.”
Of course, there will need to be effective and flexible leadership and a sound knowledge of the business situation at any point in time, which makes such things as management accounts and cash flow monitoring, as well as sound knowledge of customers’ changing behaviour and requirements even more crucial.
I would argue that it is often SMEs that are in the best position to deal with a VUCA climate as very often they are flatter organisations where there has to be a good deal of multi-tasking when the numbers of key employees are fewer than in larger, more hierarchical organisations.

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Sector focus – changes in consumer spending and attitudes?

consumer spendingIt will be interesting to see the analysis of consumer spending once the Christmas and peak holiday buying season is over.
Data throughout the year has indicated that people are less willing to splash out on so-called “big ticket” items, whether online or on the High Street.
Whether this is being caused by a change in attitudes to consumption or to increasing worries about job security and income is not yet clear. Consumption assumes spending on basic needs and then discretionary spending on goods and services including leisure.
Influences on consumer spending
Clearly, consumers’ confidence in their current and future financial situations are a key driver in the willingness to spend at least in the short term.
It is influenced in part by the changing costs of expenditure on such things as housing, fuel, food, clothing and travel costs, which are monitored annually by the Consumer Price Index (CPI), where the weighted average of prices of a basket of consumer goods and services indicates the level of and changes to the rate of inflation in the economy.
This has left less for discretionary spending.
An indicator of spending on capital goods is this year’s fall in the purchases of new cars, attributed by the Society of Motor Manufacturers and Traders to weak business and consumer confidence, economic uncertainty and confusion over diesel and clean air zones.
There has also been a reduction in consumer spending on both the High Street and online which has contributed to the closures of High Street retailers, and reduced profits of online retailers such as Asos, whose profits were reportedly down 68% in the year up to October, altbough   Asos attributed this to IT problems in its warehouses.
A study by the card machine provider Paymentsense at the start of the year predicted that over half (56%) of UK consumers were planning or considering cutting their spending over the coming year by cutting back on purchases of goods like new clothes (31%), sweets, crisps, cake and chocolate (27%), and switching to less expensive toiletries (18%). This was closely followed by spending less on jewellery and holidays which require a flight (both 17%).
This is not surprising given that research by KPMG and the Recruitment and Employment Confederation (REC) showed that the number of permanent job appointments fell in November as growth in the demand for staff fell to a 10-year low.
Employment in the manufacturing sector also fell for the eighth month in a row and the pace of job losses was the steepest since September 2012 according to the latest IHS Markit/Cips monthly snapshot.
It would be interesting to see how many people (mainly women) have lost their jobs in the ongoing carnage in High Street Retail.
At the same time, the Office for National Statistics (ONS) has reported that average household financial debt had risen 9% to £9,400 in the two years to March 2018. The biennial study showed that personal loans accounted for £35bn of total household debts, £32bn is from student loans, £25bn is hire purchase, and £22bn is on credit cards, while the remainder includes £3bn of overdrafts. Much of this, it has been argued, is due to increased living costs, such as rent, council tax and other bills.
It is fairly certain, therefore, that worries about the future and job insecurity are influencing consumer spending currently.
Having said all this, however, the recent Black Friday sales saw an average 7% increase in sales compared to last year.
This could be seen as a change in consumer spending to waiting to buy until prices are, allegedly, reduced.
It will take more than a year to determine whether a longer-term change in consumer spending habits is taking place, however, there are other factors at play.
Concern for the environment and global warming have risen to the top of the agenda, in particular for younger consumers, which has encouraged people to think twice about buying fast fashion and disposable and other plastic items.
Buying second-hand has been re-branded as “pre-loved chic” and the demand for longer-lasting household products such as fridges, washing machines and the like has prompted the EU to regulate that manufactures must stock spare parts for ten years for such items.
Then there have been the movements encouraging people to buy from local independent retailers as well as the rise of local groups specialising in helping people to repair household items such as small kitchen appliances.
Guy Moreve, CMO of Paymentsense, said “…. our study reveals that instead of aspirational health or lifestyle goals many UK consumers are increasingly concerned about just keeping up as living costs climb more quickly than salaries.
“Another growing trend is ethical consumption, and over 2018 we saw increased awareness and attention to environmentally friendly lifestyle habits such as veganism and sustainable fashion. We feel that this coming year will see continued movement in this area, as more people adopt ethical attitudes.”
Time will tell whether the “shop till you drop” love affair is finally over and there is a sustained change in consumer spending.

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Business Development & Marketing General HR, Redundancy & Trade Unions

Fair treatment of employees is a cornerstone for improving productivity

fair treatment equals improved productivityImproving productivity is a concern for all businesses but it is harder to achieve if employees do not believe they are receiving fair treatment.
As I have said in many previous blogs, a motivated workforce is more likely to go the extra mile if they feel valued as people, this means managers treating them with respect, listening to them, showing consideration to them, recognising their contribution, rewarding their contribution and protecting them from inappropriate behaviour by others at work. In summary treating them with respect and showing them that their effort is valued.
Recognition can simply be saying “thank you” for a job well done, it is not just about money.
However, money can become an issue when there is a clear disparity in pay. While discrimination is illegal and applies to any disparity of remuneration on grounds of gender, race, religion or ethnicity, this is not about legislating for staff motivation.
To be motivated staff need to feel they are treated equally which means people doing the same job expecting the same pay and other benefits albeit they will acknowledge any adjustment to pay scales based on valid reasons such as experience, length of service, sickness record, additional responsibilities or other factors. The key is that the reasons for any difference in pay are legal, explicit and understood by everyone.
Two years ago, in April 2017, the government made some efforts to address unequal pay treatment with the introduction of mandatory gender pay gap reporting (GPGR) for both the private and public sectors employing 250-plus people.
It then launched an inquiry into whether organisations should also be required to report on the pay differentials between people from different ethnic backgrounds, although as yet no decision has been reached largely, it is argued, because ethnicity is a very complex subject.
GPGR is regulated by the Equality and Human Rights Commission, and while it can take businesses to court for non-compliance and obtain an order to force them to, it has no enforcement powers beyond “naming and shaming” them.
So recent reports on the situation two years on are not encouraging reading.
The BBC cited figures from the ONS (Office for National Statistics) for the year to April 2019, saying that the gender pay gap for full-time workers rose to 8.9% – up from 8.6% the previous year.
Quoted in the article is TUC general secretary Frances O’Grady:  “Government must pick up the pace. It’s clear that publishing gender pay gaps isn’t enough on its own. Companies must also be legally required to explain how they’ll close them.”
Andy Haldane, a member of the Bank of England’s Monetary Policy Committee, has recently said that the GPGR obligation should be widened to include SMEs with 30 or more employees, something that was dismissed by FSB chairman Mike Cherry because there would be a number of practical difficulties in businesses with such small work forces.
The BoE (Bank of England) has also recently analysed its data and found that ethnic minorities in the UK earn around 10% less than white workers. Andy Haldane said the gap is “strikingly” persistent, having narrowed far less the than the pay disparity between genders over the past 25 years.
But fair treatment extends beyond disparities on pay.  It is also about such issues as bullying and harassment and again, recent findings show some concerns.
According to a CityAM report investigations by Business in the Community found that as many as a quarter of all ethnic minority employees at British businesses are having to put up with bullying and harassment, despite 97% of businesses having a zero tolerance policy to bullying and harassment.
A study by Equileap, which researches corporate gender equality, has found that almost six out of 10 global companies do not have an anti-sexual harassment policy.
Clearly, there is a long way to go before there is fair treatment for all workers, but if businesses want to survive and prosper in a difficult global and domestic economic climate, amid skills shortages and the uncertainties of Brexit, they would be well advised to put it much higher up their agenda than it seems many currently do.

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Business Development & Marketing Cash Flow & Forecasting Finance General Insolvency

Diversity of thought is about more than challenging stereotypes and ticking a box

diversity of thoughtToo often the word diversity as applied to directors of companies is seen as demonstrating representation by gender, ethnicity, religion, and possibly of age. But it should actually be about more than that, it should also be about diversity of thought and ideas.
The challenges facing businesses in the 21st Century are becoming more complex and happening at a faster pace so it makes sense to have people at board level who think differently and can communicate their ideas.
In a recent survey carried out by Social Mobility Pledge as reported by The Times newspaper, the researchers found that by and large “who you know” was still the most important factor when promoting staff.
Sadly, the inference from this is that recruitment tends to favour like-minded people, which is hardly helpful to businesses wanting to avoid being stuck in a rut.
The ability to challenge the status quo at all levels and in particular a board level was a topic discussed in a recent vimeo by Kenneth McKellar, a partner at AGM Transitions, which advises senior executives on their career transitions and roles.
He argues that every business needs people who can challenge the organisation and this means choosing directors from a wide variety of backgrounds, education and disciplines as being more important than simply having more women on the board which seems to be the focus of most FTSE 100 companies seeking to observe the UK Corporate Governance Code.
Being open to people from different educational backgrounds and with different experiences can bring different ways of thinking, different knowledge bases and different perspectives to problem-solving.
The challenge for boards is to avoid groupthink despite the natural desire among teams to seek harmony and conformity since groupthink can lead to irrational and dysfunctional decision-making.
This is also about people’s preferred ways of thinking as shown in the Hermann Whole Brain ® Model which was the result of research originally conducted at GE’s corporate university, Crotonville.
It describes four main modes of thinking, analytical, organized, interpersonal and strategic, each of which has a value in promoting diversity of thought in the workplace and at board level. Of course, this is likely to lead to differences of opinion which might imply conflict. However, such differences ought to be regarded as healthy if a business is to consider the challenges of the future and continuously change to meet them.
Ultimately businesses need people who represent a range of thinking and of ideas with the ability to think laterally, who can disagree in a way that leads to collective decisions.
‘Yes’ men and women may keep their job but they ultimately they contribute to the decline of their business due to their going along with others instead of contributing in a constructive way that improves the decisions made.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance Insolvency

Directors of companies in financial difficulties should be aware of their pay and perks!

executive pay and perks under scrutinyExecutive pay and perks have been creeping up the agenda with politicians and the public increasingly questioning the rewards given to top CEOs when companies fail.
But should this be done well before any potential failure and in particular when highly paid executives are seeking support for the restructuring and reorganisation initiatives that is necessary when their company is in financial difficulties?
Leadership involves setting an example and when the chips are down this means making demonstrable self-sacrifices.
This week, the Financial Times reported that Standard Chartered bank CEO Bill Winters may have his total pay cut and Namal Nawana will be leaving his CEO role at Smith & Nephew after less than a year after investors turned down his request to increase his $6m package to nearer $18m-$20m.
But it is not only executive pay that has come under fire, this is also true of pensions and other executive benefits.
In September the influential investor group IA (The Investment Association), told companies they must publish credible action plans that align executive pension pay with their workforce by 2022, or risk further shareholder revolts.
A Guardian report revealed that the IA, which represents City firms with £7.7tn in assets under management, has warned that it will “slap companies’ annual reports with a “red top” or highest possible warning label if they fail to share concrete action plans to align executive pension pay with the majority of staff and continue to offer top bosses retirement benefits worth over 25% of salary”.
Clearly shareholders are becoming less willing to support the “greed is good” philosophy that grew out of the Chicago School economist Milton Friedman’s Neoliberal economic model whereby businesses exist solely to make money for their shareholders and executives should be rewarded accordingly.
How much of this is due to external pressures, such as the growing awareness that perpetual growth is incompatible with a sustainable environment, and how much to a seemingly endless series of high profile business collapses, from Carillion to Thomas Cook with massive debts but still high executive pay and perks?
Are CEOs worth their executive pay and perks?
The CIPD (Chartered Institute of Personnel Development) monitors the gap between average CEO pay and that of workers.
Its most recent report found that average salaries for chief executives fell by 13% between 2017 and 2018, but they still earned 117 times more than the average UK full-time worker, despite the introduction of new standards for corporate governance and the introduction of the Audit, Reporting and Governance Authority by the Government earlier in the year
The argument has always been that in order to attract the best a business has to pay for talent, but beyond their annual reports, there is little or no guidance, or seemingly effort, made to monitor effectiveness or track improvements in profitability following the appointment of new CEOs.
In the most recent example, the death of travel company Thomas Cook, only now are questions being asked about the high remuneration of its CEO and executives when contrasted with its massive accumulated debt, and about the wisdom of turning down offers for lucrative parts of the business that might have made a difference.
At a recent event, moreover, Charles Cotton, CIPD senior adviser for performance and reward, said employers risked sending the message that executives’ contributions were “valued more highly” if their pay was rising when employee salaries had remained largely stagnant since 2008.
Clearly, there is a need for much more awareness among executive about the messages their pay and perks convey to stakeholders. The level of scrutiny they are being subjected to will only increase.

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Banks, Lenders & Investors Business Development & Marketing Finance Rescue, Restructuring & Recovery

WeWork reminds us why we should not rely on charismatic leaders and the investment bank advisers who flatter them

WeWork corporate hubrisThis week the new management of WeWork the business space property rental company announced that it was preparing to axe 2,000, or 13%, of its workforce.
It has been calculated that up to 5,000, or a third, of the workforce will ultimately have to go.
This is the latest episode in an increasingly sorry saga, which last month saw its co-founder Adam Neumann step down as chief executive and relinquish control over the company. Mr Neumann also returned $5.9m worth of stock to the firm, which he had controversially received in exchange for his claim over the “We” trademark.
After announcing its intention to launch on the US stock market earlier in the year, the company, which has more than 500 locations in 29 countries, had to postpone its plans when its viability and corporate governance came under closer scrutiny.
The business, which was estimated to be worth some $47bn when the intended float was first unveiled has since had its credit rating downgraded by the ratings company Fitch to CCC+ with a warning that its liquidity position is “precarious”. Earlier in September, Reuters had reported that the We Company could seek a valuation in its initial public offering (IPO) of between $10bn and $12bn, far below the $47bn at the start of the year. This figure is very different to valuations proposed for the IPO work reported in the Financial Times as between $46bn and $63bn by JP Morgan Chase, between $61bn and $96bn by Goldman Sachs and between $43bn and $104bn by Morgan Stanley.
These values were despite WeWork reporting a loss last year of $1.9 billion from revenue of $1.8 billion, these figures almost double those for 2017.
The recent turmoil is no doubt behind the recent announcement by two of its large landlords in London who have said they will not be signing new leases with WeWork for the foreseeable future.
Yet, there are other companies operating similar business models, such as the UK listed IWG group that owns the Regus brand which reported a net profit of £106 million from revenue £2.5bn. Two other similar business would also seem to be doing well: The Office Group and The Argyll Club formerly London Executive Offices.
As for valuations, IWG’s market capitalisation is about £3.5bn which is far lower than those proposed for WeWork but as a listed company might be more realistic.
Another example of value for a similar business model is the sale in October 2018 for £475 of London Executive Offices that had been up for sale for two year sale after an initial valuation in 2016 of £700m.

Hubris eventually catches up

Much has been made of the character and lifestyle of Adam Neumann, not least the mixing of work and pleasure, which was also part of the WeWork culture, one that offered that will offered employees “every millennial-style benefit under the sun”, which may not be right for a property letting company.
He was famous for statements like “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”
Clearly his character initially charmed the company’s Japanese investor SoftBank, which owns 30% of the company and whose reputation arguably contributed to the initial IPO valuation of $47bn.
However, since then, potential investors have questioned its opaque corporate structure, governance and profitability. They have also questioned the links between Mr Neumann’s personal finances and WeWork.
The whole sorry saga, I would argue, is more about the initial credulous nature of the company’s investors and their belief in Mr Neumann, and less about a business model which has worked well for other similar companies. And the investment banks haven’t helped.

