With Brexit dominating headlines, the importance of having the best leadership team, who will be able to derive and implement strategy to steer a company or organisation through change and uncertainty is of paramount importance. Deal or no deal will have a significant impact on our entire economy which executives and managers will have to address. No deal will certainly not mean no action required, in fact it most certainly will mean the opposite. The outcome may be viewed as providing significant opportunity and or challenge which will impact on all sectors of the economy and all commercial functionality whether it be sales, marketing, engineering, research. manufacturing, logistics, IT, human resources, finance or legal. Uncertainty must be addressed and not be allowed as an excuse for inaction; contingency planning is necessary. We are fortunate in having a fabulous pool of talent, skills and experience in the UK; a significant proportion of which is currently … [Read more...]
Five crucial ways to improve your business productivity
You will probably be familiar with the adage: Productivity = Potential – Interference. Many of us are battling daily with interference of one sort or another, both external and internal. Potential is not always something that is easy to quantify, or to realise. Growing a business, finding a market, and bringing in orders takes time and effort, and often a bit of luck. It’s also likely to take some time, so those frustrating interferences are the key focus if you want fast results. Wages & Productivity Superficial measures do not always show the bigger picture – if two businesses are paying different wages, you cannot assume that the lower payer makes cheaper goods, without knowing their productivity. Obviously, if the higher-paying business is more productive than the lower payer, their output might still be cheaper. Higher productivity gives you the means to take better control of your prices and … [Read more...]
Top 5 Challenges for Fast Growing Companies
If you’ve got a good business idea and the energy to push it forward, it’s not uncommon to achieve 100% year-on-year growth in your first few years of business. However, if your company growth is moving at speed, there are some key challenges you’ll need to get to grips with to keep it from crashing into the barriers. The most important of which is: 1. Decision Making At Speed As you are hit by a rapidly increasing list of questions to answer, it can be tempting to favour making snap decisions from a limited range of choices. On the face of it, it looks like you are moving forward at speed. But quick decision-making may not always get you to your desired result. According to some research in this area by Paul Nutt in his book ‘Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debacles’ business decisions that are taken off the back of looking at just two options can have more than a 50% failure rate. Counter-intuitively as soon as you start to … [Read more...]
Power up your business with a Virtual Non-Executive Director
The benefits of Non-Executive Directors are well understood by many successful business owners. They bring an independent view and additional experience that enable better decisions to be made by the management board. Our Home Counties and London Group Business Advisors have developed a Virtual Non-Executive Director (VNED) service that offers Managing Directors and business owners the same independent view and advice without the complexity of shareholdings, appointing legal directors and director’s service agreements. Every company is different and yet there are many similar and transferable aspects from other industries and markets. Our experts are able to utilise their broad business experience and extensive network of contacts to support companies to achieve their strategic objectives. An independent view that challenges existing or new strategies can substantially enhance the robustness of a company’s direction. Sometimes difficult decisions are required to deal with … [Read more...]
How SMEs can use Cloud Computing to punch above their weight in business
Having a well thought through business strategy is key to keeping ahead of your competition. Adopting cloud computing as part your strategy, can be an important factor in striving for excellence. Cloud computing can enable SME businesses to compete with larger business globally. It can allow both Start-up and established businesses to scale up with ease. This article will demonstrate some of the opportunities that are available to businesses that adopt cloud computing while considering the potential downsides. What is the cloud and where is it? Cloud computing is an Internet-based computing model that provides shared data and computer processing resources typically on a “pay as you go” model. Up front capital costs are replaced with ongoing variable costs. Unlike traditional local IT, capacity can be rapidly scaled up and down with minimal management resources. Cloud computing enables ubiquitous on-demand access via PCs and mobile devices. Cloud services are … [Read more...]
Exit strategy and planning – Getting the most for your company when you decide to sell – Part 3
Part 3: Enabling issues which should be in place before a sale These issues will not necessarily provide a premium valuation, but the absence of them could lead to some discount in the valuation or might hold up a sale. • Shareholders agreement regulating the rights of all shareholders and ensuring that minorities can be included Key staff and directors service contracts ensuring that the management and technical know-how won’t walk out the door as soon as a sale is made Share incentive schemes locking in key personnel Employee contracts, handbook and policies ensuring all employment law and regulatory compliance issues are up to date • Supplier Contracts are in date and valid; beware “change of control clauses” which could very well reduce value or lead to specific warranties • Customer Contracts are in date and valid; beware “change of control clauses” which could very well reduce value or lead to specific warranties IPR, patents, trademarks, copyright, … [Read more...]
Exit strategy and planning – Getting the most for your company when you decide to sell – Part 2
Part 2: Getting to the highest valuation Valuation The valuation of your company is not a science, but is driven by market forces and your ability to present your business as a significant investment opportunity. To some extent this depends upon the buyer, but it also depends upon the wider economic environment, the state of your own market sector, as well as the state of your business. There are a number of principles that can be applied to valuing your business: • Earning Multiples – Normally based on historic and possibly forward projections for earnings, measured before depreciation, interest and tax, but adjusted for “average Directors” drawings. The range for this earning multiple can vary from less than 4 to greater than 10 and is dependent on many factors, some of which are mentioned below. • Net Asset Value – The book value of the company as declared in the balance sheet. In many cases owners may expect to achieve a premium when using this approach to … [Read more...]
