Steven Mugglestone

The more I learn, the less I know

Archive for the ‘Helping Business’ Category

Empathy and Experience are perhaps the greatest attributes when choosing a business adviser and accountant:

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The debate continues to go on, what key areas should a business owner look for when choosing an accountant or business adviser and the internet is full of pick me, pick me statements.  Big firm, small firm, qualifications, what the bank/bloke down the pub/internet chat rooms/spouse says or maybe they are just really good guys or girls, or so you think.  At the end of the day, it depends on whether the business owner wants a key and trusted adviser or whether they are happy with a number cruncher spread-sheet bean counter who does not answer back or tells you what you want to hear but will not truly help you grow your business and build and protect your wealth.  If that is the case do not read any further.

Qualifications

It seems basic, and slightly unbelievable, but there still appears to be a debate on whether qualifications are necessary.  We understand that this can be down to cost, fine, if you believe that, the next time you are ill, ask for advice from the bloke in the pub to sort out your heart condition, it is really easy, there is plenty of stuff on the internet to talk you through open heart surgery. There are reasons, however, for qualifications and there are reasons for professional bodies.  The areas of accounts, audit, taxation and business advice are complicated and specialised.  The ICAEW (Chartered Accountants Institute) was granted a royal charter in 1880 by Queen Victoria, in recognition of the importance that the body of accountants were playing in the business world and society. Ignore the history and the grandeur, if you wish, but there are reasons for royal charters and there are reasons for exam standards to be set to be part of such professional organisations.  Many fail such exams, not because of the volume of facts or having no understanding of double entry bookkeeping, but because the final exams ask the candidates to think, analyse and debate key issues and advice (the sort of thing that is relevant to real life and business) and it is these areas that some find too challenging.

A key point about qualifications is that there is a lot of information to understand that underpins accountancy and business, tax legislation, business and corporate law, accounting standards for the UK and across the world and professional advisers need to be able to understand and assess the impact these have on their clients.  The list goes on, but the real key issue is that this is the basic starting point, the foundations of education and knowledge in these key areas.  Another key skill is the ability to consider a large amount of information and understand and explain how that will affect a business.  To try and say it is only exams, a person can just be poor at exams, is fine, but really, would you trust a an unqualified doctor who could not pass exams to carry out your triple heart bypass.

The sole practitioner

Cheap, yes, but what happens when they are away and how on earth can one person provide a range of services and support.  The simple answer is they cannot.  Advice, support, business systems and delivery are built and improved by teams of people across all industries.  Accounting and business advice is the same.  A team, if organised and lead appropriately, will achieve far more together and provide a better service for a portfolio of clients than any sole practitioner.

Small firms

What do you get if you carry on doing the same thing in the same way?   Everyone should know the answer to this as it is you get what you have already got.  This is the key challenge and continuing weakness of many small firms.  They struggle to deal with changes in the modern business world as they do not know any different.  Yes they have good and strong relationships with clients, but sometime lack the breadth of service and experience to provide a comprehensive service, losing out eventually to much bigger firms.  They can provide accounting support as they have done over the last 20 years.  The progression of their own staff is stilted as the next generation of directors and partners are only learning from the older partners with the same attitudes, skills and experiences.

Many small firms do not adequately tackle the services, systems, staff development and general business modernisation and progression that many other businesses do as a matter of course and their futures are suffering, not to mention the service and support to their clients.

The Franchises

Expansion from some firms and sole practitioners has come through franchise models.  This is fair enough, but the reality is that whilst franchises provide an easy ready-made route into business, is that really the type of resource another business needs to provide key business support and advice.  A business “professional” who could not build or create a business themselves and relies on a ready-made support model is putting themselves forward as a business adviser?

Big firms

Systems, processes, standard documentation and support and a wide variety of support and services are there for all to see and these are generally all good.  Big firms, however, are like large public bodies and similar organisations.  Most of the staff do not lead the organisation and have no real input in developing a business.  They are performing the tasks given to them.  Many former big firm professionals recognise how institutionalised they were when part of these firms.  Most directors/partners in such firms also have lost many skills, if they had them in the first place, that most FDs would see as key skills to actually running a business, planning, forecasting, analysing and delivering change.  The very skills that would help most of their clients are not apparent, with the individuals claiming that they provide the best support ever.  The reality is that they bask in the brand image of the business, but lack the key and core business skills themselves to be in business.

