Archive for October, 2013

Unhappy landlords


A rather inflammatory set of statements form the landlord’s association. Lots of talk of “small landlords” (under 5′ 5″ perhaps?) and “pensioners” being effectively ripped off by pre pack administrations.

The suggestion is that landlords should seek extra security. Fine. if they can do so then they are clearly at liberty to do so, but the other side of the coin is that it is a market. There are a lot of empty business premises in many parts of the country. I would expect it would be a lot easier for a landlord to dictate terms for a property on Marylebone High street rather than a street full of empty units in Middlesborough say. But even then, should the terms be the same regardless?

The advice from the BPF is frankly a little one paced in my opinion. If Apple are mulling over one of your units whilst also looking at another further up the street, are you going to hammer them with tough terms?

This is where credit management is again so very vital. Of course the chances of Apple entering a pre-pack are tiny but naturally enough there are plenty of retailers struggling

It is not impossible to find out who is who. It is called credit checking

And once again I would emphasise that the vast majority of bad debts are entirely predictable in the filed accounts.

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And world growth?

An interesting article here

In essence, the author is claiming that world growth is being stuttering largely because savings rates are so high and spending relatively low.

A concise and convincing piece

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Good growth or not?

The last quarters growth in the UK was a pretty decent 0.8% but what is fuelling this?

Here is a rather sceptical assessment We would not perhaps expect a Guardian writer to be a cheerleader for Osbourne but is there some substance to her claims that this is being fuelled primarily by credit card spending? It could certainly be the case that after such a long downturn, consumers are simply spending again regardless. The weakness in her argument is that she confirms that the stats have not been confirmed

My view is that rising property prices are the major catalyst for growth. Some might say this is a bubble and its true that the rises in London have been extraordinary but the alternative view is that it is a vote of confidence in future prospects. Against this there is a the drain of inflation caused largely by the fuel prices which will adversely affect much consumer sentiment and as ever in economics, its the sentiment even more than the numbers that really drive the trends.

Thats my theory anyway

It is going to be an interesting year

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Cameron on late payments


He is to announce a “consultation” to “see what can be done”. There is some talk about increased legislation and no doubt there will be some well intended statements to follow. Or maybe there will be hot air to give the impression that something is being done

Have covered this before on here but the key element of any legislation is enforcement. Who is going to do so? It would be a big call for any supplier whether small or large and frankly I find it hard to envisage the government of the day dragging party doners through the courts because they paid someone on 60 rather than 30

One possible option could be to take a look at the average creditor days from filed accounts and possibly take a view on that. But again this would be very open to challenge and you can be sure it would be

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Bain Capital on SMEs

restoring-financing-and-growth-220x207Another interesting piece

SME borrowing rates are considerably higher in Italy Spain and Ireland than in Germany but perhaps more significant was the stagnation in new lending with Ireland suffering a drop of 82% in new facilities. That is frightening

The reason given?

SMEs in Europe are starving for the financing necessary to fuel job creation and economic growth,” commented John Ott, a senior partner at Bain.

He said that one of the main barriers to better and cheaper credit provision was the lack of information about SME creditworthiness.

Vince Cable has suggested that in the UK filing rules for SMEs should be considerably relaxed to “cut red tape”. Much as I respect my local MP, I think he and the government should ponder on the above
The report is here and it is well presented and readable. Plenty to absorb and I will report back to you shortly<a

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SME survey. Some interesting stats

And quotes…

The survey also showed the biggest cause of stress for SMEs is fighting for new business (31pc), closely followed by worries over finances (23pc), such as cash-flow issues, debtors and business planning.

One quarter of business owners and leaders admit that they don’t feel fully in control of their accounts and business finances with 45pc of respondents saying that they have had to defer payments of one kind or another due to cash-flow problems, including failing to pay their staff wages on (12pc).

I have recently been working with a very successful SME in a very difficult sector on these very issues. We have managed to largely turnaround what was a pretty dangerous scenario and with cash under control, the next stage is managing that for expansion. I believe that businesses can get caught between two stools with the owner perhaps looking a little too closely at the sales and their accountant not contributing perhaps the most street wise of advice

But this is  perhaps more surprising

<p>It found that 20pc of the SMEs surveyed have forgotten to invoice for goods or services at least once. Among these, around 12pc said that the job was worth between £5,000 and £10,000, while 6pc have forgotten to invoice for a job worth more than £10,000.

I suppose it does depend on how long the invoice was “forgotten” for but you can be sure that a lot of work and goods are never  charged for

link here

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Whats in a name


Some business names could do with a rethink but I wasn’t aware that there were so many restrictions at companies house

From the ever excellent Real Business magazine

Firms using words like “Authority”, “Group”, “Board,”, “National”, “European” or “International” in their name will no longer have to gain approval from Companies House.

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