Spring forward?

The clocks go forward this weekend, it’s Easter and spring is here…..despite the depressing weather!

I love the time of year when everything starts to grow again after winter, the days get longer and (said with fingers firmly crossed) we start to feel the sun on our faces.  I wonder if the economy will revive itself as spring and summer arrives?

Today sees the release of a report from the Organisation for Economic Co-operation and Development (OECD), stating that Britain should avoid a triple-dip recession and that the global economy is looking more positive in general.  The Office for National Statistics (ONC) reported that the services sector grew by 0.3% month on month and 0.8% when compared against the same month in 2012. 

Peter Jones, of Dragons’ Den fame, must be feeling optimistic as he’s purchased Jessops from the administrator.  He says that he’ll streamline operations, reduce the number of shops and cut overheads.  Well, he’s the expert, but it’s a bit difficult to see how High Street shops can compete against cut price internet retailers in the camera and related technology sector.  Let’s hope he’s right and I’m wrong!  As a camera and photography addict myself I know that little compares with the hands on experience and advice you can get in a shop, so maybe that’s where the secret lies.

As we head – hopefully – towards greater and brighter things, we’ll all need to think about how we do our marketing and what we spend on it.  The question of how much money to dedicate to marketing is something Mr Jones will have firm views on I’m sure, but the average across all industries seems to come out around 4% of revenue (although in technology it can top 10%). 

An end to recession doesn’t necessarily mean an upturn in business.  If you want to be ahead of your competition and make the most of opportunities, think about how you communicate with your existing and potential customers.

Happy Easter!

Third time assessment

I have written twice on the subject of the current Funding for Lending scheme, once to express cynicism and then a softening of that position giving some benefit of the doubt towards the major clearing banks.

I have now noted two pieces of news:

The scheme is reported as being responsible for banks launching competitive mortgage deals aimed at borrowers with small deposits.

The scheme is also reported as being responsible for recent cuts in interest rates on personal loans ranging from between £3,000 to £4,999 for one bank and between £7,500 and £14,999 for another.

So, we have the situation where participating banks are drawing down money against the scheme to fund cheaper mortgages (which I predicted) and personal loans (which I didn’t expect).

What can I suggest for my fellow small business owners who want a small loan to develop their business? If you are a Sole Trader with a good credit record you might be able to get a personal loan - but you had better say it is for a retirement party and not mention it is to try and develop your business so you can employ people on Job Seekers Allowance at the moment.

If you are a small private company – keep whistling!

Posted on behalf of Keith Powell.

Are you free for a meeting?

How many times have you seen a colleague emerging from a meeting rolling their eyes sky-ward and saying “Well….that was a waste of time!”  Most probably you’ve done it yourself!

I used to work for someone whose tolerance of bad meetings was fractionally below zero.  I always knew when it had gone particularly badly, as he’d return with face like thunder, stride purposely towards his office muttering “Couldn’t run a chip shop” under his breath, and slam his office door.  Even if you don’t react in quite the same way, the fact is, meetings can be a waste of time and when you add up the time of all the people in the room, that can be a lot of time and a lot of money!

If you work on your own or in an office with just two or three others, your meetings will be mainly with customers, suppliers, business partners, etc.  I’ve found that even though such meetings are often organised and controlled by someone else, a little preparation can really pay off.

We all know the basic rules of running an effective meeting: circulate an agenda, nominate a chairman, list actions afterwards, blah, blah - it’s not rocket science and is something we probably learnt very early in our working life.  But I’ve been to meetings that have followed these rules to the letter and yet they’re still not successful, which made me ponder why that was.

I wonder if it’s because a lot of meetings don’t actually have an objective.  They may have a sort of catch-all-woolly-reason-for-getting-together, but no one’s defined the exact expectations. 

Let me illustrate what I mean: the marketing and production departments meet to discuss the launch of a new product.  What’s the meeting about?  The launch of the new product….right?  Wrong!  It’s fair to assume that both departments knew they were going to launch a new product (or they should be fired!) so why are they there?  How about marketing of the new product launch?  Well, it’s a start, but still not particularly focused.  However, if the meeting’s purpose is to select the marketing channels and define the key messages for the product launch, everyone has an exact idea of what they need to achieve before they leave the room.

Similarly, if you are meeting a client you will think you know what the meeting is for but do you really have clear objectives and, when they are met do you always stop there?

Unfortunately, however clear your objectives, meetings can become a platform for people to voice their opinions, grievances, successes or just listen to themselves speak for a while!!  A well known IT company used to have a policy of no chairs in meeting rooms, working on the theory that if everyone was standing up the meeting would soon be over.  If you are ‘in charge’, limiting the duration certainly focuses the mind and helps the meeting leader to retain control. 

I always seem to be up against the clock and my betting is that you do too, but perhaps a little time spent thinking about what we want to achieve from a meeting could save us all a lot of time in the long run.  I’ll let you know how I get on….!