It has also been very clear of some of the major mistakes that big firms have been hit with, or have created themselves over the last few years;

  • Poor audit decisions and major law suits;
  • Poor acquisitions resulting in major losses and redundancies;
  • Growth underpinned by selling now disastrous tax products;
  • Poor tax products and planning and closure of those areas, leaving their clients in limbo;
  • “Tampering” with their own accounts to try and show a far better picture;
  • High fees for basic compliance work;
  • Clients leaving to find as good, if not better service at a far lower cost;
  • The realisation of many businesses that having a “name” on their accounts does not provide them with better advice or growth opportunities.

The strong modern independent

We cannot say that we have all of the answers.  We can say, however that we, together with other independent firms around the UK, are building a modern business by mixing the key skills and experience of their partners, bringing together senior people from large and smaller business with others that have actually been part of a commercial organisation facing change, growth, turmoil and sometimes significant turnaround.

Take those skills and experiences and add some significant elements of entrepreneurship and you can seek to address, build and improve the offering and challenges of a modern independent firm of chartered accountants.

  • Branding;
  • Fully understood and embraced client care standards and procedures;
  • Modern social media contact;
  • Improved, documented and understood systems and processes;
  • Advice and client improvement plans considered by a team of professionals;
  • Standardised, professional and branded reports, agendas and documents delivered to clients in a clear and professional manner;
  • Innovative as well as clear, safe and sound tax advice, giving options and choices
  • Treating our own business, as a business and carrying out our advice to others ourselves

The key skills and areas that we know underpin all of this and ones that will prove to be the backbone of our success and these are experience and empathy.

Experience in that we have, together and individually, faced and dealt with many business situations from start-ups through to Plc listings and break-ups, management buy-outs and helping to grow business in between.

Empathy, in that we are the business owners, we understand the risks that other business owners take, as we have taken them; we understand the issues that other business owners face, as we are facing them and we understand what it takes for another business owner to build a robust, strong and growing business with appropriate services, systems and people development as we are building one of those as well.

As we have said, qualifications, brand, people, systems, client care are all vital but experience and empathy will always prove to be the strongest attributes of all.

Steven Mugglestone BA FCA
FD Services
Tell us your story

enquiries@mgch.co.uk

www.mgchayles.co.uk

Leicester                  0116 233 8500
Nottingham            0115 941 5193
Birmingham           0121 236 3317

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Written by Steven Mugglestone

February 19, 2013 at 4:37 pm

Are you ready for the key challenges for 2013, Tell Us Your Story and let us help:

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As a leading Independent firm of Chartered Accountants, we have former Finance Directors working within the accountancy profession, as part of our leading business team.  We believe that professionals with real commercial experience together with being part of the ownership of the business really does provide our clients with key, relevant advice and support and we see as experience and empathy being the two most important attributes to be a really great business adviser.

MGC Hayles is developing a leading business advisory firm within the Midlands. We understand that, aligned with survival, the two biggest challenges facing all businesses in 2013 is growth, with many businesses seeking growth through export together with the availability of finance.

We believe that we are already addressing these key challenges through our contacts within many of the key banking and finance providers, whilst accepting that finance through banks is still very tough, as well as through our private equity contacts and membership of the Growth Investment Network in the East Midlands.  We are keen to develop our support for international trading through the UK200 Group,  which combined with our skills and experience as real finance directors will provide us and our clients with the real and valuable support where it will count.  A key strap line for us is “It all adds up” and we believe that these are the attributes and key areas that will prove that to be true.

