Monday, 31 December 2007

Looking forward to 2008?

As tomorrow, 1st January is a UK holiday, I am posting this entry a little early so Happy New Year!

The beginning of a new year is a good time to be thinking about what could be coming and anticipating what it means for the small and medium size business.

First of all just before Christmas we had all that gloom about the expected poor times for retailers but not unexpectedly suddenly the shops filled up just after some big price reductions. You see the UK consumer is getting used to a pattern hold off with your purchases and bingo just see those last minute reductions!

So perhaps there may be a lesson for the retail sectors i.e. don’t panic and slash your prices too early.

The move to buying via the internet also had an effect with another dramatic increase in gift buying on line.

My 2008 tip to ‘e-tailors’ in the UK though is to make sure that you look at your delivery systems especially if you have used the Royal Mail up until now people are going to be wary of doing business with anyone who relies on them. We all have seen the long lines of people trying to find out if their gifts were held up at the parcels depots. Customers will long remember being let down and especially if their kids were missing some of the presents that they were expecting.

Now onto the money, the UK fall out from the sub-prime lending crisis has had an effect on all lending especially to businesses.
I am not joining the recession bandwagon but expect a slowing of the economy as people sit back and take stock, reducing their debts.

The coming year is likely to be one where banks are more cautious. What this means for the small and medium business is the bank will keep a closer eye on your overdraft and borrowing. Requests for increases in overdrafts or additional lending will be looked at more critically so your business plan will need to be bullet proof especially the numbers, (bank mangers will try to break your projections and see if the lending proposal is still viable).

My network of senior people at the banks are telling me that they will be examining their client lists (portfolios in banker speak) and looking out for clients who could be struggling as the lending gets tighter.

The UK Bank Base Rate is I believe likely to drop 3-4 times this year by a quarter of a point each time.

If your business is affected by the housing market then I am predicting a gradual slowing of the market (no big crashes just more sensible pricing of houses resulting in a smaller increase in values). This I believe means that coupled with the introduction of the Home Information Pack (HIP) people are less likely to move as readily as in the last few years. This could mean that they will spend money on improving what they have already so opportunities there then!

The commercial property market is a different matter, there seems to be a lot of empty property available at the moment and the market feel is that the increases in value that have been gained are at risk. In the short term we could even see recent gains wiped out.

Do remember though that property is a longer term investment; so don’t panic.

So what should you be doing this coming year?

1 Examine all costs and overheads trim where you can.

2 Revisit your business plan now and see what effect a slight slowdown would have for your business forecasts. If you haven’t got a business plan then how do you expect to anticipate and be ready for what comes?

3 Examine your business finances if your overdraft is fairly consistently in the red then covert some of it to a commercial loan (it’s safer and cheaper).

4 If you are selling on line make sure that you revisit your delivery carriers

5 Someone’s losses are another one's potential gains look for opportunities resulting from the economic picture.

6 I am being biased here, but get someone in from the outside to look at your business to carry out a business diagnostic many of us don’t charge for that. If any consultancy or mentoring needs are identified see them as an investment not a cost. If the consultant/mentor knows what they are doing they will save you many times what they cost and or increase your profits.

Lastly I am not predicting a recession in the UK just some sensible and timely belt tightening.

Alan Briggs

Dynamic Business Strategies Ltd
Tel: 07917 446068


Good Practice for a Successful Business

This year again I have helped many businesses, some whom were on the road to success and needed help to step up to the next phase of growth, but also a lot that were in trouble.

Of the successful ones that I helped to grow significantly there were a number of elements that were common:

We ensured that they researched their marketplace.
We developed a good USP.
They had been set up with sufficient capital investment at the start and ensured enough finance to fund the growth.
Marketing effort was fully controlled and measured.
We also established good financial and business controls.

Lastly and very importantly they got outside advice and guidance, listened and implemented the suggestions and techniques.

Alan Briggs

Dynamic Business Strategies Ltd

The Counting House
14 Walford Place

Tel: 07917 446068


Friday, 28 December 2007

David & Goliath, or a Case Stranger than Fiction!

Sometimes I am asked to deal with a problem that everyone else has turned down i.e. ‘the lost cause,’ often these are the most satisfying and on the face of it challenging projects.

The strangest one last year was the owners of an ostrich farm based in the heart of a residential commuter area who wanted to build a family home on the site. Sounds reasonable one would think especially as the couple and their children in their twenties had been living in a mobile home on the site for ten years.

The couple had established a farm business which predominately was based on a breeding flock of some 40 female ostriches – they also had incubation and hatching facilities developed in the last few years so that they could sell young ostrich chicks and eggs.

The local Borough Council planning committee had turned down their application for an agricultural workers dwelling earlier that year, despite a Council Officer’s recommendation for approval. Although their agricultural consultant provided additional information – mainly financial and related data during the course of the previous year this did not change the elected Councillors minds, although Officers maintained their recommendation for approval throughout.

