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The EU Referendum – businesses want stability

worried businessmanWith just 23 days to go before the UK votes on whether to stay in or leave the EU there is a big question mark over the stability of the UK economy both in the run-up and after the votes are cast.
Certainly stability has been noticeably absent for businesses as the deadline approaches.  Investment and other business decisions have been deferred, UK growth appears to have stalled, particularly in construction, and manufacturing has entered recession.
All this has, of course, to be set in the context of sluggish growth both in the EU and China since the start of 2016, not to mention a volatile commodities market and political instability in many parts of the world.
The arguments from both the Brexit and Remain camps have been more in the nature of predictions than absolute fact, and neither side has put forward any concrete plans for what they will do after June 23.
It should be remembered that the UK at the moment is ranked number 1 as a soft power due to its cultural influence and is “hyperconnected” to the rest of the world given its demographics, where one in eight of its 64 million population was born overseas.

What of the future?

Undoubtedly there will be serious repercussions for the UK economy and for business if the vote is to leave, not least because a vote for Brexit will not resolve the certainty about the outcome whereas a vote for Remain will at least clarify the situation for business.
But it would be a mistake to assume all order will be restored, calm will return and the economy will stabilise even if the outcome is to remain in the EU, especially as it would seem that it will not resolve issue of a Government majority due to the anticipated fall out in the Tory party.
Furthermore, the decision to hold a referendum has itself altered relationships and the balance of power between politicians and arguably altered perceptions of the country with its trading partners and others across the world.
If there is a narrow majority for either leave or remain it is unlikely that the “losers” will accept defeat gracefully.
It is possible that now that the debate has been opened up there will be a push for renegotiation of some of the issues that the UK and other countries object to within the EU regardless of the outcome although it is believed that a vote to remain will weaken the UK’s hand in any future negotiations since we will have already played our only ‘nuclear’ card.
While the issues are played out, the Government is going to find it hard to focus on what needs to be done to restore the economy.
So it will be a while before businesses can expect a return to a level of stability that will give them the confidence to unlock investment and pursue the plans for growth that have been put on hold.
(Image courtesy of Vlado at

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What’s the difference between stress and pressure in business?

stressed businessman 2 Huffington PostAsk a business owner how things are going and they are more than likely to use the words “stress” or “pressure” interchangeably in their response.
But, according to Dr Hendrie Weisinger, Ph.D, a well-known US psychologist who has worked with many leading businesses and professional organisations, there is a significant difference between the two words.
He argues that a stressful situation is one where there are too many demands and not enough resources available to meet them, whether these are time, money or energy.
A pressurised situation is one where the outcome of something depends on an individual’s, or a team’s performance.
Stress can lead to feelings of being overwhelmed, while pressure tends to cause anxiety.
So at this time of year, many in the retail sector are under pressure but if they have got their forecasts right they will have the resources, mainly staff and stock, to cope and meet demand.
However, for the struggling business experiencing cash flow difficulties, the situation is one of stress.  Whatever the causes, a lack of cash or a dramatic decline in orders, the issue is one of survival and how to continue operating without some action.
The problem is that feelings of being overwhelmed can lead to inertia when the last thing that the business owner facing such difficulties should do is nothing.
We will be looking at how to deal with stress, and stressful situations, throughout this month.
(picture courtesy of Huffington Post)

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Why should businesses regularly reinvent themselves?

Businesses often assume their business model will survive for ever.
But the salutary story of the troubles of one of the UK’s four largest grocery chains, Morrisons, demonstrates the drawbacks of a failure to reinvent themselves. The company’s profits halved in 2014.
Chairman Andrew Higginson this week admitted in an interview that the company that started as a market stall more than 100 years ago had lost its way. They were certainly later than the other main supermarkets with their online shopping initiatives.
“Morrisons doesn’t know what it wants to be……one minute it’s trying to be Waitrose, the next minute a discounter. You’ve got to stick with your core principles……” said the company’s former property director, Roger Owen, who retired in 2009.
The lessons, however, apply to many businesses and organisations, not only those in the admittedly challenging grocery sector.
The UK’s libraries have also been in decline, partly as a result of austerity cuts to public sector budgets but also because of the changing requirements of users. Technological innovations like the internet have made it easier to access information online as well as firms like Amazon making it easy to browse for books to buy second hand. Some have reinvented themselves and continued to thrive by adopting a different operating model. New initiatives include: providing access to the internet; courses; paid-for research; organising events; hosting clubs, even book clubs.
There is a lesson here for business. The older you are the easier it is to get set in your ways and to miss the threats of the new young “upstarts” snapping at your heels.
The answer? Yes, keep a close eye on developments in your sector and on the competition, and regularly review your core values, structure and business plan.
But more important, much more important, is to keep an eye on your customers and what they want.

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Pre-election honeymoon period for businesses?

With an election looming it is unlikely that there will be any controversial legislation between now and May that will upset SME voters.
There may, on the other hand, be promises made in party manifestos, though we’re not commenting on whether they will be kept!
The pre-election honeymoon period is, however, a good time for businesses to get their finances and their operations in order.
Personal tax returns should have already been submitted (by 31 January) and firms ought to be ahead of the curve with their RTI (Real Time Information) systems in place (the deadline for SMEs is 6 March). It is also time for SMEs to make sure they have a planning time frame for pensions auto-enrolment as the various deadlines are looming (depending on the number of employees and whether an application for deferral has been agreed).
So this period provides a small breathing space for businesses to do some housekeeping and make sure their affairs are in order before the next onslaught of initiatives from a new government, which may be one that philosophically doesn’t like businesses.
A close look at the monthly management accounts may identify adjustments that can be made to operations that improve efficiency, cut costs or reduce risk. It may also identify scope for reducing debt or building up a war chest for investment. It may identify finance facilities that are due for renewal in the near future that might better be renewed early.
It could also be a good time to assess how well the marketing has been performing and tweak it if necessary.
How will you use this time to create a sharper, more efficient and more competitive business for the next financial year and be ready for whatever the election brings?