Growth through export and new markets

During 2012 the UK economy has already seen key opportunities for expanding business by moving into new markets, namely the BRICs – Brazil, Russia, India and China.  Here are the key reasons

  • Brazil is an economy even bigger than India’s with a substantial middle-class population.  This provides substantial opportunities across many sectors, British business cannot ignore Brazil. The Brazil Effect
  • India has huge demand for Western products and services and these are prevalent among India’s young middle class.  Together with cricket, it is creating a great opportunity for UK business. But the Indian market is very relationship-driven and success can depend on building relationships and partnerships with other businesses.  Leicester is a key route through to business in India, http://www.labauk.org/, and we certainly aim to play our part in supporting this integral part of our local economy.  India cannot be ignored
  • Russia & Eastern Europe has grown and significantly developed since the break-up of the Soviet regime 20 years ago.  Russia’s economy has steadily evolved and yet it accounts for only one per cent of UK imports and one per cent of UK exports.  There is, therefore, plenty of room for growth. Russia is the fastest growing export market
  • China and Anglo-Chinese relations are at a high and the City of London will be first city outside Hong Kong and mainland China to trade the RMB. This will provide event more opportunities for UK business in China, but UK businesses will need to develop the best strategies to exploit this complex and diverse region. China is the great economic success story

Raising Finance to grow your business

Obtaining finance through traditional lending sources, such as the banks, remains one of the biggest challenges for dynamic companies seeking to fund future growth. We recognise that we have to be diverse and imaginative to source finance.  On a plus side, there are growing signs that asset finance and some government initiatives are starting to develop, but the road ahead remains tough.  Here are three of the key areas to address for any business looking to source finance to grow:

  • Planning ahead is crucial as you need to anticipate your requirement and kick off discussions with prospective funders very early on. It is also worth noting that it is a fight for capital and you need to be at the front of the queue. http://www.ginem.co.uk/
  • Have a plan A, B, C, D ….. and bring in competition for funding and be open-minded to new institutions, new forms of finance, new structures that can meet your needs in an environment that is fundamentally different from pre-credit crunch days.   Business angels now also provide loan finance and this is any area that many businesses could consider.
  • We have said it on many occasions, but deliver a robust plan and demonstrate that you can think through the challenges in your business as well as the upsides.  In today’s world you have to consider things from a banker’s/funder’s perspective as well as from a shareholder’s.  You need to consider a warts and all plan and avoid any due diligence holes in the opportunity by anticipating pitfalls.

We, of course, can help in all of these areas.  We do this through experience and as business owners and we would welcome an opportunity to listen and for you to Tell Us Your Story.

Steven Mugglestone BA FCA
FD Services
Tell us your story

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enquiries@mgch.co.uk

www.mgchayles.co.uk

Leicester               0116 233 8500
Nottingham           0115 941 5193
Birmingham           0121 236 3317

Written by Steven Mugglestone

January 15, 2013 at 1:47 pm

Finally, a relevant business audit that helps a business and owner survive and prosper:

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Audits are sometimes considered to be nothing more than a signature on carefully worded statement, which may or may not mean the accounts are seen to be true and fair. McGregors Corporate, an Independent Entrepreneurial Firm of Chartered Accountants and Business Advisers, based in the Midlands are trying to address this negative and have developed and launched a business audit service, which can be adopted either as part of their normal audit service or can be taken up by non-audit businesses wishing to review their business in order to grow.

The innovative and very pro-active service has been developed from the approach that larger businesses’ finance directors would adopt to seek to manage, control and grow an organisation.  It has also been developed by a team of finance and business professionals with relevant and real business experience, rather than from an accountant or auditor.  McGregors see it as a valuable tool that will seek to differentiate them from other accountancy businesses and allow them to compete with the national firms.

Either as part of an audit or as a two day review of a business, the approach and report seeks to cover the following areas of practical business and finance advice for growing SMEs:

The Personal Position and Future

As part of the review, the personal position of the business owners are put into context as a personal balance sheet of assets and liabilities and after understanding and discussing future aspirations, a relevant plan of protection, wealth management and growth is proposed, with a keen eye also kept on family matters and wealth as well as either succession or future exit and sale issues for any business.