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Business Development & Marketing Cash Flow & Forecasting Finance Rescue, Restructuring & Recovery

Recession, imminent or not is it time to ban the word?

recession storm cloudsRecession is a word that has immense power, striking apprehension into the hearts of businesses, politicians and consumers alike.
Talk of a recession can also precipitate the very economic conditions that are so feared and it is worrying that the word is currently appearing regularly in the daily news media.
But is recession a useful concept especially in the context of increasing pressure to move to sustainable, rather than perpetual, economic growth, in order to combat climate change and global warming?
Should we keep growing?
The generally-accepted definition of a recession is, according to the Business Dictionary: a contraction in the GDP for six months (two consecutive quarters) or longer. It goes on to say: “Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression. Although [they] are considered a normal part of a capitalist economy, there is no unanimity of economists on its causes.”
So, by these measures, the UK has its highest ever employment and rising wages and is not in recession. On the other hand, it is suffering from falling retail sales, apparently now online as well as on the High Street, as a result, we are told, of declining consumer confidence and worries over future job stability.
Clearly, an imminent recession has been a worry for some time, at least as far as the media has been concerned.
Over the course of the last two months, every time the latest confidence and productivity figures have been announced it has prompted speculation.
In early September, the Sunday Times reported data from MakeUK and BDO who both indicated falls in factory output and from the CBI (Confederation of British Industry) whose latest growth indicator showed a continued decline in services and distribution volumes.
Later in the month these same two bodies were reporting that domestic orders in the UK manufacturing sector had declined in the third quarter for the first time in three years as well as reporting weakening export orders.
Purchasing managers’ monthly indexes from IHS Markit/CIPS throughout the month showed declining confidence in the services, manufacturing and construction sectors.
And so it went on until by the start of October, the Guardian was claiming that a recession was on the way.
In view of the persistent pessimistic data one might wonder how we are not in a recession.
It might be explained by the alternative views based on other data. For example, the Economist carried an opinion piece that pointed out that the last two recessions, between August 2000 and September 2001, and then in 2008, had been as a result of “epic financial crisis” accompanied by stock market crashes.
It then argued that a recession was as much a matter of mood as it was of any reliable economic signals and signs.
Meanwhile on September 27 David Blanchflower, Professor of economics at Dartmouth College in the US and member of the MPC (Monetary Policy Committee at the Bank of England) from 2006-09, argued that the UK was already in recession, even though the conditions for the technical definition had not yet been fulfilled.
Ah, so it is down to the definition of recession. Is a recession now like news: fake or real? And what is a technical recession?
Blanchflower based his argument on the fall in “how businesses are doing on turnover, capacity constraints, employment and investment intentions” arguing that since GDP figures are actually regularly revised after their initial announcement they cannot be used as an indicator of recession.
Confused? That’s no surprise!
This is why I am suggesting that the widespread use of the term is less than helpful to businesses trying to navigate their way through the admittedly uncertain landscapes of imminent Brexit, global trade wars and political mayhem.
They would be much better served by focusing on their cash flow, balance sheets, growth plans and other data in order to remain sustainable and profitable, whatever the surrounding, feverish “mood music” of recession talk.

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Business Development & Marketing Cash Flow & Forecasting Finance General Turnaround

The state of manufacturing in the UK and globally – October Key Indicator

the state of manufacturing - redundant machinesThis month’s Key Indicator looks at the state of manufacturing in the UK and globally and by all indications, it is struggling everywhere.
While the proportion of manufacturing as a part of individual national economies varies all economies depend on trade with each other and in an interconnected world a slowdown in one place can have a significant impact on others.
China is currently the No 1 in the world in terms of manufacturing output valued at $2,010 billion representing 27% of national output. USA is second ($1,867, 12%); Japan third  ($1,063, 19%); followed by Germany ($700, 23%); South Korea ($372, 29%); India ($298, 16%); France ($274, 11%) and Italy ($264, 16%).  The UK trails these countries in ninth place with $244 billion manufacturing output representing 10% of national output.
Poland meanwhile has the highest percentage of its workforce employed in manufacturing, followed by Germany, Italy, Turkey, and South Korea.
In the UK, manufacturing makes up 11% of GVA, 44% of total UK exports and directly employs 2.6 million people. In fact, in August according to IHS Markit/CIPS the UK manufacturing sector fell to a seven-year low.
The CBI (Confederation of British Industry) monthly survey showed that manufacturing order books fell in September to -28 from -13, well below consensus expectations of -16%. While food, drink and tobacco and mechanical engineering drove positive growth, metal manufacture, metal products and textiles and clothing pulled in the opposite direction.
However, figures everywhere over the last few months make grim reading.
IHS Markit’s latest snapshot for September of Germany’s manufacturing growth, where a score under 50 signals contraction, slid to 41.4, the worst reading since June 2009. In fact, the entire Eurozone is experiencing a contraction, according to official data from Eurostat, the statistical office of the European Union in Luxembourg.
In China, Reuters reports that growth in industrial production in August was at its weakest in more than 17 years while in the USA, too, the New York Times reported that in August the manufacturing sector contracted again as it had in July, albeit manufacturing accounts for just 11-12 percent of the country’s gross domestic product.

What is causing the current state of manufacturing in the UK and globally?

In a word, uncertainty is the theme everywhere, but while the primary causes may differ around the world, in many ways the underlying reasons are politics and market economics.
There are two ongoing conflicts: 1. between those who advocate stimulating economies and those who believe we should live within our means; and 2. between those who believe in market forces and those who seek to control them whether by tariffs, duty, currency control or exchange rates.
In September the USA introduced yet another set of trade tariffs on Chinese imports as part of the ongoing trade war launched by US president Donald Trump. The question is what next as tariff talks between the two are due to resume in October.
In the UK, clearly, the ongoing uncertainty is primarily over when, if or whether the country will finally resolve its various dilemmas over leaving the EU at the end of October as Prime Minister Boris Johnson continues to promise.
Manufacturers anticipate that output volumes will fall briskly over the next quarter and that output price inflation will accelerate in the next three months, above the long-run average. Anna Leach, deputy chief economist at the CBI, said: “UK manufacturers have become noticeably gloomier in September.”
However, arguably the three-year Brexit wrangle has had its repercussions well beyond the UK as manufacturing supply chains are so closely interwoven across the EU. The effects of the reduced value of £Sterling against the Euro and other currencies has added significant costs to importing of raw materials and components, which has had a significant impact on the automotive industry particularly.
There is little sign that the politicians will shift their stance on the big issues but the one element that so far does not seem to have been factored into the arguments is the effect of climate change and the damage to the environment.
This is an issue that has become so pressing that it is just faintly possible that it could prompt a radical rethink in the way businesses trade globally, the way goods are manufactured and what goods will, or should, be made in the future, and above all on how national and global economies should measure economic success.
Perhaps this presents an opportunity for SMEs to come up with new and innovative ideas that will promote sustainable growth without the endless competition that currently seems to dominate the discussion?

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What is AIM and is it beneficial to SMEs to apply for AIM listing?

aim for growing businessIt is coming up to 25 years since AIM (Alternative Investments Market), the London Stock Exchange’s junior stock market, was launched and it now lists around 3,600 businesses.
According to the accounting firm BDO, “AIM is the most successful growth market of its type in the world” and in the last five years AIM-listed businesses “have created an additional 76% jobs, now employing almost 390,000 people”.
The London Stock Exchange website explains that AIM is targeted at smaller, and growing, businesses and offers them “the benefits of a world-class public market within a regulatory environment designed specifically to meet their needs”.
It is a multilateral trading facility, operated and regulated by the London Stock Exchange under FCA rules.
Candidates for AIM listing do not have to have a trading track record, but they must abide by the rules. There are very clear guidelines on how to apply for AIM listing on the Stock Exchange website.
They must appoint and maintain an AIM approved Nominated Advisor, also known as a NOMAD, who is responsible to the Exchange for assessing the appropriateness of an applicant for AIM. The NOMAD also advises and guides their client through the AIM listing process and once listed ensures it complies with its ongoing responsibilities.
The Stock Exchange will suspend trading of the company if it ceases to retain a nominated advisor and if a new NOMAD is not appointed within a month, its AIM listing is cancelled and its shares can no longer be publicly bought or sold.
Albeit with advice from a NOMAD, application for AIM listing is relatively straightforward but listing does cost an estimated £400,000 to £600,000 a year. This covers the NOMAD and other adviser and broker fees, plus AIM membership at around £100,000 per year, according to the website startups.co.uk.
Startups lists some of the pros and cons of AIM listing, the main advantage being future access to raising further funds after the IPO (Initial Public Offering). It says, “AIM listing is being seen as an increasingly attractive investment class to institutions such as pension funds”.
“It also raises the profile of a business, as does having Plc status”, it says. While Plc status requires a minimum of £50,000 share capital, AIM companies tend to have much more and there is the attraction of having publicly tradeable shares.
The downsides according to Startups, are not only the financial cost but also the difference between running a Plc as opposed to a privately-owned business, plus the business will be vulnerable to the ups and downs of share values.
I would add another downside, the need to make public disclosures about matters that influence the share price. This may be great when an AIM company is doing well but can be disastrous for one that isn’t, especially one that needs restructuring.

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Chaos and Confusion or Order and Clarity? Where are SMEs now with Brexit Planning?

Brexit planning - which way?Brexit planning will continue to dominate the thinking and expenditure of the UK’s SMEs as Parliament is suspended for five weeks and the Government’s plans for leaving the EU on October 31 seem to be in tatters.
Parliament has forced the Prime Minister and cabinet to release its documents, called Operation Yellowhammer, on planning for a No Deal Brexit and has also blocked the possibility of the latter. Both are now, in theory, legal requirements as Acts of Parliament.  However, disagreement prevails.
It is questionable whether the government will obey the law, especially if they can find a way out. Furthermore, there is now no Parliament, or Parliamentary Committees, sitting to scrutinise the Government although the press and Courts are fully engaged.
Notwithstanding the political gymnastics, businesses are deluged with upbeat exhortations and alleged offers of help of which the following is a selection from the last six weeks or so.
Liz Truss, the then International Trade Secretary, described Brexit as a “golden opportunity” for UK businesses and Lord Wolfson, CEO of Next was reported in the Mail on Sunday as being no longer fearful of a no-deal Brexit now that Boris Johnson is Prime Minister. One wonders whether he is now preparing to eat his words.
Last week Alex Brazier, the executive director for financial stability, strategy and risk at the Bank of England, claimed the UK’s financial system will remain stable after Brexit.  Indeed, the BoE now claim a hard Brexit won’t be as disastrous as they previously claimed.
There have also been announcements of several offers of help to businesses with Brexit Planning.
The Business Secretary Andrea Leadsom has launched a £10m grant scheme for business organisations and trade associations to support businesses in preparing for Brexit ahead of October 31. The fund is open to business organisations and trade associations.
Barclays is to host a series of “Brexit clinics” in October and November, with the sessions designed to help its SME customers after Britain’s departure from the EU.
The Government also launched its own £100 million “Get Ready for Brexit” campaign designed, according to Michael Gove, to “give everyone from small business owners to hauliers and EU citizens, “the facts they need” to prepare for the UK’s departure from the EU on October 31st.”
Also, as I reported in July, the BCC (British Chambers of Commerce) launched its own Brexit planning  guidance.

Is all this Brexit planning help and guidance just “smoke and mirrors”?

There is some evidence from SMEs on the ground that their businesses are already feeling the effects of the long-running Brexit saga and that they still feel there is little clarity to help them with Brexit planning.
Last month a QCA (Quoted Companies Alliance) survey of UK small and mid-cap companies found that 59% said it had distracted them from running their business, 16% have invested less in the UK, 43% say that preparing for Brexit has had a negative impact on their company’s growth while just 24% felt the Government had provided adequate information although more than half had taken steps to prepare for the no-deal scenario as best they could.
The real effects on the ground are already being felt.
The value of central EU public procurement contracts secured by UK businesses fell by 30%, to €108m (£99m) in 2018, from €155m (£142m) in 2017, research by UHY Hacker Young.
The British Ports Association (BPA) has dismissed a £10m Brexit fund for English ports as “a tiny amount of money”.
The UK Food and Drink Industry has highlighted its worries about regulatory clearance required for selling animal products to the European Union, warning that there is a serious possibility that, come October, listed status will not be granted.
Towards the end of last month the Guardian described the impact it has already had on one UK company, a Bristol-based manufacturer of industrial safety valves. It reported that at one time its exports were growing fast, with 130 employees and eight apprentices training to high standards, but since the referendum things have quickly changed. According to the owner: “Some EU customers instantly decided it was too much trouble and switched to EU manufacturers – we lost 10% of the business.”
He reported that to continue to trade in the EU post Brexit he needs to obey rules of origin, recording every raw material, tracking every component, requiring “horrendous” new IT systems, his various valves containing 30,000 different configurations and “tripling our admin workload”.
Order and Clarity for Brexit planning? Not quite yet it seems.
So, my advice to SMEs who have to contend with this ongoing Chaos and Confusion remains as it was in July:
For the time being the sensible strategy may be to hold off on any major investment, to focus rigorously on management accounts and cashflow, and to ensure strategy and business plans are as flexible as possible to cover a range of eventualities. It might even be worth contacting a restructuring adviser as part of your contingency planning.

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Ongoing carnage in consumer services sector as consumers reduce spending in restaurants and bars

consumer services struggle to surviveAs I outlined in my June sector blog, it is not only well-known shops in the consumer services sector that have been struggling.
The restaurant sector has also seen a plethora of big name closures, including Gourmet Burger Kitchen, Carluccios, Prezzo/Chimichanga, Byron, Cafe Rouge, Jamie Oliver’s restaurant group and most recently the Restaurant Group which has announced that it plans to close up to 100 of its Frankie & Benny’s and Chiquito branches.
A recent CBI poll has revealed that the whole of the consumer services sector, which includes hotels, bars, restaurants and leisure firms, has suffered its fourth consecutive fall in business activity with both profits and confidence plummeting.
Rain Newton-Smith, chief economist of the CBI, said: “The idea of a no-deal Brexit is clearly weighing down the economy and is affecting businesses both big and small.”
But, of course, there is much more to all this than Brexit uncertainty weighing on businesses and consumers, although the last week of febrile activity in Parliament on this seemingly now all-consuming issue will not help.

Is this a long-term change in consumer behaviour?

Clearly, worries about future job security after Brexit are playing into the declining numbers of people visiting restaurants, bars and hotels which will have contributed to the ongoing decline in the number of pubs and bars, down 2.4% to 116,880 over the past year.
Aside from the increasing numbers of people choosing to eat in, with ordering home-delivered food becoming more common as reported in my June blog, it seems that dining preferences and tastes are all factors.
A recent analysis in the Guardian newspaper revealed that restaurant numbers had fallen by 3.4% in the year to June. It also suggested that our tastes are changing, so that consumers are moving away from Indian, Italian and Chinese establishments in favour of Middle Eastern, Caribbean and specialist vegetarian rivals.
Perhaps, though, among the most significant long-term trends is the shift in demand towards vegan and vegetarian food, as highlighted by the Verdict analysis of restaurants in their 2019 food trends report.  It said: “The country is ever more aware of the amount of food that is wasted and the effect food and packaging has on the planet”.
The other big issue, plastic use and waste, has also grabbed consumers attention as reported in research by RG Group that highlights this as a significant influence on consumers going forward.
Sustainability, transparency and trust are likely to become ever more important in the choices that consumers make, says RG Group: “Consumers today expect brands to be much more accountable when it comes to whether or not they remain loyal. And frequently, perceived accountability comes in the form of commitment to transparency and more socially responsible values and processes.”
Clearly, it is not enough for the High Street and the consumer services sector as a whole to focus solely on providing a “destination experience” as many have promoted in their quest for relevance.
Businesses in this sector, but also in many others, are likely to have to pay a great deal of attention to consumers’ socially responsible values if they want to retain customer loyalty, to survive and grow.

