Having a well thought through business strategy is key to keeping ahead of your competition. Adopting cloud computing as part your strategy, can be an important factor in striving for excellence. Cloud computing can enable SME businesses to compete with larger business globally. It can allow both Start-up and established businesses to scale up with ease. This article will demonstrate some of the opportunities that are available to businesses that adopt cloud computing while considering the potential downsides. What is the cloud and where is it? Cloud computing is an Internet-based computing model that provides shared data and computer processing resources typically on a “pay as you go” model. Up front capital costs are replaced with ongoing variable costs. Unlike traditional local IT, capacity can be rapidly scaled up and down with minimal management resources. Cloud computing enables ubiquitous on-demand access via PCs and mobile devices. Cloud services are … [Read more...]
Brexit – What now for SMEs?
The electorate has decided that the UK should leave the EU. How best can SMEs respond to the coming changes? Whether you are pleased with the outcome or dismayed is irrelevant. The decision has been made. What you need to focus on is how best to manage and grow your business in the short to medium term. Long term planning is more difficult as the Brexit option only leads to many uncertainties. The first thing is - Don't Panic. Nothing is ever as good or as bad as it seems. Every triumph always has at least some form of downside, and every disaster (except perhaps illness and death) is never as black as it first appears. There is almost always some benefit to be found, and things are very rarely as bad as they seem initially. As small business owners we are naturally optimistic people. We would not have started and continued to run our businesses if we were not naturally hopeful. Now is the time to start thinking what the opportunities are for you and your business … [Read more...]
Are you making the most of the upsurge in Leasing?
Leasing is powering ahead in the funding marketplace. In 2013 43% of SMEs used leasing as a method of funding new plant and machinery, office equipment and cars, this increased to 51% in 2014. The survey of 3,000 SMEs from Germany, France, UK, Italy, Spain, Netherlands, Poland, and Sweden found that SMEs financed 19% of their total investment via leasing in 2013, more than any individual form of bank lending. This figure showed the popularity of leasing among SMEs, as the leasing penetration rate for businesses of all sizes stood at 12% in 2013. SMEs focused on exporting and growth were found to rely on leasing to a greater extent than other firms. Exporting firms financed 20% of their investment via leasing, as opposed to 18% for non-exporters. Similar results were recorded for growth firms, with almost a quarter (24%) of their investment financed through leasing, significantly more than the 18% of non-growth SMEs. For further details contact: Peter.kelly@hcbusinessadvisors.co.uk … [Read more...]
Deficit reduction or growth – which is the chicken and which is the egg
Small business that get into trouble by over-borrowing, end up making no money, or even worse, making a loss because the cost of borrowing gets to be greater than their profit. Where do they go from there? Growth: you need money and resources for that and if there is none, you have to find it. Deficit reduction: cost reduction is an absolute must for businesses in this position to free up some cash. Restructuring: this is the White Knight option - someone, often a predatory acquirer, comes along who will take on the debt at a lower rate of interest - not many of those around today. Default: for some companies going into Administration is the only option, with a pre-pack to take out the best bits and leave most of the debt behind. Shame for the the creditors, especially the tax man and the small shareholder. So what about the National Debt? Default - think of Greece. Restructuring - think of the ECB and the IMF. Deficit reduction - think of the UK and other realistic national … [Read more...]
Get a grip on your cash flow
Predict and plan: work out in detail when you can expect cash to come in and plan how you will spend it. It will help you to see where you can generate extra cash to fund new projects if you are growing, or even pay off old creditors if you are stressed. While this applies whatever the size of business, it is particularly critical if you are a micro businesses or a small businesses with significant order-to-ship lead times, buying materials and selling products on credit terms, when you will have a significant working capital - cash - requirement to fund the work in process. On this article we'll show you how to put together a cash flow management workbook that will help you to manage your cash, month by month. Start with your order book and prospect list Starting with cash coming in, you'll know your order book, but what about beyond that? This is the hard bit - study your prospect list and write down when you can expect to get new orders from those clients. For this you have to … [Read more...]
