Banks, Lenders & Investors Cash Flow & Forecasting Finance General Rescue, Restructuring & Recovery Turnaround

Businesses continue to lack confidence

worried businessmanProductivity is not improving, the global economy is still flat and it is no surprise that UK businesses, particularly SMEs, should be uncertain in the future.
The situation has been compounded by the government’s announcing a referendum on whether the country should remain in the EU or leave. This, too, has added to the uncertainty. We will look at specific Brexit issues in coming blogs.
However, the question is whether the uncertainty will diminish with the outcome of the Brexit or not vote on June 23.
Or is there something more going on here?

Have we lost the ability to make decisions?

Businesses can’t just sit and wait, they have to get on with things and risk being wrong.
But arguably the rise in the level of uncertainty has contributed to a lack of confidence and an inability to make decisions.
Is it because there is an increased desire to make decisions that are 100% right?  Why should this be?
It’s not helped by the fact that banks are paralysed by their inability to support small businesses.  They, too, have become risk averse.
Also we are daily bombarded by statistics about the state of the economy, of the world, of just about everything and this can build up a picture that adds to the level of uncertainty, where doing nothing becomes the default position.
Perhaps also the rise of the “blame” and litigation culture plays a part. If something goes wrong we want to blame someone and therefore increased the fear of making a wrong decision.
So lack of confidence and putting off decisions are not necessarily only about the uncertainty over the outcome of the EU referendum.
It may be that British people have lost their edge when it comes to having the guts about enterprise. Perhaps we need to re-learn the art of making a decision in an uncertain world.
(Image courtesy of Vlado at

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Should SMEs ignore the doom mongers?

Many small business owners will be members of their local Chambers of Commerce, perhaps the FSB (Federation of Small Businesses) and their own trade bodies.
Some will also keep a close eye on the business and economic news in the business media. But what kinds of messages do they get from all this?
As they say, “bad news sells”. There has been a fair amount of doom and gloom in the headlines. The Prime Minister’s warnings of the threat of EU stagnation to the UK economy and a new CBI survey reporting that optimism in the service sector is at its lowest for 21 months are two recent examples.
Arguably, most SMEs will be keeping an eye on their cash flow, management accounts, orders and profits as part of the daily tasks of running a business. So they will know how their own businesses are performing.
But how much notice should they take of the UK economy?
It is difficult enough to plan ahead and especially when considering investment in growth. It is even more difficult in times of economic uncertainty or volatility.
There is some evidence that reports of diminishing confidence actually become a self fulfilling prophecy that actually affects business activity.
So should SMEs just grow a thick skin, ignore it all and carry on regardless?

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

Unbalanced recovery – surprise, surprise


Over the past few weeks there have been a number of profit warnings from high profile companies, including Serco, Pearson, RBS, Debenhams and Morrisons, mainly based on their sales in the last quarter of 2013.

Subsequently the Governor of the Bank of England, Mark Carney, said that the so-called economic recovery was “neither balanced nor sustainable”.

Then last week Chancellor George Osborne, speaking to business leaders in Hong Kong, referred to the economy as being “not secure” and “unbalanced”.

Prior to these developments the overall message coming from Government was far more positive with unemployment falling faster than expected and predictions that the economic recovery would consolidate throughout 2014.

There had been plenty of voices warning that the recovery was far too dependent on consumer-led spending and the property market but they went unheeded.

What has changed?

Now it seems the ONS figures due to be released next week are expected to reinforce this latest message of an unbalanced and fragile recovery too reliant on consumer spending.

Could it be that we are being prepared for an unpalatable budget which the Chancellor is due to deliver in three weeks’ time? 

The message for SMEs remains that caution is warranted, close attention to cash flow is still in order and ever greater efforts to grow are needed.

As an SME owner are you more confident than you were a year ago  – or less?