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Key Indicator – a snapshot of the current state of commodity prices

minerals among the commodity prices going downOngoing fears of a global economic recession, not to mention the escalating trade war between the USA and China, are having an impact on commodity prices.
August has been a particularly torrid month, according to analysts, with iron ore prices in particular suffering a sharp drop – up to 30% according to a report in the Financial Times, although other sources also back this up.
The ongoing uncertainty has also had its effect on oil prices, with OPEC cutting production while the USA has increased theirs. This has had its impact on the futures price of oil, with Brent Crude for October falling 31 cents, or 0.5%, to $60.18 a barrel.
According to the latest analysis from Marketwatch.com, published on August 30, “Commodities will end August with a second straight monthly loss”.
It says that the S & P GSCI index, which tracks 24 commodities across five sectors was down by more than 4% at the end of August, following a fall of 7% in July.
Gold and Silver prices, on the other hand have been steadily rising, with Silver reaching a 1-year peak last week, breaking $17 per ounce and Gold prices rising by almost 7% in August.
In the grain sector, Marketwatch reports the biggest decline in corn, of more than 0.9% over the year. Corn futures prices for August were also down, by 9%.
Bloomberg publishes a useful summary of commodity prices covering three sectors, energy, precious and industrial metals and Agriculture here.
Stability is not yet in sight with the ongoing uncertainties over global trade, fears that Germany will soon fall into recession, the outcome of Brexit still unknown and the latest set of USA-imposed tariffs on Chinese goods kicking in from September 1. As a consequence, predicting what will happen to commodity prices is going to be increasingly difficult for the foreseeable future.
This is not likely to be something businesses will be happy to hear as it makes planning more risky.
 

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SMEs, start-ups and ethical fundraising

ethical fundraising to save the planetFund raising can be a challenge for SMEs and start-ups but there are signs that many are turning to ethical fundraising for their money.
This growing trend is particularly pronounced among younger business founders and entrepreneurs, many of whom are reportedly shunning the venture capital routes that focus primarily on forcing them to grow as fast as possible to generate returns.
With the issues of global warming, climate change and damage to the environment being a major factor among young people it is no surprise that ideas of sustainable growth and ethical sources of finance should be so appealing.
But are they narrowing their options by focusing on ethical fundraising and risking their prospects for growth and possibly their business survival?
It would seem not, according to analysts, as there is also a growing movement among investors, particularly retail investors, to search for investment opportunities specifically with ethical funds.
Lisa Ashford, chief executive of Ethex, says: “Venture capital funding can often be about financial performance and short term returns and exit strategies, sometimes to the detriment of the other impact aspirations of an organisation. That’s not what our investors are about.”
Ethex was started about ten years ago and works to match ethical businesses with investors that shared their values. It only works with businesses that have a clear social mission and those that conform to very high standards of governance and accountability.
The Guardian last year reported on the growing attraction of ethical investing, which its article argued was becoming more attractive to mainstream investment funds.
Nearly 80% of investors across 30 countries told last year’s Schroders’ Global Investor Study that sustainability had become more important to them over the last five years, increasingly seeing sustainability and profits as intertwined.
According to the website hi.co.uk the term ethical “is often used as a catch-all to describe funds managed with social, environmental, or other responsible criteria in mind”.
It says the main approaches of ethical funds are that they usually avoid companies that do harm to society and instead invest in those that have a positive social impact. But it warns investors to do their research diligently to ensure a fund is consistent with their own views.
From the perspective of the SMEs and start-ups ethical funds may actually benefit them through an alignment of culture, environmental awareness, social consciousness and ethics despite pursuing a strategy for slower growth. There is no reason to suppose such businesses cannot be sustainable, not least because of the opportunities for positive marketing messages that speak to their clients’ or customers’ own ethical concerns.

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Is gender parity in business a utopian dream?

gender parity in Soviet statusRarely a week goes by when some aspect of gender parity often defined as equality is not in the headlines.
Back in April, just ahead of a Government deadline for firms to report on the gender pay gap within their businesses, the BBC reported that nothing much had changed since the initiative was announced.
Its analysis revealed that fewer than half the UK’s biggest employers had succeeded in narrowing their gender pay gap. In fact, in 45% of firms the discrepancy in pay increased in favour of men and overall in 75% of businesses the gap was in men’s favour.
By July, the focus had shifted to the representation of women on the boards of FTSE100 and FTSE 350 companies. While representation of women on FTSE100 company boards had improved since 2011, from 12.5% to 32% according to the Hampton-Alexander review, many of the leading broadsheets were accusing businesses of adopting what they called a “one and done” policy and that any such “improvements” were a token gesture.
Furthermore, a study by Cranfield University, supported by the FRC (Financial Reporting Council) found women typically hold executive director positions for half as long as men and are more likely to hold an advisory non-executive position than a top managerial role.
When it came to women entrepreneurs and finance there was not a lot about which to be optimistic.
The Independent reported in August that a mere 13% of senior members of UK investment teams are female and only one in five firms was founded by a woman. Indeed, the Government’s Rose Review found that a lack of start-up funding is the number one barrier preventing women from starting a business, with women starting businesses doing so with 53% less capital on average than men.
The Review of Female Entrepreneurship was carried out by Alison Rose, who is currently CEO of commercial and private banking at NatWest and is in line to become the first female boss of a major UK bank if she secures the role of CEO at RBS.

Is there any chance of realising the utopian dream of gender parity in business?

Firstly, the gender parity issue relates mainly to the number of women in senior roles.  Too many of those opining on the issue only compare the pay data for each gender across businesses often claiming that men earn more than women without acknowledging that women are generally fulfilling the lower paid roles. Commentators all too rarely look at pay levels for the two genders doing the same job.
Indeed, there are plenty of men in business who support the ideal that women and men fulfilling identical roles should be paid the same.  In the same vein most men believe that more women are needed in senior roles.
However, the fact is that culture and work demands on those in senior roles remains deeply biased against women in most businesses.
For example, Andrew Hauser, executive director of markets at the Bank of England, said in a recent speech at an event intended to promote careers in forex to women, that a “bro-culture” encouraged financial crime in the foreign exchange markets in recent years.  He described it as a “toxic male environment” arguing that it made terrible business sense to not have more senior women in finance.
But the problem of encouraging more women to seek senior roles in business goes much deeper than that.
In an article in the Guardian on Sunday, Yvonne Roberts unpicked the assumptions that underpin the discipline of Economics, which she argued would remain “a man’s game” while women’s contribution to the economy continued to be undervalued when compared to men’s.
She quotes Mary-Ann Stephenson, director of WBG (Women’s Budget Group), an international independent think-tank that is now part of a global network of feminist economists: “Classical economics is based on the independent man who works full time and is in control,”. As such, calculations of a country’s GDP (Gross Domestic Product) largely ignores not only women’s direct economic contributions from work and business, but the often-unrecognised social contributions many make that support the smooth running of the economy.
This, the article argues, was recognised by New Zealand’s leader, Jacinda Ardern, whose government in May produced the first ever Wellbeing Budget which allocated millions to child poverty and narrowing the inequality gap.
Clearly utopia will only become a reality if some fundamental and deep-rooted assumptions are changed.

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Post Brexit boom sectors – business opportunities

brexit boom for smaller ports?It is often said that there are winners and losers for every significant event, so which are the post Brexit boom sectors likely to be?
Perhaps the most obvious ones are likely to come from the increase in regulation and compliance requirements for businesses, particularly those in the export sectors.
It is in this area, according to IW Capital, there are opportunities for companies that can devise technology to reduce the amount of time businesses will have to spend on complying with the inevitably more complex requirements that will be imposed by other countries within the EU, but also more widely as businesses explore markets they have perhaps not previously considered.
The exchange rate is likely to have the greatest impact on winners and losers.  Therefore, firms that supply essential goods and services with UK supply chains whose costs are not affected by exchange rates and who do not rely on foreign labour ought to be huge beneficiaries, especially when their competitors rely on imports.
But there are other sectors where there will be lots of opportunities.  News.co.uk also identifies tech start-ups where there are potential post Brexit boom opportunities, but it also suggests that there will be greater opportunities for exporters to non-EU countries thanks to the declining value of £Sterling compared to other currencies.
Another sector it highlights is medical technology, where the UK is a leading contributor, particularly among SMEs, which make up 85% of the sector and had a turnover of £70 billion in 2017.
The Spectator in a piece last autumn predicted that there will be opportunities for the UK’s smaller ports as logistics companies seek out and prioritise alternative, less congested routes.
Another example is the growing interest in CBD (cannabidiol). The Adam Smith Institute in July predicted that this medicinal product derived from cannabis has potential for sustained development in the UK after the Medicines & Healthcare Products Regulatory Authority (MHRA) re-classified CBD in the UK as a medicinal ingredient. No doubt the export market beckons.
Like the somewhat frivolous example above, there are opportunities for nimble SMEs to develop a strategy that takes advantage of Brexit.
There has been so much “doom and gloom” about the post-Brexit economy and supply chains in the last three years, and admittedly there will be some immediate disruption until new systems are in place.
In due course and only once the dust settles we will find out if Brexit benefits the country as a whole but in the disruption lie opportunities for SMEs to seize and create a Brexit advantage.

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Work experience – between a rock and a hard place

work experience should be reintroducedEarlier this year the Federation of Small Businesses (FSB) called for compulsory work experience to be reintroduced for all children aged 14 to 16.
The Government ended schools’ obligation to provide compulsory work experience in 2012.
Since then, although many schools do still try to arrange some work experience, the responsibility for finding placements has rested largely on parents and pupils themselves.  In fact, according to the organisation Changing Education “Ofsted has identified that 75% of schools are failing to provide adequate work experience programmes”.
In 2015 the British Chambers of Commerce (BCC) questioned the wisdom of the 2012 decision, following a study of members that found that “most firms and education leaders believe secondary schools should offer work experience for under 16-year-olds”.
John Longworth, who was then the director general of the BCC, said: “Business and school leaders are clear – we won’t bridge the gap between the world of education and the world of work unless young people spend time in workplaces while still at school.
He may have been correct but the same BCC survey of 3,500 respondents found that just over a third did not offer any work experience.
In March 2017 the Government published its own research into the current state of work experience and among its findings were that “schools took a largely student-led approach, which placed responsibility on young people and their parents/ carers on finding a placement” with many relying on individual staff systems and contacts.
We are wearyingly familiar with the complaints from businesses about the lack of readiness for work among new recruits in their first jobs. They regularly cite specific concerns relating to the punctuality and attitude of such individuals.
In other research carried out in 2016 by the Confederation of British Industry (CBI) a quarter (27%) of employer respondents viewed involvement with schools and colleges as too onerous.
This may be why has not been easy for schools to find enough local employers willing to offer pupils work experience despite various initiatives tried over the years such as the now-defunct local county Exchanges which as NGOs sought to act as an interface between the two by taking care of the perceived bureaucracy involved.
Indeed, the Government’s Apprenticeship scheme launched in 2017 has hardly been a resounding success.
This is the background to the present situation we find ourselves in with employment levels higher than they have ever been and fewer Europeans willing to come to the UK for work as a result of the uncertainty over their status post Brexit, businesses are finding it even harder to recruit suitable employees let alone fill low-skilled jobs.
It seems young people are between a rock and a hard place when it comes to gaining work experience with schools overburdened by cash shortages, the demands of the National Curriculum and the demise of careers guidance while at the same time employers bemoan the lack of preparedness of new recruits while also seemingly unwilling to offer much practical help to improve the situation.
What is the answer?

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The current state of the commercial property sector

commercial property siteWith economic uncertainty prevailing both globally and in the UK it would be no surprise if the commercial property sector was facing some difficulties.
The commercial property sector covers Community, Education, Hotel, Healthcare, Office, Retail and Industrial and it is clear from some of the statistics that the woes of retail have been acting as a drag on the sector as a whole.
Jones Lang LaSalle (JLL) provides information on property and investment opportunities and in its most recent analysis on new construction starts it revealed that they fell in the first quarter of 2019 for the first time since Q2 2017.
It reports that the ongoing uncertainty “dampened UK commercial real estate transactional activity in Q2, with investment volumes slowing to £8.9bn. This represented a 22% decline on the first half of and was the slowest first half of the year since 2013.
However, it reports, Alistair Meadows, Head of UK Capital Markets, believes that “Market fundamentals remain strong, with high levels of leasing, low vacancy rates and rental growth offering encouragement to investors. “
The Royal Institution of Chartered Surveyors (RICS) reports that in London demand for commercial property in London stayed in negative territory for the 12th quarter in a row and Capital Economics expects a weakness in investment activity is likely to extend into the rest of the year.
Aside from the obvious continuing uncertainty about the UK’s economic future outside the EU, the retail woes are likely to be a significant drag on commercial property. It is estimated that some 20% of retail landlords’ tenants are in significant financial difficulty, Many are insolvent and have embarked on restructuring via CVAs where insolvency is a prerequisite for doing a CVA. Furthermore there are indications that a lot of town centre retail space is no longer viable with landlords seeking planning permission for a change of use so property can be converted into residential units.
Finally, according to CBRE, the world’s largest commercial property services and investment company, most commercial property rents have been reducing in the first half of the year, declining by -0.2%, although it said the industrial sector was the best performing prime market, recording a capital value growth of 1.6% Quarter-on-Quarter, and a Year-on-Year of +6.8%.
One trend that may be significant in the future is the growing popularity of flexible tenancies and shorter leases rather than businesses owning and occupying large corporate buildings. This is already popular for renting for office space with Regus and WeWork growing rapidly but is likely to be used as a more flexible approach to renting light industrial and retail space.

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Banks, Lenders & Investors Business Development & Marketing General

Dream Big – Summer is time for considering a start-up

Summer holiday start-up dreamAs many as half of all workers seriously consider setting up their own business during the summer holiday according to research.
Emma Jones, founder of small business support network Enterprise Nation, said: “The combination of sun, sand, sea and downtime means we’re more relaxed and have time to contemplate what we want.”
Relaxing on a beach with time for reflection can make us aware of any dissatisfactions with our current status or job.  It is also an opportunity to think what else you might do if stuck in a rut and you want to “take back control” of your life.
But what is involved when starting up a new business?
The key is to identify a clear purpose and define the product/market mix for your business, essentially to be able to answer “why” questions. This may require research but you cannot start planning until you have a clear purpose. Turning dreams into reality is more than simply having a good idea!
To help you find your purpose, here is the link to a TED Talk, ‘Finding your Why’ by Simon Sinek.

Find your Why before you go any further with your start-up

The core of Sinek’s argument is that all successful businesses have a belief in the core proposition which in turn inspires others.
In essence, he says, people buy into a product or service out of self-interest, and this is why the self-belief of the business’ founder is crucial to its success. This explains why sometimes even the best capitalised business with the most innovative products can fail, because they fail to convey a fundamental belief, or enthusiasm, for what they are doing.
This is not about money or fame and the most successful companies, such as Apple succeeded because their founders not only believed in what they were doing but were able to persuade others that buying into that belief would in some way enhance their own lives.
So, when you are thinking of starting up a new business this is central to whether it will succeed or fail.

When is the right time to launch?