Selling into export markets
Occasionally you come a cross a business that reminds you of what it takes to be successful. Here was a export business that was selling process control instrumentation into a well defined global niche market. Selling was done by a UK-based sales engineer who had intimate knowledge of his market place, and with a market-leading technology, the company had been able to price its products to make a handsome profit. Support costs were low and the products were made entirely in the UK. What more could a government want - a tax-paying export-led business that created employment in the UK! Many different ways of selling into export markets However, for most businesses, growing an export business is not going to be quite that straightforward. A product that someone wants; selling it to them; shipping it; getting paid; low aftercare costs; and making a profit - in principle doing business overseas is the same as doing business at home, but it is certainly more complex, and it is the … [Read more...]
Why are small businesses not borrowing from banks?
A recent article in the Daily Mail suggested that small businesses are hoarding cash because they fear overdrafts could be slashed at any moment. However, isn't it more likely to be the issue of personal security - business owners are just not interested in offering personal security for what in many instances are relatively modest sums of money, required on an intermittent and short term basis. What are overdrafts and loans for? You get the impression that the banks are trying to re-establish the principle that overdrafts are essentially for managing cash flow and that loans are for working capital. This distinction was blurred until recently due to the banks' historic attitude to risk that has recently toughened, and the risks and time-scales are different in the two cases. You need a good business plan But, whether it is for an overdraft or a loan, a good business plan is required to present to the bank, but they are not the same plan - they have different objectives and … [Read more...]
What do you do when a customer makes a complaint?
What will you do if your product or service fails to meet your client's expectations and they make a complaint? You certainly don't put it in your desk drawer and hope it will go away - that's a sure way to trash your reputation. And don't hide behind your Terms and Conditions. We've all experienced being given the brush off when we thought we had a legitimate complaint - it makes you think twice about using the same company again. Actually, you get back to them promptly and talk to them about the issue: you promise to try to resolve it within a given time-frame, and try to keep that promise. Your client might still be unhappy with what you supplied, but they'll be happier with you and your company as they will know you have responded to their complaint and their issue is being addressed. Put in a Complaints Handling System And you should do this systematically for every complaint. Faced with this, recently, a client asked me what was meant by a Complaints Handling System that … [Read more...]
Business Improvement Strategy
Imagine a business that was trying to grow, but was making no profit, generating no cash, and not paying its owner-directors a proper salary or dividends. By going over their business, end-to-end, and they found 27 areas where their business could be improved, and by implementing their 27-point plan, within a year they had turned their business around to a PBIT (profit before interest and tax) of 17% of sales. They then tackled their interest payments: with help, they were able to find lower-cost working capital so that they could pursue their plans for growth, and still have enough to pay themselves a decent return. Business improvement should be part of your business strategy There is as lesson to be learned here about thorough and systematic business improvement: no matter whether your business is rocky like theirs, or doing reasonably well, there can be a huge benefit in having business improvement as part of your business strategy. It can help you to: Find new … [Read more...]
Achieve a good price when you sell your business
Its a sad fact that only 8% of small businesses are sold for a decent price. This is not good news if you are relying on selling your business for your pension, or indeed for any other purpose. However, many more businesses would be saleable for fair value if the owners had planned their exit in good time. Exit strategy Will you transfer your business within your family, or do you want to sell it - to an employee, or to an outside purchaser? How much do you want for it? When? Will you stay with it or move on? You'll need to think this through because your exit strategy will determine how you go about positioning your business for its eventual sale. Positioning your business for sale You’ll start with a valuation and you’ll almost certainly find it is well below what you need. So, then you’ll need an analysis of your business to show you what has to be done to achieve your price. This may include: getting your accounts in shape and audited; some growth, not the least to show … [Read more...]
