Cash by Adam Hawkins http://anodizeproductions.com

Articles about boosting cash flow are in every business magazine at the moment.

These articles by the great and the good – or more likely a magazine hack quoting a wide variety of semi-well known business owners – seem to be getting longer and longer. One I saw recently offered 27 ways to ease cashflow and all the suggestions were useful, BUT in essence you only need three rules:

The three basic rules for boosting cashflow:

1. Invoice as soon as possible

1. Have an effective system of credit control

1. Make cashflow management a priority

Within those rules are a multitude of issues that can be addressed to help ease cashflow and indeed actually increase the flow of cash within the business, but unless you are following the basic advice the chances are that all the rest will be wasted.

What’s your favourite cashflow tip?

Do Business Angels provide a genuine opportunity or are they the latest scam?

Small business owners seeking additional funding are having a very hard time in 2010 with the established VC firms only interested in £5m plus deals and most banks having effectively shut the doors on new lending.

Business angels can be a useful source of early stage funding or at a time of significant expansion and while individuals may only invest quite small amounts they will often group together in a syndicate to provide larger sums.

There are advantages to using business angels as they:

• expect to lose a proportion of their investments – indicating they are prepared to take risks

• often conduct only cursory research – preferring to rely on their well honed business instincts

• usually only require relatively few meetings – rather than the ten or more most VC firms seem to need so they are a useful resource well worth cultivating.

However, like all successful sectors the scammers are moving in and small business owners can be particularly vulnerable if they are having difficulties raising funds and like most scams success relies on getting a small sum from a large number of victims.

So if you have any doubts about offers of introductions to investors – especially online for a fee of, say, £99 – take care as it may not be all it appears.

Legitimate business angels and the organisations that represent them are best contacted via a reputable intermediary that will be able to guide you towards those most likely to be sympathetic to your aims.

Don’t get caught up in a scam – raising funds is difficult enough already!

If you’ve had a bad experience dealing with potential investors, let us know – we’d love to hear from you.

Things are looking up by Adam Hawkins http://anodizeproductions.com

Things are looking up for trading with larger companies.

How can smaller business make the most of this trend?

A growing number of Britain’s manufacturers reported buoyant trading conditions over the past three months.

A new survey published by EEF, the manufacturers’ organisation, and BDO Stoy Hayward said that this is on the back of rising demand in overseas and UK markets.

The second quarter EEF/BDO Manufacturing Outlook report indicates that the broad-based recovery, which began at the end of 2009, has gathered pace. Output and order balances hit their highest levels since the survey began 15 years ago.

According to EEF, manufacturing is responsible for 55% of UK exports and its productivity regularly outpaces economic growth. All of this helps the UK maintain its position as the world’s sixth largest manufacturing nation.

How can smaller businesses benefit?

If you have pulled back from selling to manufacturing businesses because of the recession, now is the time to pick up the threads and start prospecting again. However, be prepared for big businesses to expect longer payment terms so either get agreement for faster payments before you start or factor this into your cash flow so that you don’t get caught out.

For more ideas, take a look at some of our case studies about business recovery.

Do you have examples of business picking up? Let us know ….

More money by Adam Hawkins http://anodizeproductions.com

So the recession is officially over.

Hooray!

Now for the really hard part – surviving the post-recession downturn that most pundits expected and most firms are now experiencing.

Strong leadership can make a huge difference to success or failure – never more so than today, so here are some things to consider:

1. Understand the big picture in your industry or sector – be sure of the true position.

2. Adjust sales forecasts to accurately reflect the true circumstances. Review every month.

3. Cashflow must be maintained, but it’s catch 22 because that can take resource away from sales and other vital activity. Deploy your people to be effective TODAY.

4. Target cuts carefully – at waste rather than core activity.

5. Keep an eye on the future – don’t act precipitously. Short term cost savings can result in being under-resourced when the upturn comes. Judgement is crucial.

6. Focus on customers – understand and try to help resolve your customer’s problems.

7. Innovate. If cashflow allows don’t stop all R&D. New products and services will help boost turnover and profit when markets improve.

8. Look for opportunities. Asset values are low and research by McKinsey & Company shows that effective acquisitions during a downturn “created significant value”.

9. Motivate. Make certain that you get staff on your side to retain the best and make sure they don’t leave as soon as the jobs market improves.

10. Action. Don’t be paralysed by fear, focus on your USP and take appropriate action.

Anything you’d like to add ? Leave your comments below ….

Business by Adam Hawkins http://anodizeproductions.com

£836m is to be cut from the Business budget as part of George Osborne’s £6bn attack on the deficit in the UK economy announced today. In practice a proportion will be re-invested but this still results in a net cut of £700m.

The good news is that the much maligned planned increase in NI will now be reversed, but it appears that the Regional Development Agencies will bear the brunt of the cuts and a significant proportion of Lord Mandelson’s last minute grant programme will also be reversed.

In practical terms this probably means the end of grant-aided research or ‘free’ Business Link consultancy in the short term leaving most SMEs to fend for themselves whether expanding or attempting to recover from the recession.