It does not really matter when but you shouldn’t do so until you have identified your “Why”.
Of course, in preparing to launch you should do research such as trialling the idea most likely with test marketing slightly different products/services with slightly different markets/customers before settling on your core proposition. Once you know what will sell you can develop a plan that might be used to raise finance or simply be used as a discipline for following so you don’t get hijacked by others who come along with other ideas such as where to spend money on promotion initiatives.
Another key decision is what type of business, you should trade as, whether as a self-employed sole trader, as a limited liability company or as a partnership with others. Each has advantages and disadvantages which will inform your decision.
Other factors might be the state of the economy, industry or annual cycles, availability of finance, people and other resources or opportunity.
It might be counter intuitive but during a recession can be a good time to set up a business since established businesses often take their eye of their customers when they switch their focus to one of survival. This is particularly true for larger businesses since they are also less agile and often unable to cope with a changing market.
In summary there is no right or wrong time to turn your start-up dream into reality providing you are prepared.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance Turnaround

Can fashion retail ever be made sustainable?

fashion retail garment workersIt is no secret that High Street retail has been in dire straits for some time, and clothing and fashion retail have particularly suffered.
The most recent, and perhaps most high-profile example has been the struggles of Philip Green’s Arcadia Group, comprising the clothing chains Topshop, Topman, Evans, Wallis, Miss Selfridge, Burton and Dorothy Perkins, to use CVAs as a way of restructuring.
But it is not only physical fashion retail stores that are struggling. ASOS has recently issued its second profit warning in seven months, albeit blaming IT chaos in its overseas warehouses despite overall sales being up 12% in the four months to 30th June.
Obviously, cheap prices and turning around lines quickly, have been the two main things on which fashion retail has been relying. As a consequence, clothes are often made by low-paid workers in appalling conditions, in factories located in countries like Bangladesh.
However, for some years there have been demands from consumers for such workers to be paid fairly and treated better following revelations about their working conditions.
That did not, however, mean that consumers were prepared to pay more for their clothes or necessarily to wear them for longer.
Marketing plays a big part in this kind of consumer environment by encouraging shoppers to “be ahead”, “get the newest” and stay “on trend” in order to encourage them to buy and to do so often and repeatedly.
But as I said in my blog on Tuesday, corporate survival is coming increasingly dependant on a variety of demonstrably ethical behaviours, including protecting the environment and treating employees fairly.
It may be that we have reached a critical moment where the zeitgeist among consumers is changing in a way that is focussing fashion retail on the need to change its business model by marketing its ethical and sustainable credentials.

What would sustainability mean in fashion retail? 

Clearly, a recent initiative by Boohoo.com highlighted its ‘new’ sustainable credentials by the launch of its range of “recycled” clothes.
The collection, the company says, has been manufactured entirely in the UK to cut air pollution and its garments are made from recycled polyester, with no environmentally unfriendly dyes or chemicals being used.
It is not yet clear if this is marketing puff or a shift in values as the launch has been greeted with some scepticism, according to an article on the BBC news website.
It may be a start but the EAC (Environmental Audit Committee) argues that it doesn’t address other issues with clothing, including the fact that synthetic fabrics used to make such garments shed micro-fibres when washed, polluting waterways or that even those that are disposed of through retailer take-back schemes or in charity collection bins will eventually find their way into landfill.
The Independent recently reported that fashion retailer Net-a-Porter plans to launch a new platform, Net Sustain, to highlight brands meeting certain criteria regarding sustainability. Attributes will include “Locally Made”, when at least 50% of a brand’s products have been manufactured within their own community or country, and “Craft & Community”, where products showcase exceptional, artisanal skills. The platform will launch with 26 brands and 500 products.
However, other pressures are also having an influence, not least all the publicity about plastic waste littering the world’s oceans and land, which it has been argued is not helped by the rise in online shopping where packages generally use plastic materials.
Fair pay for overseas garment workers and the use of sustainably grown fibres, such as cotton are also factors.
Another is the popularity of new initiatives such as the decluttering movement started by Marie Kondo who has been encouraging us to hoard less “stuff”, or the Tiny House movement that is encouraging us to use less space.
One company in Suffolk has been in the forefront of fair trade and environmentally sustainable clothing production for five years.
Where Does it Come From, operates in both India and in Africa and offers a complete history of its manufacture with each garment. It has to be said their range is not as cheap as perhaps the fast-turnaround online and high street fashion retail can produce but its ethical, environmental and sustainability credentials are impeccable.
And this is perhaps the main issue for fashion retail, promoting their values as evidenced by their actions rather than by their marketing. Will consumers be willing to pay more and buy less frequently to satisfy their concerns?
The Suffolk business has clearly been able to survive and has some extremely loyal customers but whether its model can work in the mass fashion retail market remains to be seen.
 

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Banks, Lenders & Investors Business Development & Marketing

Long term corporate survival can only be achieved by having the right values

corporate survival means eliminating industrial pollutionThere are signs that the Gordon Gekko culture of “greed is good” is dying and that corporate survival will depend on not only giving customers what they want but also being seen to have and act on a wide range of ethical values and behaviours.
In an environment of high employment and significant skill shortages in many sectors, the bargaining power of millennials and Generation X will only strengthen as the older generation of employees retires.
Equally, the power of consumers and customers choosing who to buy from is having a greater impact on corporates’ processes and practices.
In this context, CSR (Corporate Social Responsibility) policies will no longer be enough. Too many of them have been unmasked as marketing and PR exercises among the larger corporations and of little practical substance. SMEs often fare better, however, being closer to their localities and customer base, where their greater visibility puts them under pressure to be more accountable.
However, movements like Extinction Rebellion, highlighting the urgency of acting on environmental damage, as well as greater publicity about the treatment of whistleblowers who have unmasked the less than ethical behaviours of their employers (eg the Cambridge Analytica scandal), often at great cost to themselves, have focused attention on better ways of assessing corporate behaviour.
To address these concerns, ESG (Environmental, Social and Governance) is becoming more and more popular as way of assessing Sustainable Investment.
ESG incorporates measurements of how businesses respond to climate change, treat their workers, build trust and foster innovation and manage their supply chains. ESG is also becoming a key marker for investors decisions, according to a blog by npower, which claims that “a quarter of the world’s professionally-managed investment funds now only invest in companies that demonstrate solid ESG credentials”.
It quotes Nigel Topping, the head of the We Mean Business coalition of 889 companies with $17.6trn in market capitalisation: “If these challenges are tucked away and approached solely for compliance reasons, they are not being integrated. And if businesses aren’t incorporating them into financial decisions and long-term planning, then they are not being taken seriously – which leaves the business poorly prepared for the future.”
Businesses can adopt a process of continuous improvement on their energy efficiency, for example, by adopting the globally-recognised ISO 50001 standard, which can be verified and used to reassure customers, clients and investors.

Employee and consumer pressure means incorporating ethics for corporate survival

Investor, employee and consumer pressure is mounting for companies to incorporate the values that will help ensure corporate survival, despite some being at the expense of short term profits. This is somewhat at odds with many senior executives whose focus has been on reporting profits. The focus on profits has been understandable since they underpin most reward structures but this will need to change as ESG gains acceptance.
There are many recent examples of changes to corporate behaviour as a result of consumer pressure, most notably this year’s focus on plastic waste and environmental pollution.
Not surprisingly, the superstores and hospitality industries have been in the forefront. McDonalds has committed to completing a roll-out of bringing in paper straws in all its outlets by the end of the year.
Waitrose removed all its plastic straws from sale last year and has promised to reduce plastic whenever possible, while Iceland aims to be “plastic-free” by 2023.
Single-use plastic carrier bags are no longer to be had in virtually all the superstore chains and both Morrisons and Sainsbury are rolling out plastic-free fruit and veg areas across their stores.
But ethical behaviour is not focused solely on environmental concerns.
Just a few days ago the Chartered Institute of Credit Management (CICM) suspended another 18 businesses from the Prompt Payment Code for failing to pay 95% of all supplier invoices within 60 days. They included Screwfix, Galliford Try, and Severfield.
Employees and potential employees are also becoming more discriminating.
Research in the USA has revealed that:
* 75 percent of millennials would take a pay cut to work for a socially responsible company.
* 76 percent of millennials consider a company’s social and environmental commitments before deciding where to work.
* 64 percent of millennials won’t take a job if a potential employer doesn’t have strong corporate responsibility practices.
PriceWaterhouseCooper has also studied the millennial generation and found that “corporate social values become more important to millennials when choosing an employer once their basic needs, like adequate pay and working conditions, are met”. Their report concluded that “millennials want their work to have a purpose, to contribute something to the world and they want to be proud of their employer.”
There are moves afoot from the Government, too, to strengthen protection for those who discover unethical, or unlawful, behaviour in their workplaces and become “whistleblowers”.
Business minister Kelly Tolhurst has announced proposed new laws to ban the use of NDAs (non-disclosure agreements) that stop people disclosing information about their employer to the police, doctors or lawyers.
There remains the issue of excessive corporate executive remuneration to tackle. While there has been a significant increase in the numbers of shareholders who have questioned CEO and director level remuneration, so far, the High Pay Centre has found that every single vote at a FTSE 100 firm was approved between 2014 and 2018.
Clearly there is some way to go before the adoption of ESG by corporates becomes the norm, but the momentum is there and businesses should pay heed as their corporate survival will increasingly depend on it.

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Banks, Lenders & Investors Business Development & Marketing General Turnaround

What are the prospects for UK manufacturing?

UK manuafacturing prospectsUK manufacturing output growth held steady in the three months to May, according to the Confederation for British Industry’s (CBI) monthly industrial trends survey.
In July, the CBI reported that in the three months to June UK factory output had turned in its slowest quarterly growth since April 2016.
Furthermore, the CBI reported that ten out of sixteen sub-sectors experienced growth with chemicals, food, drink and tobacco being resilient, while car manufacturing struggled.
Confusingly the CBI also reported that order books deteriorated in the quarter.
By comparison the monthly snapshot from IHS Markit and the Chartered Institute of Procurement and Supply showed that activity levels in the UK manufacturing sector in June had dropped to the lowest level since February 2013.
IHS Markit/Cips found that high stock levels, ongoing Brexit uncertainty, a deteriorating economic backdrop and rising competition contributed to the drop in output. Weak export demand amid a faltering global economy also had an impact.
These figures, while confusing, support the hypothesis that UK manufacturing prepared itself for Brexit in March by building up stock levels and in doing so increased output. However, since then much of this productivity has been ratcheted back.
So where are we?

What is the true state of UK manufacturing?

The publisher, The Manufacturer, takes an up-beat view.
It argues that “Contrary to widespread perceptions, UK manufacturing is thriving, with the UK currently the world’s eighth largest industrial nation. If current growth trends continue, the UK will break into the top five by 2021.”
In their annual manufacturing report for 2019 they argue that there is a “surprisingly resilient mood among manufacturers with 81% saying they are ready to invest in new digital technologies to boost productivity.
But they do not deny there are challenges.
Of course, Brexit and ongoing uncertainty, is having an effect on strategic-planning and business prospects with 51% arguing that the Government should be doing more to promote exports, especially given the currently favourable exchange rates from an export perspective.
Among the challenges the 2019 survey identifies for UK manufacturing is the need for a clear strategy and strong leadership when introducing smart technology into the processes, citing lack of coherent digital strategies and in some cases an inability to understand the practical applications that technology can offer.
Another issue is the lack of skilled engineers. Some respondents argue that the education system and the Government’s approach are both failing. The survey reports that some companies are now establishing their own training schemes and academies because the situation is so bad.
However, I would argue that while the mainstream education system undoubtedly plays a big part, there is actually no reason why businesses should not be doing  so as well. After all, they are in the best position to know precisely what skills they need in a way that schools and colleges perhaps cannot.
On exporting, there were some in the survey that argued that Brexit might be a good thing in stimulating more UK manufacturing rather than being locked into and dependent on complex transnational supply chains.
One manufacturer in Cheshire is reported as saying in a Guardian article in June this year: “We are under the threat of closure all the time.”
But the article goes on to describe how this particular manufacturer is fighting back: “If we didn’t have a drive on productivity we wouldn’t be in business.”
Their solution has been to drive forward with robotic technology and with the support for their proposed changes from their workers. They have involved everyone in the process, mocking up robotic workstations in cardboard to see how they fit in with the workforce, with the result that “while robots have replaced some jobs new ones have come and staff have been trained up along the way”.
All this is without considering the opportunities for completely new businesses that will arise from the growing drive to clean up the environment and make activity more sustainable which will no doubt create opportunities among the more innovative producers for new processes and ways of doing things.
Perhaps we should not write the obituary for UK manufacturing quite yet.
 

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Banks, Lenders & Investors Business Development & Marketing Finance General

The UK Film Industry – sector focus for July

The UK film industry offers settings like this for international film makersrIt’s good to write about a UK business success story, the UK film industry, which has become an important economic sector having grown faster than much of the UK economy.
According to the DCMS (Department for Digital, Media, Culture and Sport) in November 2018 the value of the creative industries as a whole to the UK was up from £94.8 billion in 2016 and had broken through the £100 billion barrier. It said the sectors had grown at nearly twice the rate of the economy since 2010 and together are now worth £268 billion.
For the film world specifically not only does the UK have a widespread and skilled support base of experienced film production crews and technicians, it also has both the locations and the studios to attract the biggest film companies from around the world. It is an industry that employs an estimated 60,000 people.
Then there is the knock-on effect into the wider local economy, not only by boosting the tourism sector, but also in some other surprising ways. We know of one Essex-based haulier who reports consistent and increasing contracts for transporting materials, equipment and support units to film locations as well as to studios like Shepperton and Pinewood.
Last week, Netflix announced what is believed to be a 10-year deal to lease Shepperton Film Studios near London, where it plans to create a dedicated UK production hub, including 14 sound stages, plus workshops and office space at the site owned by the Pinewood Group.
Another recent example is the newly-released Danny Boyle/Richard Curtis film ‘Yesterday’, filmed almost entirely in Suffolk, Norfolk and Essex.
These are only the latest results of an ongoing investment in the UK film industry, which has been stimulated by Government tax breaks and local authority initiatives that have encouraged spending by international filmmakers.
According to figures from the BFI (British Film Institute) 2017 saw the highest level of spend by international filmmakers ever recorded, reaching £1.692 billion.
But the success of the UK film industry has not only been about attracting international film makers. Production of home grown films in 2017 had also risen, with 72 films going into production including ‘Mary Queen of Scots’ directed by Josie Rourke; ‘Yardie’ directed by Idris Elba, ‘Peterloo’ directed by Mike Leigh; ‘Close’ directed by Vicky Jewson; and ‘The Boy Who Harnessed the Wind’ directed by Chiwetel Ejiofor.
UK cinema revenues have also grown, reaching £1.3 billion (totaling 170.6 million admissions) that same year.
According to the ONS (Office for National Statistics) the gross value added to the economy by film, video and television companies has increased by 313 percent since 2008.

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Banks, Lenders & Investors Business Development & Marketing Finance General Turnaround

June macroeconomic snapshot of UK regional economic inequality

UK regional economic inequality snapshotWe hear a lot about UK regional economic inequality, so as part of our series of macroeconomic snapshots we’re taking a look at some of the data.
These are just a few examples of recent announcements of businesses facing closure or insolvency in the immediate or near term: British Steel, Scunthorpe (c.3,000 jobs), Honda UK, Swindon (3,500 jobs), Kerry Foods in Burton-upon-Trent (900 jobs). What they all have in common is that they are situated in the regions outside London.
Then, of course, there is the ongoing carnage in the High Street retail sector which according to the British Retail Consortium’s calculations has cost 75,000 jobs since the first quarter of 2018.
The long decline in UK manufacturing, initiated in the 1980s Thatcher era, has hit the regions of the north and Midlands, and S. Wales, particularly hard.
In January this year NIESR (National Institute for Economic and Social Research) calculated that since the mid-1990s regions that now have reduced shares of the national economic pie are the North West (-1.8%), West Midlands (-1.4%), Yorkshire and the Humberside (-0.8%), and the North (-0.4%).
The ONS (Office for National Statistics) list of the top 10 most deprived UK towns and cities are Oldham, West Bromwich, Liverpool, Walsall, Birmingham, Nottingham, Middlesbrough, Salford, Birkenhead and Rochdale. In their most recent report, they took into consideration metrics like low incomes, levels of employment, health, education and crime.
By contrast, real output rose twice as fast in London as in other regions over the 10 years to 2017. The “the Golden Triangle of London, Cambridge and Oxford that attracts over half of all research funding – more than £17bn” while just £0.6bn goes to the north east, according to Newcastle on Tyne MP (Lab) Chi Onwurah.
Also, according to the 2019 Global Cities report released today by consultancy firm A.T. Kearney, London has been ranked as the top city in the world for future business investment.
Of course, none of this disparity is a revelation. The 2010-15 Conservative/Liberal Democrat coalition prioritised cutting public spending in the short term over all other objectives, including regional equality and long-term social cohesion. One of their first acts was to abolish the regional development agencies. But in 2014 the then chancellor, George Osborne coined the phrase Northern Powerhouse, a recognition, and arguably a u-turn, that action was needed on UK regional economic disparity.
There is some evidence that the north’s economy has strong foundations, with productivity growing at a faster rate than in London between 2014 and 2017 and jobs being created at a greater rate than the UK average.
According to new report from TheCityUK, the trade body says the number of people employed in the financial services sector in Wales has jumped by over 20%, about 11,000 people. There has also been a 10,000 rise in the West Midlands, 12,000 in the East of England, and 24,000 in Yorkshire and Humber. Conversely, the number of financial workers in London has dropped by 10,000 since 2016, and by 32,000 across the South East of England.
However, with a £3.6bn cut in public spending in the north of England since 2009/10 and 37,000 fewer public sector workers, there is also evidence, reinforced by IPPR figures in May, that the Northern Powerhouse has been “undermined” by austerity, with power and resources “hoarded in Westminster.”
There is clearly a long way to go before the UK’s regional economic disparities are anywhere near to being reduced.
 