There was considerable local opposition to the business from neighbours, including the local Residents Association; it was believed that their representations had strongly influenced Councillors to go against their Officer’s advice. One or two Councillors in particular had been very vocal in their objection to the business – and it was believed to have clouded their judgement in their interpretation of the relevant Government criteria against which the business should be judged in a democratic society.

As the case had been refused a Local Council planning appeal it was now going to a Planning Public Inquiry within the next 6 weeks and they needed to get an argument ready for the planning application appeal and issue evidence to the Inspectorate quickly.

In agricultural dwelling cases there are two tests that the Government requires to be met before an agricultural tied dwelling can be built – the functional and financial tests.

There was no disagreement between the parties that the daily welfare needs of the ostriches meant the functional test was met. Furthermore, the financial test breaks down into a number of component parts as follows:-

“The unit and the agricultural activity concerned must have been established for at least three years” – the Council accept this test was met.

“The business must have been profitable for at least one of these last three years” – the Council accept this test was met.
“That the unit and the agricultural activity are currently financially sound” – again, the Council accept that this was met.

The fourth test is that the business must have a reasonable prospect of remaining so, i.e. profitable/viable/sound.

The stumbling point that was the key to the problem was the fourth test. It was this test that the Council and more especially the objectors did not accept as satisfied, and did not accept on the basis of the information that had been provided, including markets for the ostrich meat etc. that the business is likely to remain viable into the future.
So having met with the couple and their agricultural consultant at the farm I identified that the chair of the residents association happened to own the house next to the farm, also she had a long term happy relationship with the council officers and councillors and had a strong weight of local support.
I recognised that the solution was to the problem was to produce a business viability report to support the application the report needed to be heavily based around undeniable market research that proved a long term growth market for both the ostrich meat and the eggs.

The Council produced no professional evidence or other analysis to show that the market for ostrich products is likely to fail but argued that despite the reasonable past performance a large supermarket had tried to sell ostrich meat as a pilot and it had withdrawn the products due to poor sales.

The report that I produced within a week included an analysis on the likely future prospects for ostrich products within the UK- low fat, high protein, locally grown meats – sold at farmers’ markets and other specialist outlets and proved that the prospects for the business were excellent. Our key argument was that the meat produced should be marketed through what is now a vibrant farmer’s market sector where a large and growingly informed public are making food choices based on health, the environment and the wish to try new things. All of this market information was gathered using the internet.

So what was the result? The public enquiry was held and evidence was heard from the Council, the objectors and the owner’s team.

The chair of the enquiry then arrived at the decision to approve the application allowing the building of the house. The chair spoke a great length about how the decision had been swayed by the viability report’s evidence and the argument about the potential market and the change in public tastes and buying choices.

The lessons here are:

The devil is in the detail, good market research no matter how simply collected is always critical for any business situation.

Remember if you make sure that you have the right ammunition in your slingshot, then you too can fell a giant with a single shot.

Alan Briggs

Dynamic Business Strategies Ltd
Tel: 07917 446068


Thursday, 27 December 2007

Why Don't Businesses Seek Help Until Too Late?

As a business consultant probably 20% of the businesses that I have referred to me are seriously under performing or are in big trouble.

So why is that?

Well a mixture of reasons:

The ostrich syndrome, "its too painful to deal with so I'll ignore it."
The miracle wisher "if we could only get a big order it will all come right."
The change resister, (they ignore what's changing around them), and in any case, "we have always done it this way."
Ignoring the obvious, "I know we should not have reallied on one big customer for 80% of our sales, but we got on so well with them."
Ignorance, "We don't have time to keep monthly management accounts."

Often they only time many of these cases really see any figure is the end of year accounts from their accountant and even then they don't understand them.

But the two biggest reasons these businesses don't get help are:
They are too embarrassed or feel a loss of pride.
Or the old chestnut, "I don't need to pay someone else to come in and tell me what I already know."

Be honest, with yourself, If any of this sound s familiar then get help quickly, often if the businesses that failed got advice earlier on they could have been rescued.

Alan Briggs
Dynamic Business Strategies Ltd
Tel: 07917 446068

Monday, 24 December 2007

Is The Customer King?

For those of us who have been around the business world for more years that we want to admit to, the phrase ‘The Customer is King’ is a familiar cry.

Unfortunately on a daily basis I seem to be falling over suppliers, shops and businesses that have forgotten this vital rule.

My wife tells me that I am the world worst customer, I guess thats true if that means I only give one second chance to get it right to suppliers and shops.

In many cases these are businesses that are quality accredited. They have great systems to register complaints, customer service people by the drove and lots of quality policies and procedures. The trouble is that if all this forgets that at the centre of it all should be one aim,
satisfying the customer, then it’s all just been a paper exercise.

Several things should be remembered:

Customers will often remember and recommend the supplier’s who go the extra mile to put right a mistake or redress a problem quickly and without fuss, (probably more so than the suppliers who have not caused them a problem).

Quality service is not expensive, but lost business and reputation is.

At the end of the day it’s the customer who pays for the wages of everyone they deal with!

Alan Briggs

Dynamic Business Strategies Ltd

The Counting House
14 Walford Place

Tel: 07917 446068


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