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If remote working becomes the new normal businesses must pay attention to GDPR

GDPR and remote workingRemote working has enabled some businesses to carry on throughout the coronavirus lockdown but have they paid enough attention to GDPR (General Data Protection Regulations)?
As more businesses open up with the easing of restrictions a combination of more stringent safety measures in workplaces and a realisation that they can carry on successfully with remote working may lead many to adopt remote working as part of their normal business practice.
GDPR was brought in in May 2018 in the UK to strengthen data protection for individuals. It imposed significant financial penalties, as much as 4% of a company’s annual turnover, for breaches and failures.
However, research by the IT support company ILUX, among 2000 remote workers during lockdown revealed that one in ten believed that their expected working practices were not GDPR compliant.
A combination of these workers using their own IT equipment and inadequate IT support from their employers at a time of crisis was partly to blame for this.
If businesses are intending to continue using remote working for all or part of their workforces, they will need to revisit a number of practices that affect GDPR.
Some will perhaps require a significant outlay, but it is arguably money well spent if the alternative is a massive fine for non-compliance.
Ideally, remote workers should be supplied with business-owned devices, not home computers, phones and/or tablets, preferably connected to the business’ intranet.
All devices should have the latest patches applied, to ensure security vulnerabilities or other bugs are fixed, as well as anti-virus, anti-spam and web protection. This should apply not only to devices but also to network security such as device encryption, firewalls and web filtering.
In addition, the business should revisit its GDPR guidance for secure working for employees and advise them on how best to maintain their IT security, including passwords and replacement policies and best practice including using multi-character passwords, two-factor authentication, and not re-using passwords.
GDPR security for remote workers also includes keeping laptops, mobile phones and tablets securely locked away when not in use and not allowing family members or housemates to use, or see, anything work-related. The same applies to removable devices like USBs, which should also be checked first for malware before use.
Any personal data remote workers need to access for their work and then stored on a USB or in printed form should also be locked away securely when not in use.

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Cash Flow & Forecasting Finance General Uncategorized

What is the difference between a Depression and a Recession?

recession and depressionBoth a recession and a depression are characterised by an economic decline but the difference between them is down to the length of their duration with depressions lasting years.
An economy is defined as being in recession when there have been two consecutive quarters in which growth as measured by GDP (Growth Domestic Product) has contracted.
This is usually caused by a reduction in business activity and consumer confidence, such that businesses may start laying off employees and cutting back on production and on investment as their focus shifts almost entirely to their cash flow and balance sheet.
In the most recent recession, in 2008, the precipitating factor was a liquidity crisis that began in the USA where banks had lent what was perceived to be too much money on what came to be seen as risky mortgages on which borrowers then defaulted. This resulted in a loss of confidence in banks, which declined to lend to each other which in turn led to a liquidity crisis.
Recessions are much more frequent than are depressions, indeed, according to an article in Business Leader in March this year: “In the past 100 years, there have been dozens of recorded recessions (both national and international) – compared to just one depression in the same time period.”
The last depression was in the USA beginning in 1929 and lasting for a whole decade. While not strictly defined, a depression is characterised by very high levels of unemployment such as 25%, a dramatic fall in international trade such as by as much as two-thirds, and prices falling by more than 25%. They are also characterised by significant declines in stock market values and a large numbers of bankruptcies.
There has been some speculation that the Coronavirus pandemic could precipitate a depression given how much economic activity has ceased as a result of the lockdown rules imposed by many countries. However this is simply speculation and the short term nature of its impact is unlikely to be the sort of once in a one hundred years event that causes dramatic and long term economic collapse.
The IMF (International Monetary Fund) has warned that the situation could provoke a recession as severe as in 2008 but none of the serious pundits are predicting a depression.
In fact, some economists argue that a repeat of 1929 could not happen because Central banks around the world, including the USA’s Federal Reserve, are more aware of the importance of monetary policy in regulating the economy and will therefore step in with support and stimulus packages to forestall this.
 

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Coronavirus Business Interruption survival will need agility not pride

Agility is essential for business survivalArguably, all successful businesses need to exercise agility in a fast-changing world, but never more so than now in the midst of the Coronavirus pandemic.
While there is nothing wrong with having pride in your business, pride is also associated with sticking doggedly to a plan that is not working due to a change of circumstances. Just because you have always done things one way doesn’t mean that way is always right in normal circumstances, let alone in abnormal ones like the current situation. In a crisis everything you do should be challenged and often fundamental change is necessary if a business is to survive.
Business agility is therefore a key attribute for dealing with adverse circumstances, to be creative and adapt to the changing environment. This in particular applies to three main areas: staff, customers and processes.
Social distancing has meant that for some businesses their staff have had to work remotely while others are needed in the office to maintain systems. This has involved setting up new policies to protect staff who need to come into work, while at the same time making it possible for others to work from home and keep in touch. Equipment for remote workers, remote access to central servers, online security, new ways of working together and new forms of communicating have all had to be learnt very quickly. Better this than some companies who simply closed their doors when the big bad wolf began prowling.
There are terrific examples of firms that have adapted by changing their business completely such as restaurants that have switched to offering ready-meals for either collection or delivery, enabling them to keep going after they were forced to close their doors as part of measures to contain the spread of the virus.
Others, among them distilleries, have switched their production lines to manufacture such products as hand sanitisers and engineering firms that now make ventilator equipment for hospitals.
Some clothing manufacturers have switched to producing hospital protective clothing of various types.
A wholesale bakery client has had to replace its traditional hotel and restaurant market and now supplies market stalls, independent retailers and farm shops with its turnover nearly back at pre Coronavirus levels, all in six weeks and very different from their initial assumption that they should cease baking.
Another client, a plant and equipment rental company, now supplies the new Nightingale hospitals when it too had assumed it should close down.
A local pub now sells garden bedding plants from its front gate and has shown far more initiative than the local garden centres that have all closed down.
With consumer behaviour having radically changed as a result of the self-isolation rules, many retailers have massively increased their online presence, although it has to be said that when people are worried about their futures and their finances there will inevitably be a reduction in the purchase of non-essentials even online.
Perhaps the most agile and innovative have been the smaller SMEs, particularly tech support companies and gyms, who have taken their services online, producing regular teaching and remote IT problem solving services to help people. Many have offered a combination of part-free and part paid-for services, which are likely to be remembered by those they have helped once life has returned to normal, however different that “normal” may turn out to be.
As economies move out of the containment phase and some restrictions are loosened or removed altogether, your business will need to remain agile. There is some good advice from Accenture here.
It will not be a case of returning to the status quo-ante and it is too soon to be able to assess how customer and client behaviour will have changed in the medium term, so it may be that your business will have to develop a permanently agile mind-set in order to survive and remain resilient in the face of changes in both consumer behaviour and structural change in industries and the economy.
This may mean changing your business model and plan and paying much more attention to markets and demand.
A prerequisite to surviving a crisis is the ability to overcome the natural feelings that can overtake rational thinking. Emotions such as fear and anxiety relating to the unknown, the unanticipated event, a loss of control and unpredictable outcome are all natural but they need to be suppressed to allow rational behaviour and creativity to emerge as the way of finding solutions and new initiatives for dealing with the new circumstances.
It doesn’t matter that many initiatives won’t work so long as pride doesn’t get in the way and you acknowledge you were wrong and try something different. Paralysis and inaction are the real enemy.
For details and my free guide covering all the government Coronavirus Interruption Support initiatives check out the Online Turnaround Guru website.
While it is fine to have some pride in how you may have steered your business through the early stages of this crisis and survived, it is worth remembering the old saying “pride comes before a fall” so it is worth remembering the lessons we gain from experience. And, while we don’t know what we don’t know, we can always keep looking for answers and keep asking questions.