If you’ve got tips on running productive meetings (and I’m sure you have) why not share them here?

Funding for lending - the current state of play

Much has been said about this Government initiative and I have been very pessimistic - if not downright cynical – about the likelihood of this being a useful stimulus to small businesses. The headline figures were certainly bearing out my main contention that the most likely beneficiaries are going to be homebuyers with a slight easing of mortgage problems and a number of small business organisations have criticised the initiative for under achieving for small businesses. The problem is that it is tempting to comment on the headline figures and not look too much at the detail.The main reason for this is that it is not only difficult to get at the real figures but it is also a problem looking at a small range of figures over a relatively short period and extrapolating those into an overall view.
Think how long the average period a mortgage or business loan is taken over and then add in the size of the loan parc and you then see how long it is going to be to sort out the problem of lending in general.The figures are so enormous that they become so unreal they are difficult to comprehend. Movements in borrowing or lending are affected by so many factors that are not within the control of the banks, I give just a couple:Someone works for Jessops and loses their job because of the way the market has changed from cameras to smart ‘phones. They had a mortgage but can no longer keep up the payments so their house reverts to the lender. This becomes a bad debt but the house is sold for the value of their debt so it is cleared meaning a reduction in net lending.
Someone wants to burrow £5,000 to fit out a small café and approaches their bank for a loan. An unsecured loan is agreed at 16%. The parents of the café owner hear about this and look at the rate of interest they are getting on their savings and suggest they will lend the money at half the rate of interest.  The loan was available but not taken up.The second example is something that I am coming across much more when talking to start-up businesses so we therefore should be careful when looking at the figures, not just kicking the banks.
At this juncture it might be worth looking at what the main banks themselves say.

Santander

·         Claims to be actively embracing the scheme and is promoting the benefits of it to customers via a national  advertising campaign.

·         Net lending to business increased by more than £3.4bn in the past 12 months. 

·         Currently averaging a 20% increase in lending to British business for each of the past three years.

·         Plans to maintain its expansion in lending to small and mid-sized companies.

RBS Group

·         Says Funding for Lending has led to interest rate cuts of up to 1.7% on loans to small businesses and the removal of arrangement fees, saving customers an average of £4,500 on the cost of a loan.

·         Core business net lending of £160m between July and September. Gross new lending increased 3% for Q3 compared with Q2.

·         Invoice and asset financing of £117m, which is not included in Bank of England figures.

·         A further £800m has been offered to small businesses and is waiting to be drawn down by customers. Claims it is “on track to deliver the full £2.5bn of SME FLS funding by February 2013”.

·         Gross new lending to small and mid-sized companies in the first nine months of £28.6bn.

Barclays

·         Lending to all businesses rose in Q3 from £28.1bn to £28.5bn or 1%.

·         Over the past year lending is four percentage points above the industry average, the bank claims.

·         However, the bank argues that “demand for lending amongst businesses remains well below pre-recession levels with applications decreasing by 25% over the last year”.

Lloyds Banking Group

·         Having drawn £1bn so far, the bank plans to draw down an additional £2bn by the end of 2012.

·         Plans to maintain 4% net lending growth to small and mid-sized businesses.

·         Funding for Lending has enabled the group to provide a 1% discount on interest rates offered to businesses.

·         Was the first bank to draw down funding under the scheme and can draw a total of £20bn by the end of 2013.

·         Lent more than £10bn to small and mid-sized companies in the first nine months of 2012, amounting to net lending growth of 4%. 

Bearing this in mind, I am going to wait a bit longer before I start saying “I told you so!” but I am watching closely!!

Written by Keith Powell, Business Advisor at Colbea. 

One size doesn't fit all

Sad to say, I’m old enough to remember when there was a bit of a craze on women’s clothes that bore the label, “one size fits all”.  Of course, it never did!  Human beings tend to come in all shapes and sizes and being fairly small myself, the “one size fits all” garment looked as if I was wearing a wigwam. 

“Now why is she wittering on about old clothes?”, you’re wondering.  It was Trevor Edwards, Colbea’s trainer and speaker at the next BIG Group Meeting, that made me think of it.  No, he wasn’t wearing a particularly ill-fitting shirt at the time (in fact, he was his normal smart-suited self) but he was talking about how we should treat our customers if we want to make sure our offering is a good fit with their needs and expectations.

Technology has driven a sea change in terms of the level of service businesses are able to provide to their customers.  The collection and analysis of data means we can look at people as individuals rather than ‘en masse’.  If we use that information well, we soon understand that different customers want different things from us.  The pendulum of business has swung from simply supplying goods or services to developing relationships that will facilitate buying behaviour. 

All buying is, in fact, a solution to a problem.  That problem could be a need or a desire and could range in complexity from very simple behaviour (I’ve run out of milk, therefore I buy a pint a milk) to a major decision making process such as buying a house.  Buying helps us to solve a problem or achieve a goal.  Even buying the same product will have different meaning for different buyers.  For example, the middle-aged man who buys a Ford Focus wants an economical family car that’s reliable and has plenty of space – it fulfils his need.  The same car bought by an 18 year old who’s just passed his test may be much more of an aspirational purchase.

