No Entrepeneurs Relief for SMEs?

Philip Inman is usually a readable and interesting columnist for the Observer (a relief from the repetitive Brexit obsessed William Keegan) but his latest column is riddled with lazy thinking

His premise is that “entrepreneurs do not innovate”. Ever. He cites “academic studies” no doubt created by those with in depth knowledge and experience of starting enterprises, of course

Aside from the somewhat laughable sweeping statement, he clearly struggles with the meaning of “innovation”. He cites Mariana Mazzucato, who has published some interesting books which shift the credit for “innovation” to government agencies (this is all very Guardian) and makes some reasonable points where we are talking about actual deep scientific breakthroughs but the weakness is that this restricts the term innovation just nothing more than a new basic tangible material product. That is surely outdated

This is a very narrow view of term “innovation”. Are we to dismiss all tech innovation unless it’s a piece of hardware developed in a NASA lab? In fact just about every tech firm is clearly “innovative” because it has to offer something new to compete. Britain is a strong leader in this sector with an extraordinary number of enterprises (I recall it was greater than Germany and France combined) but these are airily dismissed by Philip Inman. Apparently the “entrepreneurs tax relief” is wasted on such enterprises

Again the term “innovation” comes under scrutiny and is it that in the world of Will Hutton/ Inman Guardian corporate economics, this would clearly discount Facebook, Google, Apple and the rest. In fact I recall Mariana Mazzucato was somewhat dismissive of Apples innovation. I suspect long term shareholders in Apple would disagree

And again this comes down to definitions. We can beyond tech and ask whether, as an example, a restaurant chain can be “innovative”. I would say yes. Look at Wagamama for instance. Food is a creative business as are many services and in my old worlds of advertising and music it can be claimed that innovation was essential on a on going basis

He believes that “entrepreneurs relief” has not been proven to stimulate innovation. A somewhat strange claim given that Britain is renowned for being an especially creative economy

The writers of such nonsense really do need to get out and understand the real world and not assume that the only “innovation” is created in some university lab

EU v the City. Who wins?

And the answer in this case?

The City.

Yet again attempts to weaken the City of London’s grip on financial services has been easily defeated. The dire (or perhaps salivating) predictions of those who are somewhat obsessively unwilling to acknowledge any faults within the EU have again proved to be nonsense. And why? Because they believe that ideology trumps business. It doesn’t and hasn’t. Clients demanded that Derivatives Clearing remained in the uk simply because costs and experience are far more valuable than EU wishful thinking.

This is not to say that Brexit benefits have been stacking up across the economy and there are still too many challenges, especially for SMEs and the food sector. But my feeling that the actual differences between being in or out are nothing like as pronounced as some would have led us too expect.

Trump. How? Why?

America can be a very strange country but before we get too smug about our own politics and sneer at the very strangeness of Trump actually again becoming president, we came close to electing Jeremy Corbyn as PM.

The latest case of inflated asset valuations which has resulted in a $350m fine as well as penalties, brings ups three questions

Firstly, how was this allowed to happen? Surely lenders in the US, even the hapless Deutsche Bank, enact at least some due diligence when lending against assets? Isn’t that simply a basic requirement and frankly property is not exactly difficult to evaluate. And it wasn’t just marginal. The size of some properties were seemingly exaggerated by a multiple of three.

Secondly, how could he be so sure to get that he would get away with it? Initially anyway. Usually such nonsense means that the application is thrown out with no recourse and not prospect of future transactions. Surely there were no “incentives” offered?

Lastly, why was this so necessary? Fraudulent applications for anything are nearly always a sign of desperation. We can draw our own conclusions

It is seriously baffling that anyone can take this man seriously but in truth, it’s his other relationships and attitudes which are more disturbing.

Thats politics but on a lighter note, here was his attorneys defence

Trump’s attorneys argued in court that the ex-president didn’t fraudulently overstate the value of his assets, but rather claimed the valuations were accurate based on Trump’s “perspective [as] a creative and visionary real estate developer who sees the potential and value of properties that others do not.”

The question here is, how was it possible to deliver this statement with a straight face?

Online retailers struggling

The number of online-only retailers going bust has soared to a record high as the “pendulum swings back towards bricks-and-mortar retail”. A total of 615 businesses entered insolvency last year, an increase of 13 per cent compared with 2022, when 545 companies collapsed, according to Price Bailey.

It may come as a surprise to some but the High street is fighting back strongly against the online retailers. “Online retail” is now a pretty high risk sector and in my view there are a number of reasons why

Firstly, for many retailer, the numbers simply didn’t add up. Look at the case of Wiggle (which I have blogged about) that collapsed last year with a balance sheet that was pretty catastrophic. A great shame, because I used them frequently (they are still trading) but it was a classic case of inflated expectations

Secondly its the very nature of shopping. As with online food deliveries, it all sounds great in theory but the novelty has worn off. Buying yet another item that doesn’t match expectations or is the wrong specification (as I frequently do) means a trudge to the returning outlet where, in my experience, its service with a scowl. We are also social animals. Shopping and simply being out and about, is a leisure activity for many and whilst some may sneer, is it really any less intellectually rewarding than watching the match?

And then there is the old fashioned value of customer service. Im an avid reader and whilst I but many books online through Blackwells, I certainly relish the atmosphere of bookshops and the pleasure of browsing. Something that certainly isn’t replicated by a kindle download

Humans can be a little unpredictable and also many of those ingrained in technology perhaps do not have the people skills to understand what motivates much of the outside world (i’m putting this politely) whilst too many investors have been overly impressed by the latest 20 something with “an idea” which in reality is as appealing as his acne and dress sense.

Trends are very interesting and often counter intuitive. Maybe this was all signalled by the remarkable rise of Rough Trade and many other vinyl retailers. Who predicted that, but also the clues may have already been there

Who were the corrupt IPs?

The story is behind the Times paywall but in essence

“Government staff have been sacked for allegedly sharing details of potential jobs with private sector insolvency practitioners.

The government’s Insolvency Service said three people had been dismissed “following an investigation into case data being improperly shared with two insolvency practitioners”.

Not too surprising perhaps. I dont work closely with the IP sector but i’m still curious about the identity of the two firms who were clearly offering “incentives” to the government staff.

Im sure a few names will be banded about but also i’m sure that many will also know who these people are

It would be nice to know…

Jack of all trades or specialist?

Last week I engaged with a long term contact of mine and also received a notification from another

The first specialises in negotiating Personal Guarantees. I had a case for him and his advice was excellent. This is largely because this is more or less all he does. His market knowledge was invaluable

The second is someone i’ve know a while and it very engaging and pleasant. They have now set themselves up as a broker specialising in the following

Invoice Finance & Factoring: Asset, Equipment & Motor Finance: Working Capital & Business loans: Bridging & Short-term loans; Buy to let, HMO & Investor Mortgages; Commercial Mortgages and Property Development Finance.

And in “touch with over 300 lenders”

I specialise in asset finance and business loans and have recently outsourced Commercial mortgages simply because I do not know that market well enough and yet I do know and excellent specialist. I also outsource to an excellent regulated mortgage specialist and even credit insurance, which is a market I know quite well but I do not deal with daily.

The Debtor finance market alone is a near enough full time task to keep up to date with. I love the challenge and complexity of the product but also owe it to my clients to off er the very best service

You can see what i’m saying here