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In a crisis it is crucial that SMEs keep staff updated, especially those working at home

working at homeIn the current Coronavirus-induced crisis people are understandably worried and frightened, for their jobs, their families and their health so it is crucial for SME employers to communicate changes as quickly and sympathetically as possible.
After all, while you as SME owners are currently facing unprecedented challenges to your business and feeling bleak if not panic ridden about your prospects for survival, at some point this crisis will come to an end and you will hope to still have a business.
With all the financial support measures recently announced by the Government, most SMEs do not need to close their businesses or dispense with staff.
I have posted the latest information with advice for SMEs on how to deal with the coronavirus pandemic on onlineturnaroundguru.com and will update as the details become clearer.
While in the short term SMEs may have had to ‘furlough workers’ (see the above advice link for what this means) but eventually staff will be needed back at work.
Staff are most likely to remain loyal if they feel their employer has done their utmost to help and has kept them informed of developments and these days the technology available is so extensive that this is much easier to do – whether it be a conference call or virtual meeting via an online platform to people who are working from home.
McKinsey.com has some very useful guidance for leaders coping with a crisis.
Firstly, it says: “they cannot respond as they would in a routine emergency, by following plans that had been drawn up in advance. During a crisis, which is ruled by unfamiliarity and uncertainty, effective responses are largely improvised.”
It is also crucial, it says, to promote “psychological safety so people can openly discuss ideas, questions, and concerns without fear of repercussions”.
This means dealing with the human tragedy first and foremost with empathy and understanding as well as being transparent about the circumstances.
If the situation means the way the company does business SME employers should discuss the options as soon as possible.
Acas also has some useful advice:
“Where work can be done at home, the employer could:

  • ask staff who have work laptops or mobile phones to take them home so they can carry on working
  • arrange paperwork tasks that can be done at home for staff who do not work on computers.

 
If an employer and employee agree to working at home, the employer should pay the employee as usual, keep in regular contact and check on the employee’s health and wellbeing.
You may be able to pivot your business in such a way that it can keep going, as this London SME restaurant chain has done after the Government ordered all restaurant and pubs to close.
Leon is to turn its 65 UK restaurants into shops, selling meals via both click-and-collect and delivery from Wednesday. Meals will be placed in ready meal-type plastic pouches which are refrigerated and can be heated, stored or frozen at home.
The company’s founder John Vincent has said the move could save Leon as a business but also relieve some of the pressure on the food retail stores: “A lot of people in the industry are just giving up and shutting up shop. But we think this way we can keep 60% of our stores open and keep food production going.”
A good example of a business using agility at very short notice to survive and save staff jobs when It is important to consider the second and third order consequences of any decisions before acting on them while not delaying action.
Check out onlineturnaroundguru.com for more tips on survival
Otherwise please stay safe, you do not need to deal with this alone.

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Banks, Lenders & Investors Finance Uncategorized

Key Indicator – investment decisions in a mature business cycle

21st century city setting for mature business cycle

A mature business cycle is one where the prevailing conditions are such that any economic slack is largely used up and assets are richly priced after a period of expansion.

Arguably this is the position in which the economies of the developed countries, such as the USA, UK, EU and Japan now find themselves, where there is a stable population and slowing economic growth. In this context a growth rate of 2% is seen as acceptable.

Arguably, too, mature economies are at a pivotal moment, in that a market economy is never static and there have been signs for some time that the situation is somewhat volatile, as a selection of headlines in any period illustrates.

For example, on April 28 a new report on global trends published by KPMG Enterprise suggested that increased activity from venture capital investors had been pushing up deal prices in the North of England, and the billionaire investor Warren Buffett told the Financial Times that he is “ready to buy something in the UK tomorrow” regardless of Brexit.

A month later, a member of the Bank of England’s MPC (Monetary Policy Committee) was reported in The Times as saying that “levels of business investment in Britain could be stronger than they appear, because official measures underestimate spending on intangible assets”.

Within days of the collapse of British Steel in Scunthorpe into administration there were reportedly 80 potential buyers for the business.

All this seems positive but at the same time there are equal numbers of less positive headlines suggesting a global economic slowdown, rising prices and inflation in some countries and worries about an imminent recession being due at this point in the economic cycle.