As many pundits predicted the effects of the recession on smaller businesses are only just beginning to become evident as the real effects of recession start to bite – low order books, cancelled contracts and the payment terms circle becoming tighter and tighter as firms of all sizes start to experience cashflow problems.

Well known Cambridge insolvency practitioner Mary Currie-Smith of Begbies Traynor has recently restated her view that far more businesses will go to the wall in 2010 than in 2009 and certainly so far the statistics prove her correct.

The key to avoiding the potentially dire consequences of falling sales and ever decreasing cashflow is to recognise the problem and act swiftly and effectively. Formal insolvency advice may not be required, but taking appropriate advice as early as possible can often save the day – see case study

If on the other hand your business is booming you may still be affected by cuts to grant-aided programmes which in the past have allowed important R&D projects to go ahead despite limited in-house resource. That sort of funding is likely to disappear.

So what can be done to keep your business prosperous – whether that means aggressive expansion or careful and considered survival?

In short the answer remains the same as ever – be sure of your objectives, be certain that in practical terms they are achievable and create a robust business plan to guide you to success. The banks may not be lending at present, but eventually they will have to loosen the purse strings to survive themselves – when they do, be sure your business is still around to benefit.

Do you have a question or a comment about the business budget cuts?

KPMG has warned that a fresh wave of company voluntary arrangements (CVAs) is expected in coming months as the full impact of the recession takes effect.

CVAs allow companies under threat of administration to renegotiate debts with unsecured creditors.

While the number of insolvencies has fallen in recent months, a full economic recovery is often preceded by many businesses struggling with cashflow as they find themselves under increased pressure to restock and repay debt.

Under a CVA business owners and directors reach a compromise arrangement with creditors in order to avoid going into liquidation.

They restructure the financial arrangements and propose a plan to pay off its debts.  This may involve a partial write-off of debt, rescheduling of payments or renegotiation of contracts.

The main difference between a company that negotiates a CVA and one that goes into administration is that the CVA gives stakeholders the opportunity to openly discuss the best compromise for everyone concerned.  Once a company goes into administration creditors have little say in the process and often end up with a lot less than they would from a company that continues to trade.

In the majority of cases these procedures are successful and allow a business to continue trading with minimum disruption, saving jobs and giving creditors the chance to recover debts, albeit over a longer period of time.

The key to success is often in the management of the process during the period immediately before appointing an Insolvency Practitioner, the choice of IP and making sure the business continues trading as near to normal as possible during a period of intense and sometimes stressful activity.

If you’d like to discuss how a CVA might help your company to re-organise while continuing to trade please give me a call.

Leave a comment below – we’d love to hear from you.

Pricing is one of the main issues that keeps a business small and prevents expansion.

Most businesses I work with have a problem with pricing. The smaller the business, the bigger the problem.

Nigel Botterill, owner of the hugely successful “The Best of” franchise as well as several other businesses summed it up beautifully in a talk in Cambridge recently. He described a scenario around a family celebration that involved having 300 irreplaceable photographs and slides scanned and put on a DVD in order to put them in a book. He was told the job would take about 10 days. Nigel asked the audience what they would charge to do that job.

What goes through your head when you are asked for a quote?

Are you worried about overpricing? Do you think its better  to have plenty of work and make just a little profit rather than risk losing the work? What would you charge? How would you approach it?

• Do the sums on a day rate x 10?
• Work out a price per photo and a price per slide?
• Do you have a different way of approaching this pricing issue?

The answers in the room varied from a few hundred pounds to £5k. What do you think?

I’m a great fan of Seth Godin’s blog and he recently posted a comment about people being afraid of buying apples in case they made a mistake and wasted their time or their money.

I come across this all the time with business owners who are so innundated with offers from coaches and consultants with promises ranging from improbably increased profits to all their dreams coming true that they end up doing nothing.

Nothing is not quite the right term.

They end up worrying and working longer hours to try and turn around a business that they have invested in heavily, both emotionally and financially.

However, I know from years of working with business owners that having someone who can negotiate with banks and creditors and get them a better deal can often make all the difference. Most business owners can look at someone else’s business and spot what needs to be done to improve it but they’re often too close to their own trees to see the shape of the forest.

Most of us don’t really worry about buying the wrong sort of apple. If we don’t like one sort we chuck it out and try another variety but choosing someone to help you turn your business around requires a lot more investment in time and money. That’s why we’ve found a source of funding that may mean you don’t have to risk your own money on finding out if we’re any good or not.

If you’d like to try our type of apple give me a call on 01480 830282.

The law, taxes, sales, marketing, finance, HR and health and safety are just some of the areas you need to be aware of, and that’s as well as your own speciality in terms of the products or services you are selling!

In a large corporation you’d have specialists to look after all of these functions but in most SMEs the owners/directors have to wear several hats and often need to find specific information quickly and easily.

In pre-internet days, information was a valuable commodity. The modern type of encyclopaedia first made an appearance in the early 1700’s and until the advent of the www finding information was a time consuming activity, usually involving many reference books that had to be kept updated.