Trevor’s going to tackle the subject of customer behaviour in more depth at the BIG Group Meeting on 15 January.  He’ll be looking at communication, buying behaviour, what happens when things go wrong and what you can do to put things right.  You’ll be taught ways of understanding your customer and of designing communications that help you overcome issues and strengthen relationships.

If you’re not already a member of BIG Group, contact Liz Bourne for more information liz.bourne@colbea.co.uk

The Obama Brand

The world woke up this morning to hear that President Obama will serve a second term in the White House.  After what we were led to believe was a close fought campaign, Obama romped home with a comfortable majority.

It got me thinking about the similarities between political campaigning and ordinary straightforward marketing.  Not that anything is ordinary or straightforward in today’s marketing world of course!  A lot has changed in the four years since Obama first took up office; at that time he was well ahead in the use of social media but in 2012 both candidates used every possible method to engage voters….including Facebook, Twitter, et al.  

But what really interested me was the way in which the two presidential candidates ‘lived’ the brands that represented their campaigns.  It raises all sorts of questions about where brands and what we might call ‘public personalities’ start and end.  Could they be one and the same thing?  Do we want them to be?  Think about Richard Branson or the late Steve Jobs.  They’re so synonymous with Virgin and Apple, respectively, that they seem to embody the values of those particular brands.  Branson and Jobs have been nothing but fabulous ambassadors but we can all think of instances where one person has single handedly brought down a brand through careless actions or words.

Is there anything we can learn from this I wonder?  I happen to be a one-man band (well, a one-woman band to be accurate!) so I guess that my ‘brand’ is me.  There is no one else to represent my business; I create the values that underpin it and I promote those values through the way I work.  But I used to work for a multi-national company – in my office alone there were roughly one thousand people.  How can a brand possibly remain strong in the face of such diverse values, personalities and aspirations?

I think the answer lies, at least partly, in defining the brand, championing it at every possibility and being true to the values that it represents.  Actions always impact a brand!  It’s what we do that gives our customers the opportunity to adjust their thinking, positively or negatively.  Our marketing may be spot on but if a disgruntled employee lets loose on Facebook or a senior executive’s rude comments end up in the press, that single action will have substantial repercussions.

The truth is, it’s the opinions of others that build our brand – whether we are aware of it or not.  Now that’s food for thought!

Be safe on the road this winter

Basic maintenance

Engine oil: Use a good quality oil which matches the specifications in your vehicle manual. Check the levels regularly to identify unusually quick usage early, preventing long-term engine problems.

Tyres: Check tyres for worn-out tread, bulges or lacerations. Consult the vehicle manual for the correct tyre pressure and use a reliable gauge to check this. Over-inflated tyres can cause wear around the centre of the tyre, while under-inflation results in wear around the outer edge and poor fuel efficiency.

Servicing: Get the car serviced as regularly as the manufacturer recommends to maintain engine efficiency.

When should I change gear?

“I tend to say that, in a petrol engine, a gear change should be done at 2,000rpm. Diesel cars need to be worked a bit harder, say at 2,500rpm, before moving up a gear.” 

Not sure how to carry out these checks?

Before you set off

Remove excess weight: Unnecessary weight in the boot makes your car work harder and consequently uses more fuel. Remove anything you don’t need for your journey.

Prevent drag: A roof rack or box adds wind resistance, resulting in drag at high speeds on the dual carriageway or the motorway. If the roof rack or box is not being used, take it off.

Leave straight away: Idling wastes fuel – don’t start the engine until you're ready to go.

On the road

Plan for the road ahead: Look at the road ahead, as far as you can see, for any potential or developing hazards and take early action by easing off the gas pedal and braking gently. By slowing down in good time, you’ll lessen wear to your tyres and brakes and conserve fuel.

Easy on the gas: Use of the accelerator pedal, which is very sensitive, should be smooth and gentle. Harsh acceleration

Slow down in gear: Advances in engine and braking technology mean that it is no longer necessary to change down into lower gears to slow down. Release the accelerator in good time to slow down smoothly and prevent unnecessary braking.

Change up gears earlier: Correct manual gear changes when speeding up, rather than labouring in the wrong gear, can have a significant impact on fuel efficiency.

Drive at appropriate speed: Driving faster requires more fuel. In fact, driving at 80mph, apart from being illegal and dangerous, can use as much as 20% more fuel than driving at 70mph. Stick to the limits and considerable fuel savings can be achieved.

Cut unnecessary electricals and air con: Don’t use the fan heater or air conditioning when they’re not needed, as they draw their power from the engine. 

Thanks to Tariq Musaji for this post - Tariq is a member of Colbea's Business Innovation Group, and a Driving Standards Agency-approved driving instructor and managing director of Farrah Driver Training Ltd based in Wickford, Essex.