According to a recent article in the Economist on the mature business cycle, markets are choppier, perhaps due to the latest developments in the on-going trade war between the US and China, and it would be wise, it says, for investors to watch what happens in the foreign-exchange market where, it argues, the dollar is “a thermostat for global risk appetite: it rises with a weak dollar and falls with a strong one”.

Clearly, for investors, especially those that are rent seekers or seeking quick returns on their money, the current volatile economic situation is hardly welcome. Questions arise about where it is safer to put money and it is hardly a surprise that commodities such as oil (see last month’s Key Indicator) are seeing significant price rises.

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Banks, Lenders & Investors Finance Insolvency Uncategorized

Are Internet unicorns another bubble destined to burst?

Reminiscent of the hubris leading up to the 2000 dot com crash, the start of this year there has seen a queue of internet unicorns lining up to launch on the stock market via Initial Public Offerings (IPOs).

A unicorn business is defined as a private, venture capital-backed firm worth over $1bn. Among those that have either launched IPOs or considering them are Lyft (launched in March), Uber (launched in early May), Pinterest, AirBnB and possibly We Work and Slack.

So far, the results have been distinctly underwhelming with Lyft’s shares valued at $72 each on debut, giving the seven year-old company and rival to Uber a market value of slightly more than $24bn.

Uber set its launch value at $90 billion (£70 billion) and listed share prices at $45 each. However, within hours on its first day of trading Uber’s share value had dropped by 7.6% down to $41.51.

Neither of the two ride-hailing businesses has so far ever made a profit.

Last year, despite boasting revenues of $11bn Uber made operating losses of $3bn and while its revenues grew from $343m to $2.1bn between 2016 and 2018, its losses also soared, from $682m to $911m.

The hubris might best be justified by the fact that We Work was valued at ~$20bn at last fundraising, despite last year losing ~$4bn. Contrast this with UK listed Regus that made ~€800m last year and is currently valued at ~$4bn.

There is no doubt that trading conditions in the last two years have been challenging, with a global economic downturn, trade wars and political populist movements all making markets more volatile.

This may be behind the incentive for unicorns to rush into IPOs before economies find themselves in recession. Again, readers might like to recall the market bubble ahead of the dot com crash in 2000 when Lastminute.com was the last of old “retail” internet firms to list before the crash with many of those who missed the boat subsequently falling by the wayside.

Are there more deep-seated problems with internet unicorns?

Ilya Strebulaev, professor of finance at Stanford University, has extensively researched private venture capital backed companies and come to the conclusion that unicorns are overvalued by about 50%.

Prof Strebulaev argues that typically venture capital-backed businesses make losses “because they basically sacrifice profits to achieve very high growth or scale” but the question is whether their business models will be sufficiently flexible to allow them to convert losses to profits over time.

The current crop of internet unicorns are significantly larger than the internet companies that were involved in the mid-1990s dot com bubble and 2000 crash but a lot depends on their plans for the future.

Lyft has plans for using the money generated from its IPO to invest in acquisitions and technology, including autonomous driving, for example.

Uber has already suffered from protests by its drivers over their treatment with stories rife of drivers earning so little that they have to sleep in their vehicles and with protests ongoing there are concerns that it would face significantly increased costs if forced by regulators to classify drivers as employees rather than contractors.

An item in its IPO prospectus is particularly telling “as we aim to reduce driver incentives to improve our financial performance, we expect driver dissatisfaction will generally increase.”

If these companies are pinning their hopes of future profitability on driverless cars and dispensing with drivers altogether they, and their investors may have a long wait.

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Business Development & Marketing General Uncategorized

What are the benefits to SMEs of collaboration with corporates?

skydiving collaborationThe 2018 Global CEO Outlook by KPMG found that 70% of the 150 UK CEOs involved were in favour of collaboration with start-ups and SMEs.
Many cited the benefits to them of collaboration helping them to drive innovation to remain competitive and support their growth objectives, particularly where new businesses in the tech sector can help their larger partners to become more agile.

Collaboration is not a one-way street

One of the difficulties cited with collaboration, however, is achieving the right fit in terms of shared aspirations and culture. So, it is important that potential misunderstandings are ironed out before working together.
Both sides should want to establish a relationship based on trust which includes understanding others’ as well as their own needs and agreeing how any shared knowledge will be used. Equally, both sides need to be prepared to learn and this may be more difficult for those involved in a large corporation, where there are often clear and bureaucratic lines of communication and decision-making.
There is an argument that to be sustainable the corporate can learn much from the SME/start-up and how to think like a smaller business.
However, the benefits should not be one way.  While it is clear how large corporations can benefit, it is less clear what is in it for SMEs or start-ups unless they are agreed in advance such as access to contacts, finance, resources, technology and distribution channels.
A mistake that corporates make is thinking SMEs want advice when they generally want help to grow. Indeed, all too often the executives of large firms have little understanding of the problems facing small firms. They do however have access to resources that can benefit the SME.
A small business is unlikely to have the spare capital to be able to invest significantly in marketing or R&D. When resourced are limited and there is a prospect of running out of money, the issue for SMEs is the uncertainty of spending time and money while they search for sales that can be replicated. This can take longer and use more resources than the SME can fund hence the benefit to them is a leg up from a larger partner.
Once the SME finds its formula for growth, a larger partner can be particularly useful by helping with the planning and implementation. SMEs can learn how the “big guys” operate, how they establish supply chains and install systems and processes.
Working with others can be frustrating and is often a choppy ride, according to Stefan Tan writing in a blog for dashmote.com.
He describes it as being a bit like white water rafting, with all its thrills and spills but “the experience can be truly rewarding if you are able to endure the ride”.
He says it can take time to build a solid relationship and depends on both partners working to understand the benefits and limitations of each one’s corporate culture. Often this can be achieved by running a pilot project to iron out the differences and once that phase has been completed to then scale up activity, being mindful of KPIs and costs.
Above all, he says, they should be mindful that there will always be some cultural differences and that it is important to recognise that neither’s business model is better than the other’s.