Seeking relevant business support

As well as ensuring the relevant financial statements are compliant with laws and financial reporting standards, a review and plan of all tax and financial compliance will suggest efficient ways to ensure that neither filing deadlines are missed, but also that financial statements give the right message to all stakeholders, including shareholders, bankers and finance companies, customers and suppliers.  In a world that is allowing larger businesses to avoid the necessity of a formal audit, the financial statements are still the most publicly available and used document that a business provides about itself and who they are drawn up and what they include and say is still very relevant to the success of the business.

A review and suggestions of even the most basic of tax plans will provide valuable year on year tax planning advice, which will provide significant savings to any business.  This will ensure that you address all relevant tax releifs available to a business including pension contributions, R&D tax relief, use of limited liability partnerships for growth as well use of business cars, to note a few key savings.

A review of either other compliance issues may suggest outsourcing of HR, health and safety and legal areas would mean that the business can ensure that it complies and deals with all relevant laws, at a manageable cost.  Without this, the business may be facing significant risks that may prove to be too costly for the business to deal with, if left not dealt with.

A basic review of terms of business, contracts and credit control procedures may bring to light a number of issues, that again may prove costly to a business.  Positive, but firm credit control processes and documentation will improve cash flow, which is the life blood to all businesses.

Relevant and real improvements to operations

Sometimes a business owner cannot see the wood from the trees as they are entrenched into working in rather than on the business.  An independent view and suggestion of some relevant controls which provides controlled delegation, will free up key individuals to concentrate on what they do best.  It is often noted in the press that police need to be freed up to deal with crime directly and not get sucked into administration.  The same issues arise in businesses as well.

Does your financial reporting provide relevant information, in order to manage and grow your business?  With relevant key performance indicators and summary information of what matters, this can be achieved.  Benchmarking tools are also available to help a business understand what areas need to be addressed, working on improvement on poorer performing areas while maintaining what is good.

Form benchmarking to a relevant tendering of new suppliers, profit improvement can be started and maintained.  Many businesses do not choose with most cost effective supplier as they never spent time understanding their usage of the supply, both products and timing issues, and so selected the best headline prices.

Increased debtors, increased stock and other working capital areas mean reduction in cash and cash flow.  With relevant and firm credit procedures and understanding of stock and delivery requirements, this can be improved providing much need cash and improved cash flow to a business.

Where is it all going?

Businesses do have a strategy, but some forget and get caught up in just surviving.  An opportunity to stand back and consider what the end game is, will reveal issues on current and future investments in capital and people.  As part of this longer term tax planning can be considered, again utilising limited liability partnerships for growth and seeking the sue pension scheme routes for property and major capital expenditure.

After tackling the day to day risk issues arising from employment, health safety and other compliance areas, businesses need to look at other risk areas around what they do and supply and look to adopt appropriate plans to control and mitigate those risks.  In the extreme many businesses have failed following the aftermath of a major problem or disaster rather than the issue alone and this needs managing.

What is the timetable for all of the strategic activity?  A little understanding of this will have major implications as to the development of the business, its capital expenditure and its funding.  These areas should be appropriately considered and a third party view will provide some light and observations on this and provide some solutions as well.  Funding issues can again be raised and addressed, with appropriate funding obtained for relevant areas over appropriate timescales.

Finally either succession or exit issues need to be considered and managed appropriately.  Succession requires appropriate training, experience and hand-over and exit also required appropriate consideration (How to maximise the value of your business, the good, the bad and the downright ugly).  These areas need time and consideration and many of the issues will ensure that the business will improve anyway, irrespective of any future succession or sale.

The key points about a relevant business audit is that it seeks to put a business into context of what issues and improvements can be achieved and following only it provides goal posts to that improvement and achievement.  Some observers have openly questioned the benefits of an audit, other than a signature at the end of a carefully worded audit report.   McGregors have provided a very positive, real and pro-active answer that will seek to add real help and support to SME businesses in order for them to survive and prosper.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Developing business people

T: 0845 519 5659                T: 0121 236 3317      T: 0115 9415193

steven@mcgregorsbirmingham.co.uk
steven@mcgregorsleicester.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Written by Steven Mugglestone

October 9, 2012 at 9:01 am

Young Enterprise Impress Again!!