Exit strategy and planning – Getting the most for your company when you decide to sell – Part 1
Part 1: Why planning is vital and the route to exit Exit planning is perhaps the most difficult yet most important period in the life cycle of Small Medium Enterprises (SMEs). It is an event that probably only happens once, yet has a profound effect upon the future life, particularly in retirement, of the owners. Research clearly shows that many owner managers fail to achieve full or fair value for their business during the exit process. The key reasons for this failure are: Unrealistic value expectations and timescales Poor preparation within the business prior to the sale Unwillingness to use professional advisors Inadequate resources allied to the exit process Planning for your exit strategy Planning a strategy to maximize the value of your business on sale requires careful advance planning. You should start considering the issues several years before you plan to sell. The actual exit process will take 6 to 12 months and may require varying degrees of … [Read more...]
Beware of the Mile Wide Trap
If your turnover has stalled after a period of rapid growth, you may have fallen into the Mile Wide Trap. Consider the case of Kim (not her real name) who runs a public relations firm. Kim studied marketing at school and went on to work for a big advertising agency where she spent ten years learning a variety of marketing disciplines, from public relations to advertising to direct marketing and social media. Then Kim decided to leave her job to start a public relations firm. Given her depth of experience and connections, she quickly landed tractor giant John Deere as a client, and was asked to handle their regional dealer events. She hired some helpers and her start-up agency quickly began to grow. Kim did a great job with the dealer events, so John Deere asked her to handle their annual sales conference. Again she delivered with style and creativity. Impressed by Kim’s innovative approach to the event, John Deere asked her to handle some of the creative for their next advertising … [Read more...]
Growth Vouchers – A New Scheme Offering Subsidised Advice to SMEs
This new scheme launched by the Government at the end of January is a £30 million fund that will enable qualifying small businesses to access expert business advice through an online Marketplace. Suitably qualified Business Advisors are registered on the Marketplace and you can choose one that is local to you, has the right expertise and has the experience. Growth Vouchers are worth up to £2000 but you will need to match fund this. You can of course spend more if required but the maximum provided by Government will be £2000. The funding is aimed at SMEs obtaining advice in five categories: managing cashflow, late payments, and negotiating finance; developing skills and taking on staff; improving leadership and management; marketing, attracting, and keeping customers; and making the most of digital technology. Vouchers can be obtained through a Government website and will be randomly issued to eligible companies. For further information and to see if you are eligible go … [Read more...]
Yet Another War on 'Red Tape'
David Cameron recently announced that he was going to cut 3000 items of red tape as a way of helping small businesses. For instance out goes that riveting read “Cattle Movement Guidance” – all 640 pages of it! Also 286 pages of hedgerow regulations will disappear! I am not quite sure how that will benefit the majority of companies that operate from an office or in an industrial estate in the heart of some of our cities. He also mentioned that over 600 rules had already been swept away but have small businesses benefited from it? Are they even aware that these rules have gone? But he also said that it would take nearly 2 years to get rid of the rest! A slow motion war indeed. When senior politicians start to talk about the war on red tape, I start to worry. I worry that such a major announcement (it was in all the media including online, print and broadcast) is because the Government is bereft of ideas on how to help small business develop and grow. They always seem to revert to the … [Read more...]
Yet Another War on ‘Red Tape’
David Cameron recently announced that he was going to cut 3000 items of red tape as a way of helping small businesses. For instance out goes that riveting read “Cattle Movement Guidance” – all 640 pages of it! Also 286 pages of hedgerow regulations will disappear! I am not quite sure how that will benefit the majority of companies that operate from an office or in an industrial estate in the heart of some of our cities. He also mentioned that over 600 rules had already been swept away but have small businesses benefited from it? Are they even aware that these rules have gone? But he also said that it would take nearly 2 years to get rid of the rest! A slow motion war indeed. When senior politicians start to talk about the war on red tape, I start to worry. I worry that such a major announcement (it was in all the media including online, print and broadcast) is because the Government is bereft of ideas on how to help small business develop and grow. They always seem to revert to the … [Read more...]
Cross Selling – Enabling Sales, Profit and Customer Loyalty
Cross Selling is the practice of selling additional products or services to existing or new customers. It can be used in conjunction with its close relative Up Selling that encourages the purchase of higher value products or services than originally considered. The benefits of Cross Selling are well proven in larger companies and UK SMEs can also use this strategy with excellent results. Cross Selling is an effective method to increase: Sales Profit margins Customer loyalty If your company designs, manufacturers or sells products, services or solutions to B2B or B2C customers via direct, indirect or digital channels it can benefit from cross selling to drive growth and profit. Cross Selling Nine Point Check List 1. Establish your objectives: Sales, profit margin, customer loyalty etc. 2. Understand what your customers buy from you and what they don’t buy from you and why (sales analysis + Customer Relationship Management information). Do typical customers buy … [Read more...]