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Finance General Uncategorized

Use the Fraud Triangle to understand Business Fraud

is your company vulnerable to business fraudBusiness fraud can do massive damage to a SME, not only financially but also to its reputation. It can be defined as a knowing and wilful act of dishonesty by a perpetrator designed to bring them some benefit, usually financial.
Perpetrators can be customers, suppliers, employees, contractors and, of course, the various email and internet-based attempts to extract money or information, such as its database of customers, from a company by activities generally known as phishing and hacking.

What is the Fraud Triangle?

The Cressey Fraud Triangle was devised by American criminologist Donald Cressey and explained the three factors that need to be present to make a business vulnerable to fraud: Opportunity, Pressure and Rationalisation.
Opportunity is about weaknesses in your business processes that lead a potential fraudster to believe there is a low risk of being caught.
Pressure can come from such things as a financial or emotional source, such as debt, a gambling habit, addictions, or overwhelming bills, or perhaps a sense of injustice in the perpetrator, such as an employee who does not believe they are treated fairly.
Rationalisation is about the perpetrator finding justifications for their fraudulent behaviour such as “just borrowing” money or items for a short time, or that it is acceptable to take money from a big corporation.

Use the Fraud Triangle to protect your SME from business fraud

You can use the Fraud Triangle as a tool to establish whether, and where, your SME may be vulnerable to business fraud and to then establish protocols to minimise the risk.
The elements needed for your business to minimise the risk of business fraud are not only about personal behaviour but also about separating various functions – who is responsible for carrying out various elements of the business process. It is not uncommon in a small business for people to have to multi-task, but wherever possible tasks should be separated and assigned to different people and especially those that relate to money.
For example, having a single person responsible for administration, book keeping, order processing and invoicing, or to have the same person responsible for managing accounts payable and accounts receivable will make your business vulnerable to fraud.
A business fraud protocol is also about defining expectations for excellent record keeping and checking mechanisms and making it clear that should be actually acted upon, not simply written down somewhere.
Once clear guidelines are set about how people are expected to behave and are provided in writing to everyone in the business, you should also require a written signature to ensure they have been read, understood and accepted.
If a fraud is subsequently identified the perpetrator will not be able to rely on the defence that they were not informed that such action was a problem.
You should be alert to any “alarm bells”, such as a change in a person’s behaviour where they have otherwise seemed to be reliable. This can include misplacing files, regularly working late, paying undue attention to a specific customer, never taking holidays or owed time off and refusing help with projects.
You should also have a system of checks in place, this isn’t about reconciling the pennies but monitoring and regularly checking cash payments and receipts, purchase orders, invoices, discounts, credit notes and write-offs, and using ratios to track margins and trends.
Having a business fraud protocol is not enough on its own.  You should also build regular scrutiny of records and transactions into your business processes.

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Business Development & Marketing Cash Flow & Forecasting Finance Turnaround Uncategorized

SMEs, cash flow forecasting and resilience

cash flow forecasting in stormy weatherThe CEO of a business finance provider, Richard Pepler, of Optimum Finance Ltd was recently reported by the publication Business Matters Magazine to have suggested that entrepreneurs should take a business competency test similar to the driving test before being allowed to set up and run a company.
In fairness this was in the context of his stressing that cash flow forecasting and up to date management accounts were essential documents for a business to produce and monitor regularly.
This makes sense given that a recent survey of SMEs by American Express revealed that 46% of “senior decision makers” had reported that cash flow issues were distracting them from focusing on elements of business growth such as product development and marketing.
As my regular readers will know, I, too, emphasise that regular preparation and scrutiny of management accounts and cash management schedules are fundamental to business survival, resilience and business growth.

Why cash flow forecasting and control are more crucial than ever now

The latest Markit/CIPS service purchasing managers’ index for the services sector showed a reading of 53.5 in July, down from 55.1 in June – the slowest rate in three months.  It has reportedly also slowed down in the Eurozone services sector.
This should sound a warning note given that despite the UK decision in June 2016 to leave the EU, the services sector has remained resilient so far when compared to manufacturing, which has been much more volatile.
This year, at a time traditionally called the “silly season” by the media when politicians are on holiday, there appears to have been no let-up in the flood of Brexit-related noise from both sides of the divide.
In just the last few days we have had Mark Carney, Governor of the Bank of England warning that the chances of a “no deal” Brexit are uncomfortably high and Overseas Trade Minister Liam Fox putting the odds of this happening at 60:40.
The pro Brexit side seeks to play down the fears of lorry parks outside Dover, food and medicine shortages etc as absurd, with Sir Bernard Jenkins this week comparing such warnings to the fears over the Millennium Bug that turned out to have been fruitless and Jacob Rees Mogg asserting that the UK would thrive by trading under World Trade Organisation (WTO) rules while the EU would lose out.
With a global trade war in the background as well, is it any wonder that organisations like the FSB (Federation of Small Businesses) and the IoD (Institute of Directors) are complaining about an “information void” that is making contingency planning near-impossible. An IoD survey of 800 business leaders showed fewer than a third had made any Brexit contingency planning because of the uncertainty.
In my view it is precisely at times of extreme uncertainty that SMEs most need to be building their cash reserves and closely monitoring their Management Accounts.  I recommend that holding a surplus of cash offers a safeguard against any unexpected and unwelcome surprises as well as having the resources for what may be some stunning opportunities.
Now, more than ever, businesses need to build resilience into their finances and protect themselves from potential economic storms if they hope to thrive and eventually grow sustainably.

