Archive for October, 2014

World Business Index

doing_business_2014As regularly reported here. Here are the headlines from the latest edition

But for more detail and an often fascinating insight into each nation, this is the full report

Even better is this database search

Very useful

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Tescos. It gets worse

TescoNow under investigation from the serious fraud office. This certainly has been a horrible year for the fading supermarket giant but who feels any sympathy? They have frequently been regarded as bullies and not too many tears will be shed.

But the focus must also be strongly on their so called auditors, PWC. Equally culpable and many would say equally arrogant. A penalty should be paid

What should that be? In both cases, guilt, if proven should be met with a huge fine but I also believe that any audit firm that is complicit with false accounting designed to mislead the market should quite frankly have its licence suspended.

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target-arrowsAlthough I focus less on credit collections these days, it is a still a core element of my consultancy. In fact I am due to see a new client tomorrow on this very issue.

One debate that crops up every now and again is the use of targets to motivate credit control and collections teams. You may assume that it is the perfect incentive but in truth the issue can be more complex

As so often is the case, there is a very good debate on this issue in the ICM linkedin group here

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Dying Homebase

21102743A quarter of Homebase stores are to close in the next four years. I sincerely hope my local branch is one of them. The “customer service” there is unbelievable. I will not bore you with the stories, but they give Dixons group a good run for the money

The staffing levels did remind me of the old joke…

If all the people in China stood in one line.. They still wouldnt open another counter at the post office

All this did lead me to wonder where Homebase stood in the market. The shopping experience there is invariably miserable so the urge to migrate to online is overwhelming. Supermarkets also dig into the bottom end of their market whereas specialist paint retailers and garden centres with staff who can be found and can string a sentence together, take the upper end

This does bring us back to credit assessment. Before even considering the figures, any underwriter or credit manager would do well to consider the debtors place in the market. Look at recent failures and a pattern emerges

And it is not just me that considers Homebase to be an awful store. They come near to bottom of a Which survey

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Marian Goodman. A beautiful new London Gallery

2014-08-10-gerhard-richter-installation-04-1024x768London is awash with galleries. For art lovers such as myself, we are spoilt for choice and it can be quite a challenge keeping in touch with everything you wish to see. Do we need more? Of course we do and additions such as the stunning new Marian Goodman gallery just off Golden Square in Soho are very welcome indeed

The current exhibition is later works by the great german artist Gerard Richter. You could not ask for a stronger opening.

The gallery is a very large space over two floors. The location is interesting because, somewhat surprisingly, Soho has relatively little gallery space. Similar scale galleries such as the White Cube, Victoria Miro and Gargosian are tucked away in Kings Cross and Bermondsey. Marian Goodman could hardly be more central and convenient

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The hidden benefits of a broker. But do they have these skills?

In the interests of market research I have posed as a potential borrower to a number of brokers, both online or offline. The reactions are interesting to say the least and whilst I will not comment directly on the frightening shortcomings and frankly dubious misrepresentations of some, it is fair to say I have found a couple of brokers ( both in the north of England) who’s approach was first class

So what sets apart a committed professional broker from the rest? Here are a few thoughts

– The broker will ring fence the client and will work for the client and only the client. No returned “favours” or reciprocal arrangements. The client has given the broker his trust and the broker must ring fence the arrangement.

– The broker will make every effort to understand the business. It is essential that a strong interest is taken and the clients business and there is a desire and dare I say, relish to do so

– The broker will within reason, always try to meet the client

– The broker will explore the full market. That is over 40 lenders.

– The broker will understand the debtors. Better still, they will have the knowledge to negotiate on the strength and weaknesses of the debtors. In my opinion, this is vital

– If invoice financing is not the right solution then the broker will say so

– The clients needs are paramount. Also their future plans are crucial. This is not about the here and now but about years down the line

And so on and so forth.

Ultimately you want the best for you and your clients. To put it rather strict and slightly legalistic soundng terms, failure to comply with the above does not deliver the best solution

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China. Where next?

birds-nest-china-pollution-There has been a degree of focus on China in the last couple of weeks. The protests in Hong Kong continue and there has to be a suspicion that the Chinese authorities are looking at this situation with a great deal of unease. On a less elevated level but perhaps just as newsworthy to many, the Brazil Argentina match in Beijing was threatened by heavy smog. Not an ideal advert for the country

Hong Kong is interesting. Although assumed by many to now be very much part of China, culturally it is a very different place. They certainly see themselves as very separate from the “mainland” and this is especially so in business and the rule of law. My direct experience is that there is considerable contempt for the “mainlands” way of doing business

But what of the overall situation in China? This is a very illuminating article

Some interesting points as follows

But, in an economy where debt has exploded to more than 200% of GDP, it is not easy to rein in growth gradually without triggering widespread failure of ambitious investment projects. Even in China, where the government has deep pockets to cushion the fall, one Lehman Brothers-size bankruptcy could trigger a major panic.

And he makes an interesting point about electricity

So where is China’s economy now? Most evidence suggests it has slowed significantly. One striking fact is that annual growth in electricity demand has fallen sharply to below 4% for the first eight months of 2014, a level recorded previously only in the depths of the global financial crisis that erupted in 2008. For most of China’s modernisation drive, electricity consumption has grown faster than output, not slower.

But this is perhaps most significant

As China’s economy grows relative to those of its trading partners, the efficacy of its export-led growth model must inevitably fade. As a corollary, the returns on massive infrastructure investment, much of which is directed toward supporting export growth, must also fade.

A fallout from China would now greatly effect the world economy of course and there has to be great concern that with the official figures seemingly continuously massaged, the risk is higher than imagined

Which brings us back to Hong Kong and Beijing. The populace may well have grudgingly accepted the authoritarian and frankly corrupt leadership in return for increasing prosperity, but when pollution becomes unliveable and there is inpspiration from those that seek true democratic representation, who knows what the next step will be?

Interesting times

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