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……which is why we support Young Enterprise and Young Entrepreneurs

For another year, I had the absolute honour and privilege to join the judging panel for the West Midlands finals of Young Enterprise 2012, held in the Great Hall at Birmingham University, having been included on the judging panel for 2011.  The winners having already sold their innovative laser cut vinyl album clocks to a trade fair in Switzerland.  There is the obvious saying about selling coal to Newcastle, but these young entrepreneurs from the Black Country actually sold clocks to the Swiss.

For those who have never heard of or seen any of the great work they do, check out their website at Young Enterprise and you will see how this charity seeks to inspire young people throughout the UK, to set up and run their own businesses over the course of nearly a year, being mentored and supported by teachers and voluntary business advisers.  From their establishment in 1963, Young Enterprise, have continued to forge relationships between education and the business community and have been responsible for inspiring thousands of young entrepreneurs.  It is also part of the global Junior Achievement Worldwide organisation, helping to reach 9.7million students across 123 countries.

Six young businesses reached the West Midlands finals, having won their respective local regional events.  Their businesses, whilst very much commercial and making profits, also touched upon strong current themes of social enterprise, recycling and the environment, retro designs and multicultural education.  The winners go on to the UK finals in London, where the standard of business ideas and development will be astounding to anyone who has not already been involved in what Young Enterprise does.

All the positives and excitement
The really great thing about the young entrepreneurs who take part in this journey from business novice to budding entrepreneur is that it always reminds me about what is so good about developing businesses.  All of the positive energy, the bright ideas, the sheer enthusiasm, the innovative ways of reaching markets and building contacts, the reward of seeing something develop and a business grow is all there.  What are not there are the egos, the cynicism, the blame culture, the negatives, the traits you see time and time again on the likes of The Apprentice (and unfortunately in the grown up business world as well), which is also the reason that I prefer to watch Young Apprentice as all of these positives are so obviously illustrated in that program as well.  Young entrepreneurs take the challenges as they are, challenges, and deal with them creatively and positively.  This was in abundance with all of the business teams on show at Birmingham University.

It’s a serious competition
It is no doubt that Young Enterprise is a serious competition as well.  The teams are judged on innovation, product development, their overall business report, their financial reporting, questioning from meeting with them at their trade stand, their slick Powerpoint presentations to a large audience and their creative advertising media and branding.  They are supported and mentored by both teachers from their schools and colleges as well as voluntary business advisers helping support and develop Young Enterprise and the young entrepreneurs themselves.

It was also interesting to be made aware of the gritty competitiveness of the advisers and teachers, in a way that is similar to the TV program Glee, in that they all seek to polish their performances and maximise every area of the judging criteria.

Interesting and completely relevant all of this is, what becomes apparent is that the judges actually judge and choose the overall winner as if they are a real business, which in essence they very much are.  My judging panel included fellow judges who were part of HSBC Bank, University product development experts, social media and branding advisers, past winners and representatives of the Federation of Small Business.  Discussions and the overall selection of the winner centred very much on the belief that this was the best credible business, that not only had a real chance of future commercial success, but one that the judges themselves would be willing to invest in, which is how it should be.  It may be a competition for young minds, but the business ideas and potential were very much real.

It always inspires us to help young entrepreneurs further
Young Enterprise serves as a reminder as to how business can inspire and give opportunities to a wide number of young people from all areas of society and not just the privileged few.  It also reminds us that the future of UK Plc very much depends on the young entrepreneurs of today and tomorrow, which is a key reason why we continue to help, support and mentor young entrepreneurs who approach ourselves for support and business advice.  Our own belief that the local, regional and UK economy as a whole, depends on the continued development of young entrepreneurs and we as a business set ourselves very much as a part of that positive approach.  Judging by the standard of young entrepreneurs on display in Birmingham, UK Plc does have a positive future and so do all of them.

As for Young Enterprise, long may it continue to do the great work that it does, but it is a charity and does require financial support as well as the voluntary support of mentors, advisers and even judges.  I would recommend everyone to visit their website, Young Enterprise, and get involved in whatever way you can.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.