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

Are you undermining your business by ignoring equal pay?

equal pay how far have we progressed since this old suffragette posterDespite years of campaigning and even legislation it seems that many businesses are still ignoring the rights of women to have equal pay for work of equal value.
Tomorrow, April 4, marks the deadline for the UK Government’s legal requirement for businesses and public sector organisations employing more than 250 people to publish their gender pay rates.
As of April 1, approximately 7,000 of the estimated 9,000 businesses and organisations required to do so had complied and the results so far have made depressing reading.
According to the ONS, the median pay gap between men and women revealed so far is 18.4% in favour of men and the mean (average) gap is 17.4%.  The median gap, based on the difference between those employees in the middle of the range, is thought to be more accurate because the mean can be skewed by a small proportion of very highly paid employees.
The Equal Pay Act 1970 prohibited any less favourable treatment between men and women in terms of pay and conditions of employment and was replaced in 2010 by the Equality Act.
Yet it seems that many employers have continued to consistently ignore the law or found ways to circumvent it.
According to the ONS top of the list for ignoring equal pay are in businesses in the Finance and Insurance, Power, Education, Professional and Academic, Manufacturing and Communications sectors.
Perhaps given greater impetus by the #MeToo movement following the revelations of the Harvey Weinstein and other similar scandals, this may be a moment where the situation can no longer be ignored. High profile voices, such as the resignation of the BBC’s China correspondent Carrie Gracie in protest against her own pay disparity compared with male colleagues, have also put the situation under the spotlight.

Equal pay is about respect and valuing employees

Any number of excuses will be put forward for the disparity, such as the effect on career progression of women taking time out for pregnancy or the preponderance of women in relatively low-skilled or part time work.
However, as I have argued many times, crucial to a successful business is showing respect for employees.
There is plenty of evidence that those who feel valued, who are consulted about business developments or who are given opportunities for further training to improve their skills and progress their careers can make all the difference to productivity and to a business achieving its goals.
It makes no sense at all, especially in times of near-full employment, for a business to ignore or undervalue half the potential pool of recruits, i.e. women, who could be available.
Perhaps, 100 years after the birth of the suffragist movement began, we have finally reached a tipping point where there will be some real action on equal pay for work of equal value.

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Business Development & Marketing Finance General Uncategorized

SMEs are you ready for GDPR?

Decoding GDPROnly one in four SMEs have started preparing for the GDPR, the new EU wide data protection rules that will come into force on 25th May 2018, according to recent research by Close Brothers.
The new rules are intended to increase privacy and protection of individuals by reducing the amount of data held about them by businesses and restricting the use of that data to essential use and only permitted use.
The GDPR also makes it easier for someone to find out what data a business holds about them and for them to ask for it to be removed; it actually goes further by requiring businesses to have a specific reason for holding data about a person.
Failure to act and implement the new rules could incur massive fines and damage your business’ reputation.
Many SMEs have assumed they are too small for the rules to apply, but this is untrue.  It applies to any organisation that holds personal information, whether it be data about staff, job applicants, customers, prospective customers, contacts, suppliers or anyone else.
Essentially, SMEs should know what data they hold about people and ensure that they have that person’s consent to control or process it. One major difference between the UK’s Data Protection Act 1998 and new regulation is that businesses need specific permission from the relevant person who must opt in for the different uses of their data. For example it is legitimate to hold data about an order for goods and use that data to fulfil the order and retain essential information for audit purposes but not to use it for future marketing unless that person has specifically opted in to receive future marketing communications.
It goes further in that the opt-in is required for each type of communication. For example someone may opt in to receive newsletters but not other emails or marketing phone calls. Essentially it restricts the unsolicited nature of each form of communication and allows everyone to change their mind by opting out or unsubscribing at any time subsequent to opting in.
In addition to covering the type of data held and its usage, the GDPR also deals with the security of the data held. It requires a business to ensure the data is secure and is protected from “unauthorised or unlawful” processing, accidental loss, damage or destruction.
The opt-in element will have a huge impact on businesses that in the past have used data to market their products or services. In future, recipients of any communications must opt in before receiving the communications. This means them opting in for each and every type of communication, such as e-newsletters, product notices and brochures, discount offers, surveys and telesales calls.
Compliance with the GDPR after 25th May 2018 will be a legal requirement and I understand will be vigorously enforced by the Information Commissioners Office (ICO). I gather the ICO team has been increased four-fold and will be funded by fines for non-compliance. They have produced a helpful 12-steps guide as well as providing regular updates on their website. There is also an information helpline for SMEs on 0303 123 1113, choose option 4.

What about Brexit?

Britain’s exit from the European Union will not affect UK companies’ need to comply with the GDPR. The UK government is currently updating the 1998 Data Protection Act to include all the provisions in the GDPR meaning that it will soon become part of UK law.

Act now to prepare for GDPR

Security of data held should be checked to ensure it is secure and cannot be accessed by unauthorised personnel or stolen by third parties.
You should obtain opt-in permission from all existing contacts and use every form of contact before the 25th May as an opportunity to solicit opt-in since after that date you cannot contact anyone in an unsolicited manner.
An opt-in option and privacy notices should be included on the website where you ask for contact data.
An opt-in option should be included on all direct marketing materials, both online and in print.
Staff should be briefed and trained about the new regulations and the staff induction process updated for all new staff. The staff handbook should also be updated to cover the GDPR.
Review your contracts with any third parties you share data with and review the terms and conditions with customers and suppliers to cover the new regulations.
For businesses with 250 employees or more, there is also a requirement to appoint a data protection officer
There is not long to go before 25th May so businesses need to be focused on obtaining permission from their contacts to contact them in the future and getting their systems and processes up to date as soon as possible.

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

Business review complete? Time to review the marketing plan

Business horizon Marketing planThe next phase of the annual business review and subsequent decisions about plans for the coming year is to review the marketing activities, set objectivities and develop a marketing plan for achieving them.
The marketing review should give a clear indication of whether last year’s objectives were achieved and form the basis for setting new ones.
This is true not only for businesses that are intending to expand either their range of products or services, or to try to grow.  No business can hope to avoid marketing itself altogether.
Marketing is not only about hoping to generate more sales, it is also about keeping the business name in customers’ minds and about demonstrating its expertise and its good reputation in its particular sector or niche.