Business Agreements – the Shareholders Agreement a must?
All businesses should have a succession plan in place but many do not. But what will happen to the business if anything happens to the owner or if misfortune befalls other shareholders or partners? What would you like to happen? The shares pass to the heirs – would you have the heirs as partners? The shares pass to you – but what of the claims by the heirs? The shares pass to management and/or employees – but what of your heirs if you are the one who died? The business buys back the shares – but where will the funds come from? The business is sold – but most likely with a loss in value. The shares pass to the surviving shareholders/partners, with cash paid to heirs. … [Read more...]
Auto-enrolment staging dates
Auto enrolment is the statutory requirement to have a pension fund for all your employees who must be enrolled automatically unless they specifically request in writing you to be excluded. There are penalties should you as an employer exerts undue influence on their decision making. The cost is extensive administratively as well as financially. … [Read more...]
Entrepreneurs Succeed With Us
Peter Kelly a member of HCBA Co-authored this exciting new business book for SMEs. This book is a highly readable set of principles and actions, which will convert readily into increased performance and profits in your business. Entrepreneurs can sometimes struggle to meet the goals they have set themselves and may need help to create the high performance business of their dreams. The aim of Entrepreneurs Succeed with Us is to help such entrepreneurs get to grips with difficult to identify and resolve business-critical issues and kick-start growth plans to achieve their goals. These may include a successful exit strategy. The book has been written by a team of highly capable professionals who appreciate the pressures of an entrepreneur's day to day and longer term problems. Its content is designed to help them recover from difficult situations by getting to the root causes of their sleepless nights. Entrepreneurs Succeed with Us addresses a range of key issues that face all … [Read more...]
Can a Small Business Afford to Stop and Reflect?
All of us business owners and managers know the value of having an external, objective opinion, don’t we? But we seldom pay attention to it. This is true of professional business advisor, as it is of every business manager out there. All too often we think we are immune in our element, but then we get bought up short by the outside view. There I was the other day happily working full steam ahead knowing my subject, when I’m asked why are you doing that? The activity is unimportant, the effect is. The first reaction is ‘it’s obvious, what an annoying question’. But then you realise as you try to answer it, that the question is actually what is the purpose of doing ‘that ‘and what will you gain from doing it? It becomes more difficult as you try to articulate the justification. You either brush it aside or see the opportunity for an external view. Which would you do? The view from the outside gets many different names or guises, Business Review Sounding board Non … [Read more...]
Fall in the Euro after Eurozone Recession Continues
The euro fell across the board last week after the release of economic growth figures showing that the Eurozone economy had remained in recession for a record sixth consecutive quarter. Andy Scott, premier account manager at foreign currency exchange brokers HiFX, said: “As a collective, the economy of the 17 member countries contracted by 0.2% in the first three months of 2013, following a fall of 0.6% at the end of last year. The euro fell to a six-week low against the dollar, below 1.29, and fell by around 0.75% against the pound. “Most of the individual country figures were worse than expected with France, the euro area’s second-largest economy, back in recession for a second time in the past four years. Italy’s recession continued for a seventh consecutive quarter, contracting by a further 0.5%. Germany narrowly escaped recession with growth of just 0.1%, which was less than expected, with the figures for the end of last year also being revised lower to show a contraction of … [Read more...]
FSB Says That March Freeze Costs UK Small Businesses £174m
More than half (55%) of UK small businesses have been impacted financially by the recent prolonged cold weather, costing them £174m, according to the findings of a new survey from the Federation of Small Businesses. The research showed that around six in 10 small businesses were impacted by the cold snap and that loss of demand (30%) and closures (26%) were the common impacts. Of those who closed or temporarily stopped trading, an average of 2.2 days was lost. Furthermore, around 27% of firms had staff absent for at least one day. The FSB says that, on average, each business lost £1,580. In addition to the effects of the cold snap, one in five businesses also said they had been negatively impacted by the flooding in 2012. Mike Cherry, the FSB’s national policy chairman, said: "We may finally have turned a corner into spring, but it's been a long haul, following the coldest March in 100 years. While a few businesses have managed to take advantage of the weather many have found it … [Read more...]
FSB Says That March Freeze Costs UK Small Businesses £174m
More than half (55%) of UK small businesses have been impacted financially by the recent prolonged cold weather, costing them £174m, according to the findings of a new survey from the Federation of Small Businesses. The research showed that around six in 10 small businesses were impacted by the cold snap and that loss of demand (30%) and closures (26%) were the common impacts. Of those who closed or temporarily stopped trading, an average of 2.2 days was lost. Furthermore, around 27% of firms had staff absent for at least one day. The FSB says that, on average, each business lost £1,580. In addition to the effects of the cold snap, one in five businesses also said they had been negatively impacted by the flooding in 2012. Mike Cherry, the FSB’s national policy chairman, said: "We may finally have turned a corner into spring, but it's been a long haul, following the coldest March in 100 years. While a few businesses have managed to take advantage of the weather many have found … [Read more...]
