Our figures may just be beginning to show signs of slow down

As April draws to a close I suspect that for the first time in 2009 we'll be down on this time last year.  The good news is we're out of the first quarter, during which we were up 10%, which means that the least profitable quarter is over and we're still here.  So baring major catastrophe we're not going to lose money this year. But I feel a degree of concern as I study the current figures and compare them to last year.  Is this the beginning of the start of our pain?

The Bank of Essex

This could be interesting.  A local council setting up it's own bank to help SMEs.  I can't help but think they'll find the hoops they have to jump through, in order to actually start lending, too difficult in the end.  But credit where it's due to Essex Council for being prepared to try.  And allocating money where it's mouth is.

Budget and SMEs

As the dust begins to settle on yesterday's Budget and various headlines seek to portray the event in a way that appeals (or gleefully horrifies) their readership, I'm struck by a glaring omission. Whether the budget was an "attack on the rich", the "death knell of a dying government", "a class war divide" or a "trap for the Tories" it doesn't appear to have been much help for SMEs.  True, most SME owners fall well below the £150k threshold for the 50% tax rate or the restrictions on pension tax relief but that's not much to sing about. I suspect that the strategic investment fund for struggling businesses will be eaten up by big biz (who represent 1% of businesses in the UK) and will involve huge amounts of red tape which SMEs have no capacity for. Maybe some of the support for the unemployed will help us employ people we wouldn't otherwise be able to afford, but I'm not hopeful and suspect the potential accusations of exploiting cheap labour (which may be true in some cases) will stifle the scheme as it has in the past. So we carry on as before. We carry on employing 50% of the UK work force. We carry on being the "engine of growth". And we carry on taking the real risks in this economy, without a safety net, and hope in vein that someone notices how important yet unheard we are. 

Business Matters and Local Taxation

On LBC Radio yesterday I had a most enjoyable encounter with Dr David Kuo and James Max. We talked about the budget and offered bits of advice to callers, some details of which can be found on the Business Matters blog.  However one thing sticks in my mind.  During a discussion on business rates David made the point that biz rates are roughly apportioned according to demands on local services.  So a bigger premises would have more need for refuse collection etc and would therefore pay higher rates regardless of turnover .  Whilst this is true in theory, in practice only around 5% of the rates collected is retained by the local authority, with the rest going to central government.  Which to my mind makes it just another form of biz taxation.  A point I wish I'd had the wit to make at the time.  But live radio doesn't allow for retakes.

What do SMEs want from next week's Budget?

I've been asked to go on Business Matters on LBC on Sunday 6-7pm to do an SME surgery (helping SMEs with problems I assume) and to talk about what SMEs' want from the Budget.  Am working on some ideas for businesses like ours but it strikes me that, bar a complete revamp of the taxation system in the UK that removes the role of unpaid tax collector from the portfolio of all biz owners, I'm not sure what the Chancellor could do to make an immediate impact next week.  But am open to ideas......

Day 6 - 'Managing things at distance'

A four day weekend may well have helped us with our warehouse problems.  And it looks like our delivery company has done the decent thing and worked flat out over the period to sort out the issues.  As well they might given that we had to bung a couple of grand at their landlord to get the doors open.  (Who knows when we'll get that back!)  

Longer term it looks like they're going to have to go bust and re-appear as a warehouse management business with a man-and-a-van service tacked on to do local deliveries.  Then we can use a bigger, national provider for our needs without having to manage our own warehouse. 

We looked at this problem in the past.  It seems that the man-and-a-van can make a profit and big national services can.  But anything in between in this market just can't make money.  As ever it's interesting to get a look at other biz sectors and models.  And tempting to think that we could do better than the existing providers.  But so far we've always managed to keep the saner, less egotistical, side of that line.  Just because you think you've got the hang of one business model in one sector doesn't mean you can switch streams and be just as successful.

Day one - 'managing things at a distance' experiment.

I mentioned a few days ago that my biz partner was going away for 2 months.  See below.  Well he left last night and this morning he calls me from New York to say he's just had a call from the guy we sub-contract our warehousing and some of our deliveries to, to say that he's been locked out of his warehouse by his landlord for non-payment of rent.  We've been watching him for a few weeks but had got, what we thought were, some pretty watertight commitments and contingencies.  It's an interesting start to this 'managing at a distance' experiment.

Human Nature - The flaw in the capitalist model.

At the end of the business radio show I was on at the weekend, the presenter asked me the same question he always asks. "Are the markets going to go up or down this week?"  He was surprised when I said I thought they'd go down since things had been on a bit of a rally the week before.  When asked why, I think I said (and the podcast isn't up yet so I can't check) something about human nature taking it's tole.  My logic (which may be more post the event than during as is the way with live radio) was that traders, having pushed the markets up last week, would be feeling nervous that they might have over done it and would be cautious this week as a reaction.

It occurs to me now that this is more true than I realised at the time.  As it happens the markets do appear to have gone down a little this week.  But I'm not claiming any kind of soothsayer status.  (I wish!)  More the realisation that the biggest flaw in our current model is surely ourselves.  If computers, using pure logic (something they're not yet capable of in my opinion as we programme them) had full control of the markets we probably wouldn't be in the current mess as no computer could have been so blind to the over-valuations of the past 5 to 10 years.  As I understand it computers now fly our planes, and do so many tasks that we still kid ourselves humans can do better, because in fact computers make infinitely less mistakes than any human ever could.

It's very easy to get all '2001' or 'I Robot' on this topic.  But the more I think about it the more I can't wait for the advent of AI.  What a treat to have all our mundane tasks done for us (and how many of those are there for your average SME owner?) without having to think about them.  Leaving us to find other things to get our creative heads into........  oh!

Customer Feedback

I thought this was a helpful piece on the topic.

Leadership

It's a funny thing and a terrible cliche.  But the more amenable and flexible I try to be, the more unsettling it seems to be for the people I manage.  The more apparently ruthless and inflexible I get, the calmer they seem to be.  In my view they have an easier life and more control over their environment when I accommodate their needs and allow them to set their own agendas and time frames.  But they seem to find it unsettling.  

It seems to come down to good old fashioned boundaries.  I find it comparatively easy to provide boundaries for my kids but I don't see why I should treat my employees like they're children.  Are they mad or is it me?