The components of an effective marketing plan

Accurate and detailed profiles of the target customers and clear goals about what a business wants to achieve are the basic building blocks for a marketing plan.
Marketing tools cover everything from the website to social media and e-newsletters to traditional “old school” advertising, PR and promotion using printed materials such as brochures and flyers.
Even if the bulk of business comes from personal recommendations, it is foolish to assume that ongoing referrals will continue. Maintaining relationships by marketing to referrers, influencers and introducers should be included in you plans and especially if you rely on them for work.
As part of the process there are a number of factors to consider.
The external economic climate, competition from new entrants into its market and technological change, to name but a few are all factors that can all affect a business’ viability and resilience and therefore should influence the goals and how to achieve them.
Past plans and continuing with old marketing practices should be challenged. Is it time to change? A website refresh?  Or more radically is now the time to sell via the website?
If your marketing relies on social media, what worked last year may no longer work. Facebook, Twitter, Pinterest and others online platforms regularly change their requirements. For example, Twitter last year increased the maximum length of Tweets, and Facebook narrowed down the criteria by which a business page could increase its reach to viewers.
If your marketing relies on emails or telesales then new legislation referred to as GDPR may render your database redundant unless you have obtained specific permission from each contact that you may contact them, specifically by sending unsolicited promotion emails or calling them. The deadline for GDPR compliance is 26 May 2018 so your plans ought to include soliciting OPT-IN permission from your contacts. I would advocate that the number of contact OPT-INs is a KPI and a useful way to measure marketing success. It might also be used for setting SMART marketing goals (specific, measurable, achievable, realistic, timely).
Clearly if the business plan for the coming year includes the addition of new products or services these will need to be incorporated into the marketing plan. It goes without saying that research is necessary to identify the customers for the new products. Is there a demand? How will the customers be reached? And many more questions that need answers before developing the plan.
Finally, there needs to be a system of regular monitoring of results against the goals the business has set. I have referred to goals being SMART as reviewing results against goals forms the basis for tweaking plans and developing new ones.
Finally, marketing plans should not be set in tablets of stone.  They need to be responsive to the results they are achieving so that they can be refined or adjusted if needed.

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Business Development & Marketing General Uncategorized

Why should SMEs have a staff handbook?

taff handbookIt is important for employees, and management, to know exactly what is expected of them by way of appropriate behaviour, legally-imposed regulations and any specific company policies.
Businesses are required to oversee compliance by staff of all manner of regulations such as Health and Safety, manual handling, smoking, noise, abuse and discrimination to name just a few.
However, new laws and regulations are constantly being imposed on businesses and others are subject to change. While in the past such policies might have been incorporated into each employee’s contract of employment, the constant changes make updating them almost impossible. Instead contracts of employment can be quite short by referring to a staff handbook that can be kept up to date.
Businesses vary greatly in what they include in the employee handbook, but some can run to some 60 pages.
The essentials that should be in a staff handbook
Essentially, the handbook is combination of quality, management and reference manual. They are particularly useful when inducting new employees or as a reference manual when dealing with grievances and disciplinary matters, or sickness and absence.
Therefore, it makes sense for every business to have a well-structured staff manual, no matter whether it is an SME or a larger company.
Ideally, a staff handbook should be clear with an easy to search index so that it can be used for training purposes and referred to when dealing with problems that may arise.
It should contain company policies on dress codes and behaviour, information about claiming expenses, health & safety, security, personal safety, use of vehicles and driving while on company time, and lots of statutory policies.  It might include instructions for using technology and telephones, while most companies now forbid staff from using phones while driving and some forbid their staff from taking calls on business phones outside working hours.
Others have instructions for operating specific equipment or machinery as might relate to departments, while these can be incorporated into the staff handbook they might instead be appended in working instructions that apply to the relevant department. Either way such instructions should be referred to in contracts of employment and the staff handbook as observing them will be a condition of employment.
Staff handbooks should include reference to policies on equal opportunities, Disciplinary Rules and Procedures, Grievance Procedure and Health and Safety Policy.
While there is no need to include the details of the legislation they should point to where both staff and management can find more information.
There are many other policies, these days, that businesses may also have, such as on drug and alcohol consumption, especially where they expect employees to drive motor vehicles. Email security is also a major area where employee compliance is key including internet security, protecting company systems from unauthorised access and viruses, accessing inappropriate or non-work-related websites, personal use of company computers and telephones or social media. Sickness and absence, parental leave, data protection and whistleblowing are also normally covered.
Again, staff and management need to be familiar with the policies and procedures and know that they exist, and where to go for detailed information.
An up to date staff handbook should be available on staff noticeboards with notice of any changes that might be relevant. These should also be covered during a periodic staff review and every now and then an updated staff handbook should be issued to all staff.
It might need to be longer than 60 pages but, however long, every company that employs staff needs a staff handbook.

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Business Development & Marketing Cash Flow & Forecasting Finance General Uncategorized

BCC Annual Conference 2017 to ponder the future for UK business

Breaking the wall K2 Partners Business Blog

The pre-Brexit challenges facing UK SMEs, which predominantly focused on uncertainty about their future, have been compounded by further uncertainty about their future once the country has left the EU.
No business is happy with uncertainty when it needs to make decisions about investment, growth and employment. But that, unfortunately, is the current situation and likely to remain so for some time yet.
Businesses face the challenge of making decisions about where their future markets are likely to be and whether they should invest in growth or not. Another worry is not knowing what the terms of any deals might be in the future and how this might affect arrangements already made.
So, at the moment, many UK businesses are stuck in a spiral of genteel decline; they are making profits but not investing in their future, neither in people nor in equipment, new markets nor product development.
Already, employers are struggling to recruit the people they need, according to a survey of 1000 employers, released last week by the Chartered Institute of Personnel Development and the Adecco Group. The numbers of EU nationals coming into the country to work has been slowing and employers fear that some existing EU employees are considering returning to their home countries or working elsewhere.  Manufacturing, healthcare, retail and hospitality have been among the worst hit, the survey found.
Without investment in the latest technology and in research and development the danger is that UK businesses will lose their competitive edge in fields where they are currently leading.