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Business Development & Marketing Finance General

SME owners need to pay more attention to their own mental and physical health

mental and physical health benefits of natureThere is plenty of evidence that owning and running a SME leaves little spare time to pay attention to their mental and physical health.
Research by Opus Energy earlier this year revealed that SME owners in the UK work an average of 2,366 hours per year in order to make their business a success, working an average of 45.5 hours per week (compared to the average full time working week of 37 hours). More than half (56%) of owners reported working either six or seven days per week.
It also found that 14% percent of all entrepreneurs say that they don’t take any time off while a quarter (23%) claim that they have to work even when on holiday.
A survey by Yorkshire Bank in April found that a quarter of small business owners across the UK sacrifice time with friends and family and around 30% of UK business owners have sacrificed their work-life balance. This results in detrimental effects on their mental and physical health.
In May the FSB announced a partnership with Heads Together, a project run by the Royal Foundation, to raise awareness about mental health in SMEs.

Ignoring your mental and physical health can take a toll on your business

In an economy that relies heavily on the thousands of SMEs, this situation has some worrying implications.
Given the significant rise in the numbers of SME owners reporting burn out, what will happen to the continuity, efficiency and potential growth of their businesses?
Is it a case of business owners not organising their time efficiently, or taking on too much, or unable to delegate, or simply not saying “no”?
There is no doubt that the regulatory and administrative burden on SMEs is considerable – from Business Rates, employee and pensions administration, Health and Safety regulations, tax and legislative changes, such as Making Tax Digital and increasing demands from corporate customers, suppliers, landlords and banks to complete compliance documents.
In addition, there has been a level of stress and anxiety relating to uncertainty following the financial crisis of 2007, the lack of any subsequent growth and more recently the downturn in the global economy. As well as other elephants in the room.
However, there are some things business owners could do to allow them to take better care of their mental and physical health.
The first may be to simply to stand back from their business and take stock. With the help of a mentor they can objectively assess how they use their time and suggest improvements.
As a consequence of this it may be that the business owner needs to be more self-disciplined and focused on working on their business rather than in it. Having a daily work plan, with space in the diary for reflection, cutting back on meetings, actually building in thinking and leisure/exercise time. Such discipline and sticking to a plan can be helpful.
Outsourcing or delegating functions is another option. Many SME owners find it difficult to trust others to do some tasks, but actually, if they want to grow their businesses, they need to ensure they have a team of key people capable of taking over some of the workload.
The mental and physical health benefits of simple things like a walk cannot be over-emphasised. Finding a way to de-stress, to let the mind roam and reflect on problems often leads to new ideas and solutions that were not initially considered.
Lastly, spending time with friends and especially family should not be at the bottom of the priority list. After all, a large number of SME owners say that they originally started their businesses in order to have more freedom to manage their work-life balance. Sadly, too many of them are finding that the decision has had the opposite effect.

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Business Development & Marketing Finance General

Why are businesses not taking advantage of the new apprenticeship scheme?

The Government’s new Apprenticeship Levy scheme introduced two years ago set an ambitious target of creating 3 million new apprenticeships by 2020.
Under the scheme any business with annual payrolls exceeding £3million have had to pay a 0.5 per cent levy on their payroll to the Government which can be redeemed against the cost of staff employed under an approved apprenticeship programme.
But there is now very little confidence that the 3 million number will be achieved. Indeed, the numbers of new apprenticeships have been reducing and in January this year was revealed to be 15% lower than before the system was introduced two years ago.
In May the Public Accounts Committee said that the DfE’s “poor execution” has created “serious longer-term problems” for apprenticeship programmes.
Yet UK businesses have been for some time facing serious problems in finding appropriately skilled candidates for jobs, particularly in engineering, construction and IT. And the OECD has warned that automation will affect more than a million workers, who will need re-training as a result.
The new apprenticeship levy has been variously described as “yet another tax on business”, with an online system for claiming training vouchers that is too complicated to use and with the maximum amount that can be claimed set far too low.
For example, in the engineering and manufacturing sector, the levy caps the possible funding for any single apprentice at £27,000, but some firms say they can spend up to £100,000 for some apprenticeships. To make matters worse, those firms paying the levy must claim their vouchers within two years or lose the money paid under the levy altogether.
Even worse is that some of the standard training programmes are not yet ready, according to the website redflagalert in an article in October last year: “In high-cost sectors such as engineering, construction and manufacturing, the immediate cost needed to set up the new training deters many.”
According to the Financial Times, reporting in January this year: “A survey of 765 levy paying businesses in November by the training body City & Guilds found that 93 per cent had hit some form of barrier preventing them from investing in apprenticeships since the levy was introduced.”
If the larger levy-paying businesses are struggling to implement apprenticeship schemes, then imagine how much of a burden it is for the UK’s many SMEs. Although the Chancellor of the Exchequer this year halved the amount small firms must spend on apprenticeships to 5% the burden of dealing with the online voucher claiming system and finding a suitable training scheme is likely to be far more onerous for already-busy owners and managers than it is for the larger businesses.
Yet another example of a well meant Government policy badly executed without really understanding the way business operates and what it really needs?

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Business Development & Marketing Finance General

Is an Employee Ownership Trust the way forward to show your workers they are valued?

In May this year Julian Richer gave his employees shares in the company through an Employee Ownership Trust (EOT) whereby they will own 60% of the business.
Announcing the decision, Richer said that he felt it was better to do it now he had reached the age of 60, than to wait until his death, as originally intended. This way, he said, he could ensure the transition would go smoothly.
Richer Sounds, the hi-fi and TV retail chain, since it was set up in 1978 has survived the last five recessions and is regarded as one of the best companies to work for.
Julian Richer’s success as founder and owner can very much be attributed to his commitment to his employees which includes initiatives such as an extra day of holiday on their birthday, heavily discounted access to holiday homes for all employees with over six month’s service, a month’s use of the company Bentley to the store that has scored highest on customer service each month and chiropody treatment and massages for his 500 employees. He even has a bring-your-pet-to-work scheme and donates 15% of company profits to various charities.
Giving employees a stake in their company via shares is not a new idea.  It began in the 1920s when John Lewis created a trust settlement for his father’s department store which was then expanded in the 1950s to full 100% employee ownership.
EOTs were formally established in the Finance Act 2014 and alongside them the Act allowed a Capital Gains Tax exemption when an owner sells at least half of the business to an EOT.

Why is valuing employees good business sense?

There are, sadly, innumerable examples of businesses that don’t treat their employees fairly, despite efforts to coax, or legislate them into doing so.
Examples include the continued, and reportedly widening disparity between the remuneration of male and female workers doing the same job, despite recent regulations requiring employers of more than 250 staff to publish their gender pay gap data.
The treatment of “gig economy” or zero hours workers has been sufficiently callous that it has prompted the European Parliament this year to pass legislation to set minimum rights that include more predictable hours and compensation for cancelled work, and an end to “abusive practices” around casual contracts. Similarly, the Parliament passed a law to give whistleblowers greater protection.
The accepted wisdom, still, among businesses wanting to improve their productivity is to expect their employees to work longer and harder. Moreover when a company is in financial difficulties their jobs are often threatened such that employees often agree pay cuts to save their jobs and in doing so save the company. Despite such sacrifice all too often employees do not share in the spoils of success when their employer returns to profitability.
Yet there is evidence that productivity gains are more likely with a short working week than with 12-hour days six days a week. In a research paper in which Will Stronge, co-founder of the thinktank Autonomy, comments that the culture of long hours fostered by US and Chinese firms “part of the ideology, and the dominant narrative that entrepreneurialism and long working hours come hand in hand […] Actually, it’s not the case. It doesn’t make business sense to work workers to the bone.” In fact, overworking employees “is the main reason for sickness in the UK and responsible for a quarter of sick days”.
At a time of skills shortages and record high employment, it therefore makes better sense for a business to retain staff by demonstrating that they are valued and by rewarding them such as giving them a stake in the business, via an EOT, or other forms of recognition.

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Business Development & Marketing Cash Flow & Forecasting General Insolvency

June sector focus on the restaurant trade and changing eating habits

The restaurant trade is notoriously volatile at the best of times but the last two years have seen it undergoing a particularly torrid time.
Even by the standards of the recent decline in High Street retail the restaurant trade stands out.
By December 2018, according to a BBC report, “Gourmet Burger Kitchen [has] earmarked 17 sites for closure while Carluccios is shutting 34 outlets. Prezzo said it would close 94 – about a third of the chain – including all 33 outlets of its Tex-Mex brand Chimichanga.” Add to these burger brand Byron, and the French cuisine chain Cafe Rouge.
In all, according to the trade publication The Caterer, 1,123 restaurant businesses filed for insolvency in the first three-quarters of 2018 and the most recent Market Growth Monitor from CGA and Alix Partners reveals that the number of restaurants in the UK decreased by 2.8% in the year to March 2019.
The problem is highlighted by the experience of Jamie Oliver who in August 2018 closed 12 of his 37 Jamie’s Italian restaurants and made about 600 staff redundant in an attempt to save the rest of his business. It didn’t work as in May this year he announced the immediate closure of his restaurant group, including Barbecoa and Fifteen, with the loss of 1,000 jobs, leaving him with just three surviving restaurants.
The bulk of the insolvencies and closures has been among restaurant chains, of which arguably, there has been an oversupply.
Having said that, some chains are still surviving and expanding, notably Indian food chains Dishoom and Mowgli.
What is driving the contraction of the restaurant trade?
Of course, and inevitably, the backdrop to some of this is at least in part the still-unresolved issue of Brexit and when, if ever, the UK will finally leave the EU. This is arguably the undercurrent driving a significant drop in consumer spending and confidence in future job security despite current record employment levels.
Then there is the impact of high business rates, the minimum wage and rising ingredient costs and increasingly a shortage of staff, many of them from overseas and notoriously badly-paid, as more and more EU citizens return home either because conditions in their home countries have improved or out of a perception of the hostility towards them in the UK.
However, there is also arguably a shift in eating habits taking place.
It is partly a case of a desire for quality over quantity or a unique dining experience that has contributed to the survival of small, independent local artisanal restaurants, although if you speak to their owners, rent and business rates are a major issue.
It is also about an increased desire for more healthy, often locally-sourced food, the rise of vegan diets, and above all, it is about time and convenience. Increasingly, people are opting to eat in, either with their families or with friends and to order food online. With Deliveroo, Just Eat and Uber catering to this demand the traditional “dine out” restaurant trade faces an uphill struggle unless it can offer something unique as the small independent offering well-cooked, authentic, regional specialities can.

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Business Development & Marketing General

Evidence mounting that SMEs are more attractive to millennials

There has been a growing body of evidence and research over the last couple of years that millennials prefer working for and shopping with SMEs.
Too often we hear about the difficulties and obstacles SMEs face, such as excessive red tape and disproportionate taxation, but it should be remembered that they account for more than 99% of all businesses in the UK, and recently, Secretary of State for International Trade Liam Fox called UK SMEs “the future of the UK economy”.
As such, it would be foolish for millennials starting out on their careers to ignore the potential opportunities SMEs could offer, and indeed, according to research carried out by Sodexo, it seems that 47% of this young cohort see them as the ideal business size to work for compared to 19% who put their faith in larger companies.
Among the benefits they saw in working for SMEs millennials in the survey they cited flexible working hours, the ability to work remotely, career progression and a friendlier company culture.
Research for the software firm WebOnBoarding suggests that new staff settle in more quickly at smaller businesses and newcomers found people friendlier than in larger companies.

Other benefits to millennials from working in SMEs

In a small business there is more opportunity for both hands-on experience as well as a wider variety of tasks.
As a SME grows, the opportunities for advancement are likely to be greater than they would be in a larger business with a more formal structure and the small business also needs to be agile to survive and flourish, which arguably allows from for more innovative thinking and contributions from all members of the workforce.
This gives younger employees the opportunity to develop their skill set much more quickly than they could in a larger organisation and also tends to give them more responsibility.
While the SME may not be able to afford to pay the large bonuses paid by some larger companies, they can be creative in the ways they reward employees, such as by offering a day off for a sporting activity, a luxury spa treatment or an early end to the working day on Fridays during the summer.

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Business Development & Marketing Cash Flow & Forecasting Finance

VOIP a phone solution for growing SMEs

VOIP replaces the old-fashioned switchboard

As a SME develops and grows costs can quickly escalate, no more so than its phone and communication systems and yet there is a cost-effective solution called VOIP that some may not be aware of.

VOIP stands for Voice over Internet Protocol and is essentially a broadband-based phone service that can include a free switch board.

A business can make calls using laptops or PCs but equally using VOIP telephones, which cost very little and are the only additional piece of hardware needed if bought upfront since the exchange is either embedded in the phone or provided by the VOIP supplier who is normally also the broadband service provider.

A VOIP system allows the business to dispense with call handling and an in-house switching system, all of which can be set up and automated by someone familiar with IT systems. You can have unique phone numbers and set it up so that calls can be switched from one number to another.

With a phone-based service, you use VOIP the same way you use a regular landline: by picking up the phone to answer it or dialling a number to place a call.

Calls are not confined to only others who are using a VOIP system and usually there is no additional or at most a minimal cost for calling overseas. The system can also be used to make conference calls and it allows you to take your number with you when you travel.

It has been estimated that savings using VOIP can be as high as 95% per month but if you are considering this option, there are some things to remember.

Getting your VOIP system right

Basic requirements are a high-speed internet connection and VOIP phones which are inexpensive. You should also remember that in the event of a power cut your phone set-up will not work and it is therefore wise to have a secondary power source, such as a generator, as a standby.

For businesses with multiple users, a separate PBX (Private Branch Exchange) is not required as the phones can be set up to manage calls within a network and can also be set up to transfer calls between phones like in a normal office exchange as well as routing incoming and outgoing calls. Most Internet Providers offer hosted/virtual PBXs, so that your SME does not have to go to the expense of buying and installing expensive equipment.

There is one caveat if considering using VOIP for your business, and this is that you will likely come across many phone company providers, such as BT, as well as specialist providers, who will offer to install and manage your set-up and hire you the phones.

You should remember that the uplift charged by VOIP phone companies is their gross profit plus phone hire if they supply the hardware and for the small, but growing SME this means a significant, and unnecessary, expense.

This website is a very useful introduction to all things VOIP.