T: 0845 519 5659                T: 0121 236 3317      T: 0115 9415193

steven@mcgregorsbirmingham.co.uk
steven@mcgregorsleicester.co.uk
Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

  

Written by Steven Mugglestone

June 25, 2012 at 12:57 pm

Why, with Vivifi, we are committed to supporting our SME clients businesses and achieving success with them:

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Business growth is not only about sales, SMEs need a team effort

Vivifigrowthgroup

All businesses and individuals understand that the UK and world is still in recession; the current climate remains challenging at best and that business growth and innovation are crucial to helping the midlands region and UK out of the state that the economy is facing at present.

It does not take much of a search of the internet and Twitter etc. to find experts in sales or experts in social media promising the panacea to all business growth problems with genuine business growth solutions and help to build your sales, results guaranteed.

Yet sales are only part of the business jigsaw; to be a really successful business and to sustain that success a business has to excel in most of these areas:

  • Setting a vision, creating a brand and building a strategy
  • Building a sales and marketing strategy for real organic growth
  • Continued improvements in your business systems and operations
  • Ensuring support is maximised for HR, legislation and legal areas
  • Using business structures and support to help you achieve
  • Accessing knowledge to understand your market
  • Managing and keeping costs under control as you grow
  • Keeping cash under control and continually flowing
  • Building a network of suppliers, customers and supporters
  • Managing and reducing your tax costs, together with setting a profit improvement plan
  • Improving cash-flow and utilising finance appropriately
  • Securing your wealth and building for your future

Which is why many large public companies are run by substantial boards of directors and these are likely to be responsible for the areas above in their own right, typically as follows:

  • Chairman (to develop and support the strategic vision)
  • Chief Executive (to deliver the vision)
  • Finance Director (to keep everything on course and within cash restraints)
  • Sales/Marketing Director (to improve, maintain and control organic growth and sales)
  • Operations Director (to run a lean ship and develop the business systems)
  • Commercial Director (to haggle the deals and keep the costs low)
  • Legal/HR Directors (to deal with all legal/HR issues/support and strategies)
  • A company secretary (to record and ensure that all of the above are doing what they say)

This is a big team, but only goes to show how complex it is to run and maintain a large successful business.  Given  that many SME and owner managed businesses have, at best, less than half this number of directors attempting to carry out all these functions, or more often have only one or two main board directors, with members of the family helping as well, it is no wonder that small and growing businesses can feel like that they are pushing water uphill and that the task is enormous.

Given also that support and advice can be found, but can be seen to be both at best sporadic and requiring a business to source the support from a number of different areas, which can be sometimes contradictory, an SME business can feel isolated, confused and very much on a tread mill of a daily business grind.

Steven Mugglestone, a partner with Independent Chartered Accountants, McGregors Corporate, and former finance director, believes that, together with his joint venture partners at Bray and Bray Solicitors, Precept Optimum Performance, Expense Reduction Analysts and support from DeMontfort University and Leicester Chamber of Commerce, they are putting together a potential solution to really help SME businesses in the region.

Vivifi Business Growth Groups, http://vivifigrowthgroup.co.uk/, are being set up in Leicester as well as in the future, in Nottingham and Birmingham to help SME businesses improve and grow and, hopefully, successfully bridging the gap left after the closure of government support and the support available to larger businesses who are willing and able to pay the high costs of similar elite business organisations.

Vivifi has been created to provide SME businesses the opportunity to obtain structured support for their businesses to help them grow and achieve their business aims.  The name has been chosen as it is derived from Latin meaning to give or to bring to life and that is exactly what Vivifi see as their main business aims and mission.

Steven Mugglestone explained, “I certainly really started to fully understand business and the importance of all of these areas from time  spent  as a finance director, when you are faced with actually being part of the running and sometimes turning around a business.  As an employee or middle manager you just do not have to contemplate or tackle the whole “holistic” approach.  As a finance director, I understood that sales was not the whole answer, with most business failures due to a lack of cash flow and cash management, down really to not having a proper plan covering all of the areas that we are seeking to address. Within the accountancy business of which I am a partner, we have been both introducing and developing how the skills and approach of experienced finance directors work to improve and grow businesses.  We looked at how best we could structure a practical and very real business support offering that would be very valuable to SME and growing businesses and, we hope that we have developed the most valuable and cost effective way an SME can utilise the skills of all of us and our partners as if we were part of their own business. We are now very excited about working with the Leicester Chamber of Commerce and DeMontfort University and launching this support in Leicestershire.”