What businesses will want to hear

The British Chambers of Commerce (BCC) annual conference is at the QEII Conference Centre in Westminster on February 28 and there are three topics for debate. These are:

  • Growing Business in the Regions and Nations
  • Brexit: Turning Uncertainty into Opportunity
  • Keeping the UK Competitive – vision 2030

While businesses from SMEs to larger corporates will be keen to hear more on the priorities in the Brexit negotiations, given that the deadline for triggering Article 50 is not until the end of March there is unlikely to be much information on this.
The chronic and long-standing imbalance between London and the rest of the country is also likely to be a significant concern to the BCC membership, who are present in every county throughout the country, and they will want reassurance from BCC National that their concerns will be represented and their voices heard.
Skills shortages, training, and perhaps what will happen about business’ ability to recruit from within the EU and elsewhere may well be high on the wish list as part of the discussion in the final debate of the afternoon on UK competitiveness.

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General Uncategorized

Proactive Health and Safety initiatives can build employee loyalty

health and safety checklistMany SMEs regard Health and Safety (H & S) regulations as a burden and a cost but demonstrating a genuine commitment to best practices can bring huge benefits.
Employees are likely to be more committed to you and your company if you pay attention to any risks that may be involved in their jobs and their working environment.
Furthermore, supporting your staff by offering them training in various aspects of H & S and giving them responsibility for various aspects can boost confidence, which then transfers to their competence and loyalty when doing their jobs.
In factories, the basic elements of a good H & S policy include having available properly maintained eye washing and first aid kits and, increasingly, defibrillators and ensuring people are trained to use them properly.
Ensuring there are safe, and clearly-marked lanes for moving vehicles such a fork lift trucks, training in safe lifting and handling of heavy items are other items on the H & S checklist, along with safe handling and storage of potentially hazardous substances that may be needed for the manufacturing process.
In offices, again, keeping walkways clear and free of trip hazards is important.
H & S (Display Screen Equipment) Regulations 1992 cover aspects of working for long periods at a computer. The guidance is that short, frequent breaks are more satisfactory than occasional, longer breaks: e.g., a 5-10 minute break after 50-60 minutes continuous screen and/or keyboard work is likely to be better than a 15 minute break every 2 hours;
The guidance includes showing people who are deskbound and using computers for most of their working day how to set up their desks properly to minimise back and wrist problems.
Equally a business employing people who regularly work for long periods at a screen must provide eye tests for employees who request them and must pay for basic frames and lenses for spectacles for DSE work if found necessary. Why not be proactive and offer them to staff?
Regularly reviewing and applying H & S best practice can demonstrate concern for employees’ wellbeing and that you value their contribution to the business’ success.
It’s all about being proactive and demonstrating that you genuinely value and care for your staff. They are likely to repay your concern for them with loyalty to you and the business.

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Uncategorized

The 4-Part Single Sentence "Elevator Pitch" That Actually Works

Some are cheesy. Some are crass. Some are crazy.
But very few are compelling and convincing.

Until now…! elevator

You know the type of scenario.
You have only seconds to make that important impression.
And because they invariably ask you in that seemingly polite but disengaged way – because there are so many other people they do it with and vice-versa – you quickly feel uncomfortable because of the way they ask you and their matching facial expression.
Suddenly, before you’ve replied, your subconscious mind is telling you that what you’re about to say about you and your job is functional at best and most probably rather boring.
And their subsequent lack of any follow-up questions confirms their seeming indifference and your self-imposed insecurity.
Damned by your own description!
This self-imposed pressure is understandable, especially when you consider that when someone asks you what you do you have just seconds to grab their attention and, ideally, also their admiration…especially as they hear so many colourless answers to this often cold question.
So, if this situation haunts you and is even hurting your personal and professional brand every time you’re asked, then try this 4-step formula for describing what you do in just ONE sentence:
“At the heart of what I do is to help A who struggle with B to achieve C.”
 
The 4-part formula comprises:

  1. At the heart of…” gives your elevator pitch a more engaging sense of emotion so it has feeling rather than just being functional and factual.
  2. A is your ideal client.
  3. B is their biggest issue.
  4. C is their desired outcome or achievement)

So, for me, this would be something like:
At the heart of what I do is to help young business professionals who struggle with their true confidence skills to communicate compellingly to achieve greater pay increases, promotions and business sales.
But…it’s not just what you say. It’s the way you say it that’s also important.
Practise delivering this sentence into a mirror so you not only know how to adopt the right tone and cadence in your verbal delivery, but also how to adopt the right facial expression and vibe in your non-verbal delivery.
Why?
Because if you say something that sounds good but, facially, you look like you’re confessing to shoplifting, then it undermines your elevator pitch completely.
So, when you do utter your compellingly concise sentence, be positive, be punchy and then be profitable!
I’d love to hear your thoughts and feelings about this topic, as well as any results you get from applying this technique. Please look me up on Facebook, Twitter or LinkedIn. Thanks and enjoy!
You can also post comments on this page and join in the discussion!
Guest blogger: Sean Brickell find out more at https://life-impact.biz/

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Business Development & Marketing Finance General Uncategorized

How to ensure you are recruiting the right people

For a small businesses in particular, recruiting the right employees can be a challenge.
Key elements of recruitment are knowing the sort of person you want and being clear about what you want them to do.
HR and recruitment advisers will all focus on a job description but personal values and other qualities may be far more important since you are often looking for someone who will ‘fit in’. This is key to handing over responsibility when you have done it all yourself up to now.
Finding potential candidates, knowing how to interview them and selecting someone can feel somewhat random as on paper many candidates look fantastic.
But don’t worry about getting it wrong, probation periods and a trial and error approach will eventually find the right person providing you don’t keep anyone who isn’t right.
Despite the above, it is worth taking the time to write an accurate job and person description. It forces you to think about exactly what is required for the role and will provide a checklist throughout the selection and interview stages.
Every job and role description should include the job title and the position in the company, details of the line manager and any other members of staff reporting to them, a summary of the general nature, main purpose, and objectives of the job, a list of the main duties or tasks of the employee, which skills/qualifications are essential and which are desirable, plus any equipment or software requirements and the salary and benefits. The checklist of criteria for candidates should also cover the intangible qualities you are looking for.
Sourcing candidates can be an expensive process if using a recruitment agency. Advertising in local media and dealing with applicants yourself can be much cheaper although more time consuming. There are other alternatives worth considering such as looking through records of past interviewees, advertising in places frequented by your ideal candidate, actively searching profiles and social networking sites and attending suitable events or asking existing staff.
Interviewing can be tricky but the aim should be a positive experience for both interviewer and candidate. A checklist of questions and keeping notes of responses and your impressions will help.
If your selection process has already identified those who have the right skills it’s worth remembering that at interview stage you can focus on the person and how they will fit in.
Only after you have offered someone the job will you really know if they are right so don’t be afraid of choosing the wrong person. You can try again. Whichever process you adopt for recruiting staff, don’t keep on the wrong people, don’t keep on those that don’t ‘fit in’.

