Tuesday, 29 October 2013

PM: consultation to get SMEs paid on time

I see that Prime Minister David Cameron has made an announcement about a consultation looking at trying to get small businesses paid on time.


This follows research by YouGov that showed that 85% of small businesses had been paid late at least once in the last two years.

Indeed, apparently, small and medium size businesses (SMEs) are owed £30.2bn according to figures from BACS.

Mr Cameron said: “I am clear that more needs to be done. It's not right that suppliers are not getting paid on time for the work they do and the services they provide and I know that late payment can have devastating effects on our small and medium-sized businesses.”

Apparently a Prompt Payment Code came into practice in December 2008 which was supposed to help small suppliers get payment on time.

Well, it’s the first I’ve heard of it. And I can tell you – it didn’t work.

There is also an EU directive that says business-to-business payments should be made within 60 days (30 days too long in my opinion), but this is flaunted by many.

In my experience it is the bigger companies that are the worst. Small businesses and individuals pay quickly – often within a day or two – but larger firms hold out for as long as they can – and longer.

John Allan, national chairman of the Federation of Small Businesses, welcomed the consultation. "Being paid late or given extended terms can severely hamper many small firms. They simply don't have the same cash-flow buffer as large businesses," he added.

Friday, 25 October 2013

SMEs account for nearly half of all UK business turnover

Office figures from the Department of Business, Innovation and Skills reveal that Small and medium size enterprises (SMEs) employ 14.4 million in the UK.

There are 4.9 million businesses in the private sector, almost all of which are SMEs which have a combined turnover of £1.6 trillion of a total for all UK businesses of £3.3 trillion.

Businesses employing fewer than 250 people make up 99% of private sector businesses. Indeed, businesses with fewer than 50 employees account for almost half of all businesses and a third in the private sector.

Well, all power to them (us!).

I think this demonstrates the courage of people to get into business themselves and not simply to rely on others to give them a job.

I see that there is a new £2,000 employment allowance coming in next April that will cut tax on jobs in every company. Businesses will get a discount from their national insurance payments.

Anything that helps small businesses is always welcome.

Wednesday, 16 October 2013

What can small businesses learn from Angela Ahrendts?

Angela Ahrendts has been credited with pulling Burberry up to great success as chief executive. Now she is moving on to Apple, the US technology giant apparently in need of similar medicine.

Ms Ahrendts oversaw the re-statement on Burberry’s image. Prior to her arrival the company had watched as its image slip from top-of-the-range to low-brow fans. Ms Ahrendts steered the company away from that image crisis, in partnership with chief creative officer Christopher Bailey who now takes over as CEO.

Burberry focused on a growing demand for luxury goods in Asia under Ms Ahrendts – a key part of the strategy. The traditional check design has not been lost, but is seen less now on Burberry designs.

While the share price fell on her departure, Burberry reported a 17% rise in revenue to the end of September.

Apple are obviously hoping that Ms Ahrendts will have the same effect on them. Apple's chief executive Tim Cook said: "She shares our values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience."

We certainly could not afford Ms Ahrendts, but what can we small business owners learn from this, if anything?

Maybe we could look at:
·         Our own company’s image – is it in the right place? Does it fit with what we want to achieve?
·         Our markets – could we spy a ‘demand for luxury goods in Asia’ type of market in the same way as Ms Ahrendts?
·         Do we value our ‘check’ too much? Have we got something in our image that we like, but actually isn’t doing us any good?

It’s certainly worth checking.