Vivifi have already developed a program which seeks to bring groups of 12-15 businesses together to work together in the first year on the following areas:

  • Group foundations and introductions
  • Principles of leadership in a growth business
  • Creation and communication of a growth strategy
  • Building strong and profitable customer relationships
  • Effective marketing
  • Winning new customers
  • Controlling costs in a growing business
  • Business planning and creating an appropriate plan
  • Review of plans and performance

From then on groups will continue to develop their businesses through improving their business systems and processes, introducing the functions of a finance director, cost reduction programmes and additional strategic and  change management support.

The group members will benefit from this structured approach and will be encouraged to help support and push each other and their business approaches.  The group members will also have access to legal, financial and cost reduction support from the onset as members of the Vivifi partners will be available at the group meetings for both delivery and bespoke support if needed.  The Vivifi partners have also established key links with universities within the midlands region as well as direct access to bank finance and private equity finance for when the times are right for group members to expand their business further.

The Vivifi partners, however, are stressing a number of key and unique reasons why they see this offering will prove to be a success and invaluable service:

  • Full business support to grow and sustain a business have been included
  • The Vivifi partners are experienced professionals who have wide and varied business experiences, learned from real experience from within running businesses as well as advisory roles
  • Vivifi, however, has been developed as a stand-alone not for profit business and offers the support at a fraction of the cost of similar offerings that are seeking to make a profit

Phil Atherton, of Precept Optimum Performance, who are another founding partner and professional sales and marketing training business concluded, “We have created Vivifi to pay for itself but to be “a not for profit business”.  Each of the partners have individually been seeking a way to really add value to their own clients and future potential clients and we all agreed that this is a brilliant way of doing that.  It provides a fantastic resource for each of the Vivifi partners client bases as well as, hopefully attracting for a wider range of businesses to the project and for them to realise what they are missing and seeing what real pro-active and valuable business advice and support is all about.”

Vivifi Website

Vivifi Twitter

Linkedin Group

Steven Mugglestone BA FCA,

Finance Director Services

McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/

T: 0845 519 5659

steven@mcgregorsleicester.co.uk

     

Written by Steven Mugglestone

March 13, 2012 at 1:24 pm

Tenon’s clients paying a high price for their failure:

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Tenon’s clients paying a high price for their failure

There continues to be significant and almost weekly reports in the press about both the business issues and reported practices of the UK’s only listed accountancy practice, RSM Tenon.

I have read these with interest, as a former PLC Finance Director and now a partner in an independent firm of accountants and business advisers.  Much of what is being reported in the press now has been known within the accountancy profession for quite a time.  I read it all with both surprise and sympathy, surprise that a public listed firm of accountants can act this way and make so many mistakes in dealing with their own business and the operations of a public company and sympathy for their clients, as it their clients who are paying the increasingly high price for Tenon’s failing business model and practices.

What you learn from being a PLC FD

I worked as a Finance Director of a fragile small public company, which in the end had to be restructured.  When first appointed you do need to learn very quick lessons about the business’ relationship with the market, the stock brokers and the brokers’ analysts.

As well as publishing accounts, every six months, a Plc. also issues summarised forecasts about its anticipated performance in the coming year.  If at any time it believes that the results of the business will waiver by more than 10% it has to announce to the market, the Plc must inform the market again, and these are known as profits warnings.

What people sometimes do not realise is that that these forecasts are scrutinised and questioned by third parties to ensure that they are robust.  As a new FD, I was certainly surprised by the depth of discussion with the analysts at the stock-brokers.  They need to understand your business, your competition, your competitors, the areas you operate, the reasons and assumptions underpinning your projections and they question you accordingly to ensure that they are comfortable to support your business, its accounts and forecasts, in order to support its share price and trading.  The analysts do understand the business that you operate in and do have a good knowledge of your competition and structural issues, so “fooling” them or “being foolish” with them is not an option.