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Banks, Lenders & Investors Business Development & Marketing Finance General

Business opportunities for SMEs in the growing demand for sustainability and cutting waste

cutting waste is essential to preserve a beautiful environmentThe neoliberal economic model based on perpetual growth has come under increasing attack from environmental campaigners particularly since the week-long Extinction Rebellion activity in April this year.
With almost-daily horror stories about climate change, global warming and the amount of plastic waste littering the planet, not to mention a significant decrease in biodiversity, it is clear that action needs to happen a lot more urgently than has previously been admitted.
Changing the developed world’s economic model from perpetual to sustainable growth is no doubt going to be a major challenge, particularly in the face of a rise in populist political parties putting national self-interest first and also of some leaders, such as US President Donald Trump who despite the evidence still questions the truth of climate change.
Nobel prize-winning economist Joseph Stiglitz makes a distinction between good capitalism, which he calls “wealth creation”, and bad capitalism, which he called “wealth grabbing” (extracting rent).
Some of this thinking may be behind the recent announcement by the UK’s largest money manager, Legal & General Investment Management that warned about “climate catastrophe” and has promised to get tougher on boards where it identifies a high level of executive pay, lack of diversity in senior corporate roles, as well as “insufficient stewardship” of the way the business is acting.
The company voted against the re-election of nearly 4,000 directors in 2018 – an increase of 37%. – and it has published a blacklist of eight companies whose shares they decided to dump.
In October last year, ten companies announced that they were cutting waste by ditching plastic. They included McDonalds, Starbucks, Aldi, Lidl, Pizza Express and Costa. Supermarkets have also been at the forefront of a drive to eliminating throwaway plastic shopping bags, with Morrisons offering both re-usable and paper alternatives and encouraging shoppers to bring their own containers when buying vegetables.
There is already some evidence that becoming a “greener and leaner” company can actually benefit a business’ bottom line.
SMEs have been encouraged to cut their CO2 emissions and offered financial incentives for changing to more environmentally-friendly processes, such as better building insulation and reducing paper use and have seen their overheads reduce as a result. Use of automation and AI has also benefited some.

Are there positive business opportunities for SMEs as a result of cutting waste?

There has been an increase in the number of small businesses, mostly located in High Street shops, specialising in the repair of household products that would once have been discarded and in teaching people how to do the repairs themselves.
Other small businesses have developed classes teaching people how to make or re-purpose their own clothes and are reportedly thriving.
Here are examples of two other SMEs that have developed, and are thriving based on their social, sustainable and environmental awareness.
In Ipswich, a clothes company originally set up in partnership with Indian producers out of a concern for Fair Trade, has recently formed another partnership with African producers to source sustainably-grown cotton which local garment workers then use to make attractive clothes that are imported to UK to be sold online. One of the selling points of the garments produced is that each item comes with a verifiable history of its production.
Another business operating nationwide and based in Essex has created a service for building contractors with contracts to re-purpose or refit existing buildings. It offers site preparation that includes initial site layout, demolition, removal of internal and external fixtures and fittings, and the removal of all waste sorted into recyclable materials that are verified by an independent adjudicator and certified so that both this company and the contractor have evidence of their efforts to be as sustainable and environmentally friendly as possible. It also clears sites at the end of the contract.
With some innovative thinking, there are huge opportunities for SMEs to create completely new, social, sustainable and environmentally friendly products and services.
If you have any examples do please let us know in the comments.

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Business Development & Marketing Cash Flow & Forecasting Finance Turnaround

Price and environmental pressures in the cargo shipping sector – stormy waters ahead?

cargo shipping on stormy seaIn early April a national newspaper published a report on the captain and crew of a cargo ship who had been stranded in the Persian Gulf off the UAE for 18 months without pay or food.
The cargo ship, said the report: “became a floating prison from which he and his 10-man crew could not escape without losing their claim to thousands of dollars in unpaid wages.” The ship’s owners had got into financial difficulties but would not sell the ship because they “would not get a good price”.
This is becoming an all too frequent story and in 2018 alone according to the IMO (International Maritime Organisation) an estimated 791 sailors on 44 ships had been abandoned in this way as a slump in orders led to overcapacity in cargo shipping and took its toll on owners.
Over the last couple of years, a global economic downturn has been gathering pace exacerbated by Trade Wars between the USA and China leading to lower demand on trade routes between Asia, the USA and Europe.
Demand has also been affected by rising costs including for fuel, port handling, insurance and security. These have increased significantly over the past few years, not least due to piracy off Somalia and the recent threat by Iran to block the Straits of Hormuz.

Will 2019 bring any relief for cargo shipping?

Growth in the first 11 months of 2018, was the slowest recorded in the past decade for intra-Asia at 3.8% and the predictions are that European containerised imports may be stuck at a demand growth of no more than 2% for the foreseeable future.
Rates have been relatively steady for a couple of years but, it has been argued, they are barely recovered from a loss-making, low-rate 2016. For some charter cargo shipping companies rates are expected to remain loss making, leading to numbers of idle ships.
While there is some potential for demand from South America and Africa to grow, the outlook is very uncertain.
An added complication is that the IMO has introduced a mandatory cap on the amount of sulphur in ship fuel starting form 2020. Lower sulphur fuels are expected to be more costly than the current Heavy Sulphur Fuel Oil (HSFO).
The increased emphasis on climate change and environmental protection will play an increasingly important role in the cargo shipping sector as it will in other sectors and it will not escape from the geopolitical pressures of trade wars, rising populism and uncertainty over regulation due to these, Brexit and other issues.
It will be some time before there is any relief for the cargo shipping sector.

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Banks, Lenders & Investors Business Development & Marketing Finance

Why the current model of free market capitalism is failing SMEs

synbol of capitalism for the richIn the late 1970s the then UK Prime Minister Margaret Thatcher and US President Ronald Reagan both espoused the idea of minimal state regulation and of allowing free market capitalism to reign relatively unchecked in line with the theories of the Nobel prize-winning US economist Milton Friedman and The Chicago School, as it was called.
The assumption was that the weakest businesses should be allowed to fail and only the strongest would survive, which would benefit businesses, consumers and result in strong economies. It also assumed that the private sector would provide everything from energy to transport infrastructure to education at a lower cost than if they were state-funded.
Since then we have seen the 2008 global financial crisis, the introduction of a programme of austerity in the UK, central banks reducing and keeping interest rates artificially low, productivity in decline and a widening of the income inequality gap with increasing wealth concentrated in the hands of approximately 1% of the population while wages have barely risen for the majority.
In March the former governor of the Indian Central Bank warned, in an interview on the Radio 4 Today programme, that capitalism is “under serious threat” as it has stopped providing for the masses.
“It’s not providing equal opportunity and in fact the people who are falling off are in a much worse situation,” he said.
It should be no surprise, therefore, that so-called populist and nationalist movements, largely seen as extreme right or extreme left, have been on the rise across Europe as much reported in Italy, France, Germany and UK and also in the “Make America Great Again” USA.
Indeed, as the columnist Bagehot had reported in the Economist the previous June, that something is wrong with the current model has begun to be recognised in Conservative circles, notably by Michael Gove, who, he said, was lamenting: “the failure of our current model of capitalism to deliver the progress we all aspire to”.
The implication is that there is both “good” and “bad” capitalism and that the current situation is far from good.

What are the implications of “bad capitalism” for SMEs?

Top investor, influencer and author of Principles, Ray Dalio, Co-Chief Investment Officer & Co-Chairman of Bridgewater Associates, L.P. in New York, has produced a detailed analysis of the effects of what has gone wrong and how capitalism should be reformed.
He says: “Over these many years I have .. seen capitalism evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots.”
Dalio also argues that while necessary in 2008 the results of the Central banks’ actions have been to drive up the prices of financial assets focusing investors on financial returns in the short term at the expense of investing for the longer term.
While his focus is on the USA, much of his argument applies to the UK also, in the outcomes being a rise in rent-seeking investment, which puts nothing back into businesses, the economy and society, a race for higher and higher CEO pay, short-termism and a marked lack of highly-educated and skilled young people coming into the workforce.
All of these make it increasingly difficult for SMEs to thrive and grow.
What is needed, he says, is a re-engineering of the capitalist system, to better and more fairly divide the economic pie and to have a system of accountability that makes clear whether individuals are net contributors or net detractors to society. It also needs income redistribution by taxing the richest and using the money to invest in the middle and the bottom primarily in ways that also improve the economy’s overall level of productivity.

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Accounting & Bookkeeping Business Development & Marketing Cash Flow & Forecasting Finance

UK economy macroeconomic update at the end of March 2019

UK economy crystal ball gazingAmidst the tedious ongoing, protracted and now further extended Brexit process, predicting where next for the UK economy is akin to crystal ball gazing.
So, a macroeconomic update on the UK economy can only be a short term snapshot, from which it may be possible to tease some potential signs for the future although the impact on UK of some global trends make some predictions more certain.

The state of the UK economy after the first quarter of 2019

As ever, we have seen a mixture of positive and negative economic data but it should also be remembered that Brexit is a distraction since the UK economy is heavily dependent on the EU and global economies which have been slowing markedly.
In defiance of most economists, unemployment continues to decline and is at its lowest level for 45 years, and employees are finally seeing modest, albeit recent, above inflation wages growth after many years of minimal wage increases. This has no doubt contributed to the higher levels of income tax and helped narrow the gap between government spending and revenue. Consumer spending has also held up rather better than predicted to help the UK economy.
While the FTSE 100 dropped to 6,584 in December it has since recovered to 7,490 but not yet to its historical peak of 7,877 in May last year. Much of the recovery would appear to be a reversal in economic forecasts for interest rates, which were expected to rise in US and UK but now are projected to remain the same for some time and even may be reduced as some are predicting. As a benchmark the yields on UK 10-year Gilts (bonds) are currently 1.23% up from 0.52% in July 2016, and US 10-year Treasury bonds are 2.58% which is down from their 5-year high of 3.23% in November last year.
The rate of house price growth has been at its lowest for almost eight years and the UK economy expanded by just 0.2% in the latest three months with the Treasury, the Bank of England and the City predicting the weakest growth for eight years for 2019.
Export orders, too, have gone down, with UK export growth falling by 0.8 points to 95.6 in the first three months of the year.

Worrying signs ahead for the UK economy

The UK’s service sector accounts for 80% of its economy and the most recent purchasing managers’ index for February from IHS Markit/CIPS fell to 48.9 in March from 51.3 in February, where any figure below 50 shows a contraction in the sector. Construction, too, remained below 50.
IHS Markit/CIPS is predicting that the UK economy will grow by just 0.8% this year. PwC has also downgraded its GDP growth forecast for this year to 1.1% from 1.6%.
At the end of March, there was some evidence from the REC (Recruitment and Employment Confederation) that employers were scaling back hiring and investment plans.
More concerning is the flight of capital out of the UK with Santander moving spare capital away from its British operations and EY (Ernst & Young) analysis suggesting that banks, asset managers and insurers are opening or expanding their European centres, with 23 companies announcing the transfer of £1trn in assets.
Despite what some might regard as a gloomy outlook, it would appear that prospects for the UK economy are better than those for Europe and possibly than for US.
It will be interesting to see what happens over the next quarter now that extra time has been agreed to sort out the Brexit situation.
Normal business life cannot remain on hold forever, but whatever the outlook we should get on with doing business and not wallow is apathy or self-pity.

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Banks, Lenders & Investors Business Development & Marketing Finance General

Failing to recognise the equal value of women to the economy is short-sighted

equal value of women CEOsIt is dispiriting in the 21st Century that investors and businesses are still not recognising the equal value of women and their contribution to achieving success.
Two recent reports have – yet again – highlighted this discrepancy.
Not only did many businesses fail to meet the Government’s recent deadline for reporting on their gender pay gap but, according to BBC research, fewer than half of the UK’s biggest employers have succeeded in narrowing their gender pay gap. In fact, in 45% of firms the discrepancy had increased.
The Fawcett Society, which campaigns for gender equality, described the figures as “disappointing, but not surprising”.
More alarmingly, various reports have revealed that women entrepreneurs face an uphill struggle in getting investment finance.
Government analysis has found that less than 1% of venture capital investment in the UK goes to female-led start-ups. Its research was carried out by the British Business Bank, Diversity VC and the British Private Equity and Venture Capital Association.
Recently, the Daily Telegraph reported an example where a women posed as a man in order to apply for funding from investors:
After receiving patronising responses to her requests for financial backing for her technology consultancy business from male investors, entrepreneur Brittney Bean, the Telegraph reports: “She wrote to investors under the persona of “Nigel” – her male head of finance. “I’d reply as a man, saying, ‘I’m now taking this company’s finances over, is it possible that we can extend the credit line?’ And the reply was like, ‘It’s great to start working with you. Of course, we can help with that,”.

SMEs and investors miss out by Ignoring the equal value of women to the economy

Of course, if the culture is to change then schools, colleges, apprenticeship schemes and employers all need to play their part.
Research by a team under Robert M. Sauer, chair of economics at Royal Holloway University, has found that having a bank loan increases average business value by €96,500 for men and €174,545 for women.
While Samantha Smith, chief executive of FinnCap Group, suggests that improving female entrepreneurs’ access to venture capital funds could help boost UK GDP.
Yet the bias towards investing in male-dominated ventures persists. Where is the evidence that men, rather than women are likely to develop the “next big thing”?
And when there are skills shortages in many sectors, why narrow the recruitment pool to such an extent? Surely the most crucial thing for a business is to find the best available talent regardless of gender – or ethnicity.
It is time these chauvinistic attitudes were consigned to history, where they belong.
 

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Banks, Lenders & Investors Business Development & Marketing Finance HR, Redundancy & Trade Unions

What kinds of jobs will be taken over by automation?

automation of unskilled jobsIn late March, the ONS (Office for National Statistics) published its latest findings on the effects of automation on the jobs market.
It found that some 1.5 million jobs were at high risk from automation, but, tellingly, 70% of these roles were currently held by women. The next most at risk groups were part timers and young people.
The ONS calculates that around 710,000 jobs in the City may be taken over by automated technology, with around 39% of jobs in the accounting, legal and financial services sectors most likely to be automated and that 34% of roles in tax advice could be affected..
Waiters and waitresses, shelf fillers and elementary sales occupations, are most likely to go, all roles defined as low-skilled or routine. Increasing numbers of factory workers are also at risk of being replaced by machines.
Least endangered are medical practitioners, higher education teaching professionals, and senior professionals in education although many of their support functions such as data capture and preliminary assessments are already being done by computers.
Deeper analysis suggests that automation has already dispensed with some lower-skilled work because although the overall number of available jobs has increased, according to the ONS, these are in low or medium risk occupations.
According to Maja Korica, associate professor of organisation at Warwick Business School, 20% of the Amazon workforce, for example, may already be made up of robots.

Are the economy, employers and businesses prepared for the risk from automation?

While it seems that manufacturing is already moving ahead with automation, the question is whether there will be enough higher-skilled people available for the future.
The take-up of apprenticeships by business has repeatedly failed to hit targets set by the Government.
While the future for the economy is still so uncertain, many employers will continue to delay investment in the long term productivity benefits that automation offers.
In the short term, therefore, there continues to be a need for lower-skilled workers with demographic groups being overlooked by employers, according to Pawel Adrjan, a former Goldman Sachs economist who now works at the jobs group, Indeed.
He argues that employers will need to search across underemployed demographic groups (young people, single parents, ethnic minorities, people with disabilities) at least in the short term as more and more EU workers either leave the UK or decide not to come and work here.
Clearly, the economy and various sectors are still in a state of transition, so it may be that relatively low-skilled work will be around for a while yet. But when automation ramps up there will be a need for more skilled workers as operators. Despite the loss of some jobs, automation offers scope for everyone involved to benefit.

