Writer’s block…

OK it has finally happened to me. The deadline is fast approaching. I’m stuck! What the hell am I going to write about this week?

Quick, check the news to see what might affect small businesses, the driver of Britain’s, indeed the world's future growth according to the Prime Minister. Oh and my client base. Uprisings in the Middle East? Hmm. Good for them. Maybe. Clearly not good for oil and food prices, which will stoke inflation even more, which may put pressure on wages, which will cause interest rates to rise, which will deflate house prices, which will probably cause a dive in confidence and double dip recession…..

No don’t go there. Too depressing. Let’s be optimistic. That’s what is going to get us out of this mess. Too many people are talking the economy down. The uprisings will probably sort themselves out and oil prices will fall back. Life will pretty much go on as before. Well for those of us in Britain maybe. Possibly not for those people living in Egypt. Or Bahrain. Or Libya. Or……..

Maybe I can write about some Client activity? (Please note. Capital letter for Client. Very Important People) For many of my Clients it is budget time. That means updating business plans and strategies in the light of current economic conditions. An opportunity to look at strengths, weaknesses, opportunities and threats. A chance to dream about what might be possible, and then turn it into something that is. 

Can we still grow in the current market? Come on, we’ve only got 5% or so of the market. If we can grab another 1% that’s 20% growth. Surely if we know our market and clients, and do the right things properly we can achieve that, regardless of what is happening in the Middle East. Or elsewhere for that matter. Reason to be cheerful – part one.

(Perhaps we might feel confident enough to take somebody on. Perhaps one of those thousands of public sector employees that will become available in the coming months. Although if we do we will clearly be in the minority …)

How about some of the people I have read about or listened to recently. People like entrepreneur Victoria Wills who had a dream, pursued it, made it happen and lived to tell the tale in an amusing and witty fashion. It is hard not to be inspired when hearing her story.

Finding time to attend such events is one of the major benefits of being a freelancer. Sadly too many employed people never get the opportunity to do so even though the benefits in terms of inspiration and confidence to go out and just do it could be immense.

But back to the point. How am I going to get through this writer’s block? Where am I going to get my 450 words from……?

Keep your enemies closer…..

Martin is a banker. And yet I like him very much. In a world where cabinet ministers indulge in cheap jokes designed to inflame anti-banker feelings, this probably comes across as a bold, even brave statement. But one I think that has to be made if we are to get back to a more normal level of bank finance for small and medium sized businesses.

Of course Martin is not one of those megabucks merchant bankers whose bonuses  set the world (or at least Robert Peston) frothing with righteous indignation. He is an ordinary bank manager doing his best to do his job which is to provide finance and services to businesses at an acceptable profit. He and I spoke recently about how he believed that business can work with their relationship managers to improve their chances of getting the finance they need to develop their businesses.

Having a strong, honest and positive relationship with your bank he maintains is crucial.  Relationship managers should be seen as trusted advisors who can become advocates for your business. They should be able to give you an honest assessment of what the bank is looking for, what risks it will perceive in your business and what tools the credit team use to decide whether to provide finance or not. They will explain what risk weighted assets are and why they matter, why structured finance is almost certainly the way forward and why cash forecasts are much more important than profit forecasts. By working with them in this way, you will put them in the best possible position to argue your case within the bank.

I can hear the catcalls already. Yes he would say that wouldn’t he. In the end the banks won’t lend whatever you do. The terms and conditions will be too strict. It is easy to be cynical but surely it makes sense to at least understand the rules of the game and give yourself the best chance of being successful, doesn’t it?

Banking is a simple business really. You lend money to a business that then pays it back with interest. And Martin would be the first to point out that this simplicity was something that banks clearly forgot about during the almost surreal atmosphere of the mid-noughties, where boom and bust had been abolished, and a brave new world of gravity defying economic paradigms was being heralded. Banks are still feeling their way post Lehman Brothers, and to me it makes sense to work with them to get them back on course. 