Now that almost any information is freely available via the various search engines, the problem is often finding too much. There are 72 million references to employment law in Google!

You might be one of the hundreds of businesses that employ freelance consultants to look after various specialisms but these are largely driven by your awareness of knowing what needs to be done or the questions that need to be answered.

Very often you just need some basic information to help you to decide whether you should seek specialist advice or whether you can handle a situation yourself. So where do you turn when you want quick, reliable information?

Many professional or membership organisations offer free information services and there are several specialist Business Information Services that can be accessed by subscribers. The leading Business Schools also offer access to their on line information banks through a membership service.

The British Library http://www.bl.uk/collections/business/business.html search facility allows you to find links to the many sources that are listed in their catalogue and of course local Business Link Services have free information services too.

If you find that you are constantly distracted from your main tasks and always looking for information on new projects and ideas, it may be a sign that, in common with many of the most successful entrepreneurs, you have Attention Deficit Disorder! Business coach David Giwerc has made a study of this condition and finds there are many cases where rather than being a disadvantage, it gives an entrepreneur an edge.

Take a look at the chart below & see if you have the typical signs!

Signs of ADD
Distracted, seems to always have something new to think about
Starts several projects at the same time, may not complete any of them
Distorted sense of time. For example, will spend hours playing a video game without realizing how much time has passed.
Visual thinkers
Hyperactive
Hands-on learners

Characteristics of an Entrepreneur
Constantly has new ideas for how to improve the business
Flexible. Approaches problems from several different angles, always ready to change direction if that is what is needed
Immerses him or herself in the job and often does not realize how much time has passed
Visionaries who paint a picture for others
Always on the go
Hands-on managers

We often find that our clients value the way in which a Mercantile consultation can focus on what needs to be done to bring about the desired change, leaving the business owner or entrepreneur free to do what they do best and keep the business running while the changes take place.

Your business may be eligible for a grant that could pay for us to work with you so if this kind of partnership is something you’d like to explore, just give me a call on 01480 830494.

Check out some of our case studies to see what we do.

According to an article in The Director magazine “Business strategy is often conceived in an ivory tower by top executives and then handed down in tablets of stone for middle management to implement. But, because the strategy is not grounded in the reality of the business and lacks “emotional edge”, the rest of the organisation neither believes in it nor engages with it.”

Of course in the real world of SMEs, strategy is often more immediate and more flexible, but creating a credible and practical strategy is important – isn’t it?

It may come as a surprise to learn that according to managers in larger public and private sector organisations

only 19 per cent of corporate strategies achieve their objectives. That’s an 80% failure rate!

We asked business strategist Phil Jones of Excitant Ltd  where he thinks the problem lies:

Phil says: “I find it is in the 3-4 months between strategy being decided and plans being communicated.

This is why: If your organisation is into annual planning cycles and thick business plans, then there is probably a large part of the process devoted to planning how to implement the strategy. In this stage people spend ages developing budgets, detailed plans, action lists, programmes of work, schedules of activity etc.

In the meantime two things have happened. 1) The world has moved on. 2) The people who are to implement and execute the strategy have been working away on the old strategy. Moreover, when they get the new strategy with all its details, they are faced with someone else telling them not only what to do, but how to do it.

Take a look around at examples in your organisation. Are you setting out measures without explaining why?

So often you get, “this is how I want it done”, rather than, “what is the best way to do this?”

In these cases, what is happening is that people are not communicating what they want to achieve. They are communicating the detailed how, but not the what and the why. This assumes that those doing the planning in some way have a greater knowledge of the process than those who are doing it. We all know that is not necessarily true.”

At Mercantile, our clients tend to have a very strong vision, but we know this is often not enough to keep things moving in the right direction. As Phil says, it’s important to involve everyone in the business and to engage hearts as well as minds and answer the question “what’s in it for me?”

We believe the best strategies are holistic – taking account of all aspects of the business – and should involve the views of customers for example as well as that of the sales force. Will your strategy really move the business to where the customer wants it to be? What are the trends? Customers are more powerful now than ever before and if they don’t get what they want from your business, they will quickly find someone who is genuinely listening to their needs and reacting accordingly.

It may sound more time consuming to incorporate ideas from lots of other people but the result will be a more comprehensive and better focussed strategy which will take less time to implement because everyone has an investment in it.

Finally don’t confuse vision and strategy. Your vision of how your business will perform in the future should be unbounded by practical details –

imagination is one of the keystones of entrepreneurship.

Strategy, however, has to be practical to be successful and if you don’t want to join the 80% of failures you have to have enough resources to implement effectively. Do you have the right number of staff? Are they the right calibre? Is there enough space? Do you have access to sufficient cash?

That’s the difference between vision and strategy.

Retain your vision for the future, but plan your strategy for short-term success.

Assess what resources are required and make certain you have time to plug any gaps. As ever, planning is everything – but speed of implementation can be a decisive factor in your success.

Phil Jones is the author of “Communicating Strategy” published by Gower. For more information see: www.excitant.co.uk

If you’d like to discuss how we can help you turn your vision into reality, just give us a call. We have access to grants that may mean your consultation with us will be funded.