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Business Development & Marketing Finance General Uncategorized

Starting a business is no easier for ex-corporate executives

While a business rescue advisor usually enters the picture at the point where a business is struggling often they can trace financial problems back to its early days.
Setting up a business is not easy, even for the formerly successful executive coming out of a big business, and often the advisor will identify structural problems that have been there since the beginning.
For a start-up, a major problem is the number of documents that have to be prepared, checked and approved, from the terms and conditions for clients, suppliers and a website, to the documents like a shareholders agreement, employment contracts and a staff handbook in addition to establishing robust back office with admin, record keeping and accounting systems.
Where the executive may have been able to call on both in-house HR and legal help and will have been backed by ample resources the start-up has no such in-house help. How does a new business owner assess the validity and worth of any advice, especially when he or she has to be careful about the cost of advice?
Then there is the problem of selling the business product or service. Some entrepreneurs are brilliant sales people, who give little thought to systems and accounts, while others are systems or financially oriented but with little experience of business development and selling.
While everyone encourages you to jump, if you are coming out of a big business intending to set up your own company you need to pause, reflect and find out what needs to be done before taking the plunge.
Our next blog will focus on how to find the right advice.

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Business Development & Marketing General Uncategorized

The marketing value of "thank you" in business

We recently heard of a SME owner who sent out a New Year’s greeting card to their customers and suppliers with a hand-written thank you message for their support during the year.
It was a small thing, but thoughtful, personal and hugely appreciated judging by all the positive comments it generated on social media, which turned the courtesy into a great piece of marketing.
We also know of a very successful cosmetic surgeon who wrote a hand-written note as a follow-up to the contacts he made and as a result built a successful business which he attributed to his personal attention in writing letters.
As the economic recovery continues increasing numbers of small traders and SME start-ups are appearing and not all of them are offering something unique, so the competition is heating up.
Despite the pace of change and the digital revolution they will need a way to differentiate themselves from the rest.
Hand written and personal thank you messages could be an effective way of doing this and therefore still have a place in the marketing mix.
Have you tried it and with what results?

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General Uncategorized

Women, the gender pay gap and parenting

It has been calculated that women in full-time employment earn 15.7% less than men.
Indeed, maternity leave and taking time out to bring up children can do serious damage to a woman’s career and lifetime earning potential. However, is it realistic for women to expect to go back into work at the same level as their peers who continued with their careers after a period of child rearing?
And what happens when a woman has sacrificed a high powered job or put her career on hold to rear children if her marriage breaks down? Sadly, divorce court financial settlements in such cases are rarely equitable and often do not take the sacrifices into account.
What advice should we give to our daughters? Share the parenting role more equitably? Avoid taking time out for parenting? Insist on a pre-nuptial agreement?  Start her own business?

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

Can there be morality and ethics in business?

Ever since the Great Recession began in 2008 there has been an understandable focus on the moral and ethical behaviour of banks and other financial institutions – or the lack of it.
However, there has been a wider discussion rumbling along since May, when a conference was held in London on so-called “inclusive capitalism” where discussions touched on the so-called social contract of common values that tacitly exists in the market , whether it is in finance, business or government.
This theme has since been taken up in comment pieces, including Anthony Hilton in the London E Standard, reflecting on the ways in which businesses can treat customers unfairly, without it being obvious, for example instead of a price increase the manufacturers change the shape of a package or reduce its size to sell less for the same price.
His question was whether the responsibility for such behaviour rested with a company’s board of directors, with its CEO or managers, or with regulators to ensure fair dealing.
More recently Lord Digby Jones weighed into the discussion, arguing that the relationship between government, businesses creating wealth and society was broken. He put forward the notion of a business covenant, like the military covenant, that might set out simply and clearly the obligations of a business to its customers and its community, and what business might expect from government as part of the covenant.
Covenants, while not legally binding involve a clear statement of intent as to how the parties should deal with each other.
Despite the caution “caveat emptor” an economy and society can only function effectively when consumers and clients trust the businesses that supply their goods and services.
While consumers also need to take some responsibility for their purchasing and financing decisions, inclusive capitalism relies on there being a level of confidence that customers will be treated in a moral and ethical manner by those institutions, financial and commercial, that supply them.

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Finance General Uncategorized

Knowledge of history may help us avoid making the same mistakes

Empires at outbreak of WW1
Today 100 years ago Britain declared war on Germany.
Alarmingly many of the circumstances that led us to war then are being repeated today.
During the early 1900s the Empires of Austria-Hungary, Russia and Germany could not reach agreement over the Balkans. The Ottoman Empire was shrinking. Alliances between the various countries obliged support in the event of war.
Russian political manoeuvring in the region destabilised the situation. Unrest among the Serbs, Croats and Bosnians led to local militia seeking to establish control.
Demands were made, which when not fully met justified Austria-Hungary declaring war against Serbia on 28 July 1914.
The Russians weren’t prepared to lose their influence so they partially mobilised on the 29th.
The Germans mobilised on the 30th so the Russians responded by fully mobilising.
The Germans declared war against Russia on the 1st August 1914.
On 4th August, Belgium sought neutrality and refused to allow German troops to cross its borders, Germany declared war on Belgium so that day Britain honoured its alliance.
Does any of this resonate with the current situation in Ukraine?