OK maybe love your banker is still a step too far for some people. But even if you still want to see them as your enemy the old maxim of keeping them closer still applies. As Martin says when the customer, finance director or accountant and bank work closely and effectively together, it can be a formidable force. If “we are all in this together” has a hollow ring about it nowadays, then think of it as getting out of it together. It is likely to be the only way……

The future is bright, the future is risky…..

Last week’s media was full of a survey that 20% of the working population fear for their jobs. This was naturally presented as a problem and another probable sign of imminent double dip recession.

Actually I want to turn this around. 80% of people in jobs obviously feel secure then. They believe that they are likely to remain in employment. In how many other countries of the world does this percentage of the working population have the luxury of knowing where their next paycheck is coming from? As you can see statistics can be used to make any point you want.

Naturally the figures above only tell part of the story. A number of people in employment obviously do feel insecure. However there is another group of people who know what insecure really means – people who are self-employed and/or running their own business. These have increased rapidly in number over the past few years as traditional employment routes become harder for many to follow.

A pattern is emerging. Things are changing. The old rules don’t apply anymore. Risk is becoming an increasing factor in people’s lives, even those who don’t seek it. This a complete reversal of the post war political and economic consensus (as I look at it that looks such an outdated term – for those that are not sure which war I mean it is the second world war). Uncertainty is back.

I can personally identify with this. Having gone down the freelance route I know that there is a big mental adjustment to make once that monthly salary no longer hits the bank account with metronomic regularity.   You have good times. You have not so good times. You deal with it and manage it. You learn to be flexible and organise your life and finances accordingly. Same as if you run your own business.

Young people are certainly learning this lesson. Get a degree and get a good job? End up with a large debt and no job at all more like. Job security? What’s that? Pensions? Don’t make me laugh. More and more of them are rejecting the secure employment lifestyle (assuming that they can find it) that their parents aspired to. They know that in order to survive in the future a new attitude is required. 

Post war British government has been based around de-risking life by introducing a wealth of social and employment protections. However life isn’t like that anymore. Risk is something that has to be recognised, embraced even, and managed. The next generation is starting to learn and adapt to this. And this ultimately has to be good for Enterprise Britain.

Rounding up….

Like most bloggers most of my content is driven from what is happening around me, particularly from news items that catch my eye. Occasionally, like London buses no doubt used to do, a number of stories all come at once, so this week I thought I would do a little of what we accountants like to call “rounding up” and highlight a few in one hit.       

All aboard…

Apparently train passenger numbers are at their highest level for 90 years. OK I guess that is not news to those of you who cram into choc full trains every day. But it is nice to know that there are businesses out there that can treat their customers badly, charge them the earth for it, and still be successful. Of course government cuts (remember everything is the fault of government cuts at the moment) mean that 2^nd class is likely to become even more overcrowded, as civil servants are forced to slum down from first. It’s enough to make you use your car again if only you could afford the petrol.…..

A nation of shoplifters…

Meanwhile more than a quarter of the shoplifters arrested in Japan last year were over 65. According to the police pensioner crime is at an all-time high. It couldn’t possibly happen here of course. Or could it? A recent article by Ruth Sunderland has once again highlighted the pensions crises that has yet to really bite. Maybe in years to come Chief Constables all over the UK will be calling on the public to support them in their fight against the grey crime epidemic. Future Napoleons (or more correctly Adam Smiths) will need to revise their opinion of the British.....

Little Brown Envelopes…..

Amid the claims that a bonfire of red tape is imminent, a new regulatory headache is about to hit Enterprise Britain in the guise of The Bribery Act 2010. Inevitably the legal profession is rushing to point out the problems that this legislation could create, warning that even businesses that procure tickets to exclusive events and ply guests with fine food and drink could be at risk. Oh well at least I won’t have to fret about why nobody invites me to Wimbledon any more ......

A cure for your bad news phobia…..

And finally did you know that Anatidaephobia is the irrational fear that you are being watched by a duck? Now that you do you can impart that piece of useful knowledge to all of your friends and contacts to take their minds off of the wealth of gloomy economic news that seems to be everywhere at the moment. Well we are here to help you honest….