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Business Development & Marketing Finance General

April 2019 sector focus on the UK road haulage industry

road haulage industry Indian styleAs negotiations for the UK to leave the EU hopefully draw nearer to some kind of resolution it seems an opportune moment to focus our monthly sector blog on the UK road haulage industry.
First, some facts, published by the RHA (Road Haulage Association).
The sector is the UK’s fifth largest employer, employing 2.54 million people in haulage and logistics, with road haulage being one of several UK sectors facing a skills shortage.
It is an industry worth £124bn GVA to UK economy, with 600,000 Goods Vehicle driving licence holders and 493,600 commercial vehicles over 3.5 tonnes registered in the UK.
89% of all goods transported by land in Great Britain are moved directly by road (the balance not moved by road often needing road haulage to complete journeys to/from ports, airports or rail terminals). This includes 98% of all food and agricultural products, and 98% of all consumer products and machinery transported by road freight.
However, it is a tightly-regulated industry with very narrow margins and many of its customers depend on prompt delivery of consignments based on just-in-time supply chains for both food and manufacturing.

The road haulage industry will face massive changes after Brexit

The key questions facing the industry are what additional paperwork will be needed for drivers, vehicles and goods in transit, whether they are simply picking up containers from ports or needing to travel across borders. What border controls will there be and what regulatory requirements?
For example, currently AEO (also referred to as “trusted trader”) status permits a haulier whose credentials have been officially checked and verified to transport goods across frontiers without physical customs checks of consignments, where they are trusted to simply provide the documentation. What will happen to these after Brexit?
So far, the RHA has provided at least seven checklist updates for UK drivers and haulage companies in just a few months, but the situation is still fluid and the only thing it has been able to say with any certainty is that “ECMT permits will be the only certain access to and from the EU for UK operators after Brexit. These are quota limited permits issued under an old system never designed to deal with the sort of volume of haulage movements that exist between the UK and the EU. For UK operators only about 10% of the market demand can be met by ECMT permits.” Wow, only 10%!
Trailers weighing more than 750Kg will have to be registered for international commercial use, drivers will need an international green card from their insurers and they will also need an international driving permit (IDP).
Then there is the question of what will happen to those qualified non-UK HGV drivers working in the UK and employed by UK hauliers to fill the current skills gap.
The capacity of the ports and their ability to cope if they need to introduce customs and paperwork inspections is also under question. The UK has major import terminals at Dover, Southampton, Felixstowe, Tilbury and Hull, to name the main ones servicing trade with Europe, for which at the moment there is very little information from Government as to what additional facilities they will need to allow for.
Who can forget the fiasco of transport minister Christ Grayling’s failed effort to open up Ramsgate to provide more capacity, not to mention the now-cancelled £13.8m contract to the Seaborne Freight to run a service to Ostend, in Belgium, to alleviate any delays at Dover in case of a no-deal Brexit despite the company having never run a ferry service and having no suitable ships?
It is all very well for the Government to exhort businesses to be prepared for all Brexit eventualities, including a no-deal scenario, but, as the RHA chief executive Richard Burnett warned in early March, “The whole situation has turned into a farce …and, through no fault of its own the industry on which the economies on both sides of the Channel rely so heavily is being set up for a fall of catastrophic proportions.”

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Business Development & Marketing General

GDPR one year on – how well is it working?

GDPR and data securityIt is almost a year since the new EU-wide GDPR (General Data Protection Regulations) legislation was introduced and so far approaching 60,000 breaches by companies have been reported across Europe.
The UK, the Netherlands and Germany have reported the most, ranging from minor errors such as missent emails to major cyber hacks.
In the UK the ICO (Information Commissioner’s Office) oversees and takes action on GDPR breaches and has powers to impose massive fines for those found guilty.
In a speech in New Zealand the UK’s ICO commissioner Elizabeth Denham revealed that in the first six months of the new law her office was seeing “More complaints from the public – from 9,000 to 19,000 in a comparable six month period. Complaints about subject access, data portability and data security. All of our front line services have jumped by at least 100%. More breach reports – over 8,000 since the end of May when it became mandatory in some high risk circumstances”.

Where has GDPR had most impact?

GDPR has certainly made the job of marketers and advertisers more difficult, not only in how they go about promoting products and services on behalf of their clients but also in collecting and analysing the results.
Facebook and Google (the two largest digital ad platforms) changed their rules to make themselves GDPR-compliant. They ended support for third-party audience technology and prevented marketers from exporting data. LinkedIn on the other hand still allows data to be downloaded.
In fact, in January in France, Google was hit by a €50m fine by its regulator for “lack of transparency, inadequate information and lack of valid consent regarding ads personalisation”.
In the UK in March the ICO fined Vote Leave Limited £40,000 for sending out thousands of unsolicited text messages in the run up to the 2016 EU referendum. It also fined a Kent-based pensions advice company £40,000 for being responsible for sending nearly two million direct marketing emails without consent.
From personal experience, the volume of unsolicited marketing calls has diminished noticeably and it is rare nowadays to visit a website that does not immediately advise visitors in a pop up of its cookie policy on information gathering and offer the option to manage or opt out altogether.
Despite the reduction in marketing emails and texts the volume of unsolicited telephone calls seems to continue, but most seem to come from abroad while purporting to be via BT.
While all this clearly means that UK advertisers and marketers may have to come up with more innovative methods it is surely a welcome relief to be pestered less frequently.

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Banks, Lenders & Investors Business Development & Marketing Finance General

April 2019 Key Indicator – the state of the EU economy

Car manufacture mainstay of EU economyLeaving aside its obvious concerns about its future relationship with the UK, the EU economy has more than enough troubles of its own to contend with.
With global growth slowing the EU economy can hardly expect to be immune, but there are some inbuilt issues that are likely to become more pressing and will need to be dealt with as a result.
Europe’s demography is against it with an ageing population and the number of people of working age falling by 0.5% a year despite which the EU unemployment rate has remained stubbornly high at 8% since the 2008 global financial crisis. This is unlike the USA which has a rising workforce, while the UK has a growing immigrant population, with both countries’ unemployment reducing significantly.
The global pecking order in terms of the size of national economies is changing with EU countries falling down the global rankings according to the latest HSBC economic model as highlighted by Hamish McRae in yesterday’s Evening Standard. Germany falls from fourth behind the US, China and Japan, to fifth, France to seventh, Italy to ninth.  HSBC notes that Austria and Norway won’t make it to the top 30 by 2030 and Denmark will drop out of the top 40. The UK, however, is ageing marginally more slowly.
McRae calculates on this basis that the EU falls from about 22% of the world economy to about 17% and without the UK it falls to below 14%.
There are political tensions in several EU countries, as elsewhere, which have given rise to populist movements, such as in Italy and in the ongoing push for Catalonian independence in Spain. With EU Parliamentary elections due in May, this is likely to be a worry.
The ECB (European Central Bank) is regarded as notably conservative and this may, in part, explain why recovery since 2008 has been so slow.
It must also be remembered that the EU is a mix of widely disparate countries, some still using their own currencies, others having adopted the Euro and this, too, creates some tension.
The “powerhouse” countries in the EU have always been Germany, UK and France, with the French and German economies relying heavily on manufacturing and exports, but these have become the source of their current troubles.
Germany narrowly avoided recession in the fourth quarter of 2018 with its largely export-oriented industry suffering, particularly the automobile sector due to a decline in the sale of new cars not least down to tariffs on imports into US and a significant drop in sales to China.  Its banks, too, have been struggling, hence the proposed merger currently under way between its two biggest banks, Deutsche and Commerzbank, a merger aimed at survival based on weakness not strength.
France has fared a little better, but not by much, and it has brought political troubles in the shape of ongoing weekly protests by Les Gilets Jaunes.
Italy’s banks, too, are in dire shape and the Italian economy has been struggling for the past 20-plus years, not helped by its national debt relative to its GDP being second only to Japan’s and its population getting smaller.
After narrowly winning its argument with the EU, which refused at first to accept its latest budget, Italy has recently announced that it will be the first EU country to take part in China’s Belt and Road initiative – an attempt to link Asia, the Middle East, Africa and Europe with a series of ports, railways, bridges and other infrastructure projects. Clearly, Italy has become tired of waiting for the EU to put its monetary house in order, but what are the prospects for its economy?
It has been argued, not least by the Guardian’s Larry Elliott, and by the French leader Emmanuel Macron, that the EU needs closer political and economic integration and that there are design flaws in monetary union that are becoming more obvious and in more urgent need of a fix.
Another issue that, Elliott argues, is making countries in the EU less competitive when pitted against the likes of China is that EU industries are mostly mature, more than 25 years old, and there are no equivalents to Facebook, Google and the like, nor any significant businesses in the emerging technologies of the fourth Industrial Revolution, such as artificial intelligence.
Clearly, there is much to be done to improve the EU economy although it does seem to focus on old industry rather than stimulate business based on new technologies and in Hamish McRae’s view, whatever the current Brexit troubles, it is in the interests of both UK and EU to co-operate.
 

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Business Development & Marketing General

Flexible working can foster innovation and creativity

flexible working is good for businessA set of annual awards launched seven years ago is demonstrating the positive benefits of allowing employees to work flexible and part time hours.
The Timewise Power Awards winners for 2019 have just been announced and, as the founders say, they demonstrate the art of the possible.
Among them is Srin Madipalli, a wheelchair user who works 85% full time for AirBnB and combines this with public speaking to raise disability and accessibility issues at forums including the United Nations, Rio Paralympics and the Tech Inclusion Summit.
Chris Bryant, a partner at Bryan Cave Leighton Paisner, works three days a week helping clients from all sectors to prepare for Brexit, and at the same time cares for his daughter and writes for musical theatre. His work has been performed at the Edinburgh Festival and is now being developed for a nationwide tour.
Amy Haworth, a director working on an 80% contract for Deloitte, combines her working life with 60 to 80 performances a year as an international classical singer, and Joanna Munro, creative head of Fiduciary Governance at HSBC Global Asset Management, has managed to combine her three days a week working for HSBC with completing a Masters in creative writing and is now writing a crime novel.
While others have combined their flexible working with starting up a new business, developing an app or caring for relatives, what they all have in common is that the businesses they work for are able and willing to accommodate and see the benefits of allowing their employees to work flexibly.
Often their work feeds back into their work for their main employer, to the benefit of both parties.

How a willingness to accommodate flexible working could benefit your business

There is some truth to the adage that a change is as good as a rest and certainly if you want to retain key people it is important that they feel valued and fulfilled.
However, it is perhaps taking too narrow a view to assume that their focus should be only and entirely on their work for the business.
The stimulation of an outside interest, or the possibility of pursuing a related interest that is not directly within the scope of their primary role can lead to innovative ideas being brought back into your business.
Also, the success stories of the winners mentioned above can benefit your business reputation, not only by demonstrating that it is a forward-thinking company when it comes to the terms and conditions of employment but also in the additional kudos from those employees’ successes in other pursuits.
Such enlightenment can also help a business attract and retain both outstanding and highly motivated people.
Please do respond with your own stories about similar examples.

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Banks, Lenders & Investors Business Development & Marketing General

March sector focus on UK food production, imports and exports

UK food export and importTea, the UK’s favourite beverage, could become a luxury if analysis by HSBC of a no-deal Brexit is to be believed.
The analysis, published by Business Insider in January, puts the amount of food imported into the UK at 80% if ingredients for processing products are included. Tea, for example, may be processed in the UK but is not grown here.
The prospect of no easily-available cuppas should really concentrate the mind!
Joking aside, an examination of UK food imports and exports indicates just how closely-integrated the food and food processing supply chain really is, and how much relies on the EU.
An analysis of the food industry must cover trade in both ingredients and processed foods. It is complicated by the fact that some ingredients, such as beef, pork and lamb, are often produced in UK but exported for processing and then re-imported as finished products such as cuts of meat ready-packaged for sale or as ingredients in ready-meals. This is the result of us in UK having so few processing facilities.
A further complication for UK food producers/farmers is the shortage of labour, from overseas workers for picking and packing to HGV (Heavy Goods Vehicles) drivers for transport.
This all suggests the likelihood that the cost of food imported into the UK is likely to rise sharply.

What food and drink does the UK export and to where?

According to the most recent statistics from the FDF (Food and Drink Federation) the top ten UK exports by value, in order, for 2018 were:

  1. Whisky
  2. Chocolate
  3. Cheese
  4. Salmon
  5. Wine
  6. Gin
  7. Beef
  8. Beer
  9. Breakfast cereals
  10. Soft drinks

At the moment it calculates that some 75% of this trade is to countries within the EU and as such may mean that new trade agreements, tariffs and so on may have to be developed with both EU and non-EU countries. Some UK food products have EU Protected Food Name status.
Non-EU target markets are likely to include New Zealand, Canada and/or the USA, China and other Asian countries but again all will need trade agreements to be put in place.
ADAS, the UK’s largest independent provider of agricultural and environmental consultancy, rural development services and policy advice, has analysed some of the potential opportunities for the UK to pursue in developing food exporting outside the EU.
For beef and veal, it suggests China, rest of Asia and Africa for offal and the USA for premium cuts but lists among the UK’s weaknesses its limited market access, uncompetitive pricing and the lack of processing facilities.
It is a similar story with sheep products, with the additional factor of already-established competition from Australia and New Zealand. Pork exports could be targeted at South Korea, Vietnam, China and the rest of S Asia but this will take time to put in place.
For dairy products ADAS sees opportunities in countries where there is a growing and affluent middle class, such as China, the Middle East and North Africa.
The UK already has an established global trade for its cereals and oilseeds with Algeria, Tunisia and Japan and here, too there may be potential for further market development.
The AHDB, (Agriculture and Horticulture Development Board, Stoneleigh, Warwickshire), too, sees potential for expanding UK food exporting particularly in dairy products.
Its analysis says: “The main trade-related opportunities of Brexit for the UK dairy industry will focus on displacing imports or growing new export markets. If the UK manages to negotiate a trade deal with the EU allowing tariff-free access, then the likelihood is for business as usual with the EU.
“However, if not, any import tariffs imposed by the UK could provide an opportunity to substitute a number of imports with British milk. Experience from the EU suggests that tariffs may limit the scale of imports of commodity-type products, although speciality products will probably still reach the UK.
“Combined with increased supply chain investment, this could see the UK progress as an industry.”
While opportunities for export are identified in all the analyses, they are contingent on the ability to negotiate Free Trade or Low Tariff agreements with potential customers as well as fending off already-existing arrangements that have been established by the EU.
The other glaring UK deficiency is in the scarcity of in-country facilities for processing foods for export.
It also remains to be seen how UK farmers and growers will be affected by the loss of various agricultural subsidies that have protected EU farmers for many years.

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Banks, Lenders & Investors Business Development & Marketing Finance General

March Key Indicator – Investment in the UK

investment on solid foundationsInvestment is a tricky term to unravel largely because the investment objectives are key to any decision and predicting the future is so difficult, especially given that past performance is rarely a predictor of future returns. Despite the lack of certainty, much analysis is necessary.
Much has been made recently in the UK’s uncertain economic climate about the massive reduction in investment being made by UK businesses in their companies.
It is argued that with the future so uncertain, businesses are holding onto their cash reserves and delaying plans for growth and indeed towards the end of last year the BCC (British Chambers of Commerce) was warning that British businesses had paused investment in growth. However, this is also an excuse used by weak leaders and those who lack a vision.
But investing in the future and growth of your own business is only one level of investment.
At a higher level, investors can be pension funds, investment “vehicles” or funds run by investment companies, and Foreign Direct Investment (FDI) by businesses from one country into those in another.
A rise in investments in the stocks and shares of businesses in an economy is generally regarded as a positive thing.
So, at the moment, UK equities seem to be doing well in that Bloomberg, for example, has just reported that the UK’s top ten investors, in which it includes Invesco, Schroders, Aberdeen Standard and Legal & General, have increased their holdings of UK-listed shares by more than a third over the last three years. This is interpreted as showing a degree of confidence in the UK’s long-term future.
In January CityAM interviewed Shroders’ CEO Peter Harrison reporting that he expected 2019 to be a better year for investors.
Similarly, ONS (Office for National Statistics) data shows that overseas investment into the UK is at its highest level ever, with investment from India, the US and from Japan leading the field.
Sectors currently seen as attractive by equity investors are the financial services and, for both Angel and Venture Capital investment, the UK tech sector, particularly for those businesses developing innovative software, and in Fintech (financial technology).
The key to understanding investors and their behaviour, however, is to examine their expectations.
Much has been made of the short-termism of many investors and shareholders and its negative impact on businesses. In this scenario, investor pressure is for maximum profits or returns on their money over a short period. This pressure can change the behaviour of boards of directors and even influence the remuneration packages of CEOs so that those who deliver maximum profits in the shorter term are well rewarded.  It is questionable, however, whether this is in the longer-term interests of a business.
Generally speaking this type of expectation is most likely to come from pension fund-type investors, where fund managers themselves are under pressure to maximise profits for their members.
Arguably the most successful and reliable investment funds, however, are those that take a longer-term view and focus on the lifetime value and potential of a business.
Warren Buffet’s Berkshire Hathaway vehicle and Terry Smith Fundsmith fund are the top performers using this type of investment model.
Buffet’s “value investing” style focuses on business, management, financial measures, and value and the emphasis is on the long term. He is less interested in the market or the economy or investor sentiment, focusing instead on consistent operating history and favourable long-term prospects.
Terry Smith uses a similar approach as described in a Guardian article last year. Since its founding in 2010 it has made a gain of 309%. His fund has a low turnover of shares and his message is simple: “Buy good companies. Don’t overpay. Do nothing.”
Smith says he avoids certain sectors like insurance companies, real estate, chemicals, heavy industry, construction, utilities, resource extraction and airlines. He recently launched a new fund, called Smithson, focusing on in mid-size companies. Like Buffet’s, Smith’s focus is on the longer-term value in businesses and this is where he chooses to put his money and those of the investors who are members of his fund.
Clearly if a business can attract the interest of either Buffet or Smith in investing it can have some confidence in its stability and its future. Strangely their strategies are similar to those of well run private businesses, although this is perhaps less surprising given that their money is in their funds.

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Business Development & Marketing Cash Flow & Forecasting Insolvency Turnaround

How to make failure your first step towards business success

failure is just one step on the road to successNone of us is perfect.  Perhaps that is why we admire so-called successful people so much.
But behind almost every business success lies a series of failures. Just ask Thomas Edison, inventor of the electric lightbulb, or Richard Branson, who has made no secret of his past business failures, or even Luke Johnson, investor in and chairman of the recently-failed Patisserie Valerie and business blogger who has written extensively about failure and pertinently for him how to spot and prevent it.
Edison said of previously unsuccessful attempts at his invention: “I have not failed. I’ve just found 10,000 ways that won’t work.”
He also said: “Our greatest weakness lies in giving up.” This along with learning the lessons from failure is the key to understanding how successful people approach failure.
Failure would be better rebranded as a trial and error approach to achieving goals where essentially each instance of failure is primarily a learning experience. Each failure simply requires humility that recognises our fallibility and a degree of honesty, thought and a willingness to learn.

Converting failure to success is all about attitude

A business failure can be a devastating experience but the worst things you can do are wallow in self-pity, sink into a depression, give up or, even worse, blame others. These characterise the behaviour of a victim.
There are plenty of business gurus with advice about dealing with failure, and most will start with advising you to accept that you may have been to blame, but the key is to move on by analysing what, precisely, went wrong and to then try again, differently. Trial and error.
Firstly, you should resist the urge to repeat past mistakes by trying the same thing again, only bigger or cheaper. For example, if your customers aren’t buying your products or services you need to give careful thought to whether your business offers something they want, in the way they can buy it, rather than something you thought was a great idea but they don’t want or don’t know about. How much market research did you actually do?
Secondly, how competent are you at running a business?  Did you have a business plan? Did you regularly check cash flow, produce management accounts and so on?  Did you put in place robust credit control and other processes? We cannot all be good at everything so if you feel you do not understand any of these subjects properly you should have the humility to get in expert help and be willing to act on it.
Were you sufficiently passionate and committed to your business? It may have seemed like a sure fire way to make a lot of money, but that, on its own, is no guarantee of success.  It is also important to be emotionally invested in what you are doing and committed to making it work.
There are plenty of inspiring examples of people who have become successful after multiple failures but what they all have in common is an ability to be honest with themselves and to learn from others, to be passionate about their idea and to never give up.

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Business Development & Marketing Cash Flow & Forecasting Finance General

Is outsourcing a blessing or a curse for SMEs?

outsourcing can reduce office chaosAccording to the GMB union the Government’s use of outsourcing has increased since the collapse into insolvency of the firm Carillion at the start of 2018, pushing the value of contracts up by 53%.
Whether the increasing use of outsourcing is a good or a bad thing depends on many factors.
For those sub-contractors and suppliers to Carillion who either lost contracts, money or work, it clearly was not a good thing as they await the outcome of investigations by Insolvency Practitioners to see whether there will ever be any recompense.
Pertinently for those owed money when a company enters an insolvency process, its employees are paid in priority or by the government if there aren’t sufficient funds, whereas its sub-contractors are treated as unsecured creditors and rarely paid anything like the amount they are owed.
But many SMEs depend for at least some, if not all, of their revenue on providing various outsourced services to their clients, from IT support and website building, to supplying parts or labour as part of a supply chain in construction, engineering and elsewhere.
Many self-employed people also provide services, from book keeping to marketing services.
The problems come when the buyer of the services is less than prompt about paying, often much later than in the terms and conditions, or perhaps they put pressure on suppliers to do work either for free or at extremely low cost, offering the “carrot” of more work or exposure that will be good for their business and result in further work.
Many self-employed people report, however, that the “carrot” fails to materialise and that in fact it puts a downward pressure on people and businesses offering services in their sector.
There is no doubt, though, that for those SMEs with the right skills and offering, and especially where there is a skill shortage, outsourcing can benefit both parties.

How to maximise the outsourcing benefits and minimise the risks

While using outsourced skills can improve a business’ output and reputation while minimising costs or at least avoiding employee liabilities, there are some pitfalls to be wary of.
The main ones involve not having the skills and owning intellectual property in-house which can expose you to supply and demand costs when business is growing. This is common in the construction and IT industries.
There is also the potential for the leak of sensitive information by people who are likely to have less loyalty to the business than those who are directly employed.
Another common problem is a lack of clarity about roles and contractual obligations.
Consistent quality of the work being provided and also adherence to deadlines may also be a problem.
At the initial stages of choosing a business to which to outsource a function or task, therefore, there needs to be very clear and detailed discussion of all the above issues with clear contractual obligations underpinned by deadlines with processes laid down for quality control and confidentiality together with penalty clauses should the provider fail to meet them.
By the same token, there should be a clear agreement on payment amounts and dates.
All of these should be included in a written agreement and signed by both parties as a contract which most likely will only ever be referred to when disagreements arise.
Both parties, those offering outsourced services and those buying them, can benefit from the transaction, but only if there is transparency with safeguards in place as well as honesty and integrity.

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Business Development & Marketing Cash Flow & Forecasting General

Are your staff loyal? Retaining valuable staff depends on how you treat them!

valuable staff should be well treatedIn a mature economy with an ageing population and amid rapidly-changing technology, businesses are finding it increasingly difficult to find the skilled staff that they need.
This makes it a buyers’ market for job seekers and the evidence for this has been mounting particularly in sectors such as construction, engineering, manufacturing and IT where wages are rising significantly above inflation.
In December a report from Barclays showed that only 6% of people aged between 16 and 23 wanted to work in manufacturing and official figures have also shown that workers are switching jobs in record numbers.
A BCC (British Chambers of Commerce) report based on a survey of 6000 businesses in January revealed that four fifths of employers in manufacturing reported difficulties in finding the right workers and in the services sector, which makes up nearly 80% of the economy, seven in 10 said they had struggled to recruit.

Persuading valuable staff to stay with your business

At the moment UK employment is at its highest level ever and depending on proposed Government changes to immigration rules, it may become more costly, and difficult, to recruit from overseas.
Projections for 2019 suggest that businesses will have to increase rewards and perks to secure and retain valuable staff and will have to become more ethical. Alternative work conditions, such as remote working may also be on the rise.
What do workers value?
First and foremost, they want to feel valued and respected and to be involved in the progress of the business for which they are working.
While adequate remuneration is a part of this, so, too is the possibility of progressing within the business so listening to their ideas is key as is offering training, particularly if parts of the business process can be automated.  The introduction of AI should not be seen as a threat but can be used as an opportunity to offer upskilling to at least some of those who may be affected.
There has also been a lot of emphasis on the disparity between women’s pay when compared with men’s and the pressure to show female employees that they are an equally valuable part of the team with the same prospects and opportunities is becoming increasingly important.
Employee wellbeing, too, is moving up the agenda.  38% of workers say they have suffered from work-related stress. While pressure can be a positive motivator for improving productivity, when it becomes stress it can lead to mental health problems.
A clearly laid-out set of policies on mental and physical health should be a part of every employee handbook and should be acted upon if the need arises.
Being part of an ethical company that is not afraid to publicise the fact can also be important.
Businesses can benefit from being more innovative in the way they support and reward staff and should look beyond their current policies for ideas.
This more than simply paying high wages, it is your actions and behaviour as a manager and leader that are also key for staff when considering if they should stay.
There are a number of quotes about valuing staff, I like this one by Richard Branson: “Train people well enough so they can leave, treat them well enough so they don’t want to.”

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Business Development & Marketing General Interim Management & Executive Support

Is your business barely managing and if so why?

Business barely managing in stormEvidence suggests that many UK businesses are barely managing when compared to foreign-owned businesses of equivalent size operating in the UK.
At the moment it is easy to blame everything on the uncertainty surrounding the outcome of the UK’s negotiations to leave the EU, especially as political positions remain entrenched and seemingly irreconcilable with just 40 or so days to go before the deadline.
As the most recent productivity figures from the ONS (Office for National Statistics) showed, productivity and output per hour fell to their weakest in two years at the end of 2018, prompting FSB (Federation of Small Businesses) Chairman, Mike Cherry, to opine: “”Productivity data demonstrates exactly what a prolonged period of uncertainty does to an economy. Small business confidence has dropped to its lowest point since the financial crash, with four in ten firms expecting their performance to worsen.”
Of course, Brexit has prompted more businesses to divert their attention to do such things as stockpiling raw materials or components to mitigate any potential supply chain disruption, and of course, investors have been holding onto their money during this period of uncertainty.
It has also been suggested that another inhibitor to SME growth and scaling up has been what is known as the Seven-year Rule, whereby tax breaks for investors, made through tax-efficient venture capital trusts or via the enterprise investment scheme (EIS), are only accessible to companies for seven years after they make their first sale. This, it is argued, makes it harder for SMEs to access the finance they need to scale up.

Is business barely managing a “British Disease”?

However, in this context I would argue Brexit is a distraction and a convenient excuse for poor productivity and that the answer lies in the way UK businesses value, or actually don’t value, their people.  This is backed up by plenty of research from many sources.
According to the Guardian business and economics opinion writer Philip Inman there is a significant difference in productivity between the way foreign-owned businesses in the UK and UK-owned ones are run.
According to ONS figures foreign-owned businesses make up one in four of large UK-based businesses and are twice as productive as their domestically-owned equivalents. When it comes to medium-sized companies the foreign owned ones are about three times as productive.
Why should that be?
There is, argues Inman, plenty of evidence that the foreign-owned UK businesses pay attention to two things that affect productivity: processes and structure.  The ONS has found that there is a positive link between attention to these two and productivity.
Other researchers have argued that UK businesses do not value or pay enough attention to good middle-tier management, especially in family-owned firms that have been running for more than three generations.
Middle managers often have little management training or support and this leads to a lack of confidence among both senior managers and workers that their ideas are valued and suggestions acted upon.
UK businesses of all sizes clearly need to pay more attention to their people skills and competence, their processes and structure, especially once they find themselves cast adrift on post-Brexit competitive waters.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance

What’s ahead for the retail sector in 2019? – February sector focus

retail vanishing from high streets?It has been obvious for some time that the High Street is undergoing massive changes as online shopping gains a growing share of the retail pie.
Not a week goes by without another announcement of a “big name” closure or restructure and the New Year has been no different after mediocre Christmas sales with Hardy Amies and HMV falling into administration for a second time, Patisserie Valerie and Odd Bins filing for insolvency and Marks & Spencer announcing further store closures as part of its ongoing restructuring.
The figures make gloomy reading.
Deloitte says it has been instructed by more than 20 struggling high street chains in the past two months to assess whether they are eligible for restructuring their debts and lease obligations, according to the Sunday Times.
Towards the end of January the Guardian carried out a survey of the decimation that has beset High Streets in 88 major town centres in England and Wales and found that they have lost 8% of their shops on average since 2013.
Some have fared worse than others with Stoke on Trent topping the list with a loss of 23% of its 415 stores in five years.
Clothing and restaurant chains have fared worst, according to the research, but, surprisingly perhaps, charity shops have also been hit.
By contrast it also revealed that “a thousand extra hair and beauty salons have sprung up in our town centres”. Also, convenience stores and independent supermarkets have also grown in almost all town centres.

The stresses and strains on the retail sector

In common with other businesses, but arguably having more impact on SMEs, retail has had to contend with rising minimum wages and pension contributions for staff.
But added pressure has come from the high cost of rent and of town centre business rates, both of which the online retailers escape. Online retail now accounts for 20% of consumer retail spending, which adds to the pressure on High Street retailers as consumer buying habits change. This 20% figure when compared with 8% of shop closures would suggest there are many more closures to come.
At the moment, there are signs that worry about the future of jobs and the unknown impact of Brexit is currently putting a dampener on consumer spending and confidence.

Is there any light in 2019 at the end of the High Street retail tunnel?

Certainly, the Sports Direct owner Mike Ashley seems to think so, as do some others.
HMV has just been purchased by a Canadian business, Sunrise Records, although 27 stores will be closed as part of the deal.
Mike Ashley has purchased a share in House of Fraser stores and Evans Cycles to add to his growing portfolio and has recently had some success in renegotiating rents with landlords in some shopping centres, saving some House of Fraser stores that had been under threat. He is also laying siege on Debenhams hoping to pick up another High Street trophy.
Ashley has been vocal in calling for a complete rethink on business rates and for a 20% sales tax to be imposed on online retailers which would help justify his acquisition strategy.
Sir John Timpson has also called for business rates to be replaced with a sales tax operating in a similar way to VAT.
The MP Grant Shapps has also called for radical action to save the High Street, including a reduction in business rates with which he claims the government has so far only “tinkered” with.
These calls have also been backed by Mike Cherry, chairman of the FSB (Federation of Small Businesses), adding “A healthy high street should be diverse – not just featuring retail but also hospitality, services like hairdressers as well as gyms and shared workspaces for the self-employed. High parking charges and a lack of spaces often put off shoppers from visiting town centres, instead favouring out-of-town retail parks with free parking.”.
To add weight to their argument the OECD (Organisation for Economic Co-operation and Development) has said Britain has the second-highest property taxes in the world with business rates, council taxes and stamp duty making up £1 of every £8 collected by the Treasury.
In a sign of some movement in December it was announced that Nicky Morgan MP, chair of the Commons Treasury Select Committee, will hold a joint evidence session with the Housing, Communities and Local Government Committee to agree the terms of a new inquiry into the business rates system.
The death of the High Street has been predicted for some years but there are signs that some people feel there is life there yet, subject to some radical rethinking and tax reform.

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Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting Finance Turnaround

The state of UK exporting – our February 2019 monthly Key Indicator