I am not sure whether Tenon have tried to fool the analysts or they just did not understand their own business, either way it is not the way a Plc. is expected to operate and certainly not what is expected from a firm of accountants, who should know better.

Given the recent appointment of CEO by Tenon, maybe they have started to realise this a little late:

http://www.accountancyage.com/aa/news/2152593/-pwc-managing-partner-takes-rsm-tenon-ceo-role

Acquisitions

Given the importance of ensuring that your accounts are robust and that your forecasts are equally as reliable, growth by acquisition must also ensure that you have accounted for and dealt with your acquisitions appropriately as well.

When a business acquires another business, they assess the assets and liabilities acquired and make appropriate adjustments for losses and other liabilities as well as making provisions for closures, redundancies and other liabilities and costs (and cash requirement) derived from the restructuring and bringing in the new business.

Tenon has grown by organic routes but also by significant acquisitions.  Individual independent firms and offices have been taken into the firm (on a part cash/part shares basis) and these are offices where the partners have not sort to continue their firm’s name with new younger partners but have opted out by selling to a national firm.

Tenon has also made two major acquisitions over the last couple of years:

  • RSM Bentley Jenison
  • Vantis Plc.

Both of these acquisitions have been cited as reasons why Tenon has problems.

http://www.accountancyage.com/aa/analysis/2140715/boardroom-clearout-rsm-tenon

Both acquisitions seem not to have been dealt with appropriately, as other businesses would.  Appropriate and accurate evaluation of the assets and liabilities of both businesses does not seem to have been undertaken and worse still; the market has been told that these businesses will add to the profitability of the main business.  Plcs do not act this way and accountants do know better, so why has Tenon done this?  Is it ignorance or is it deliberate?

Given that Tenon may need £20million from shareholders by way of a rights issue, the one thing that they will have to be certain of is their current position and forecasts for the future, if the market is to trust them further.  The have been described by their second biggest shareholder as a “company out of control.”  This is probably why they have chosen to quickly appoint an experienced new chief executive, which in itself is an admission of failure of their current business model.

Desperate for fee income and reported bad practises

All of these “mistakes” have added to the pressures for Tenon to grow and produce profits from their other core business areas, and that means making more money from their existing client base as well as acquiring new clients.

The Times (Saturday 11 February 2012) has reported the whistle blowing of a former Tenon director and head of their Southampton office, citing a number of “bad practices” including prematurely recognising income on cases before they should.  This can mean billing clients before work is completed or reporting income when bills have not been raised, before agreeing these with their clients.

We are also seeing more comments from appointments with potential clients that they have seen fees continually rise from Tenon, with no change in the service delivery.  This is obviously alleged and anecdotal practise of the business, but given the reports now coming to light in the press, there does seem to be fire included within the smoke signals.

Employee Benefit Trusts (EBTs) are ticking time bombs

Tenon has seen significant growth from their specialist tax products areas.  This area of work is not covered by the FSA as a financial product but lies within the area of specialist advisers, legal opinions and an advanced business understanding.

Employee Benefit Trusts (EBTs) is one such area that has been “sold” over the last 10 or so years, but EBTs are failing and fall well within the current anti-avoidance legislation brought in by recent governments.

Hundreds, if not thousands, of EBTs and similar have been introduced and businesses that have them in place, should now have been advised that if they wish to either sell, pass on their business to family members or clear up their tax affairs with HMRC, they must seek to close the EBT and negotiate, agree and settle the tax position, which could be significant with HMRC.  Businesses with EBTs are now considered to be un-saleable until the EBT has been closed and settled with HMRC.

Tenon has introduced many EBTs and similar strategies and their clients are now finding out that they have a significant problem to deal with.  Costs, time and fees in dealing with these issues with HMRC are significant both to the clients and to Tenon.  Engagement letters are likely to be very clear that it was all the clients decision to accept and deal with the risk of these strategies, but their clients will expect to get support, and we are talking about significant support amounting to £millions of fees and costs.  Given the pressures of Tenon to generate cash and profits and given that they are also likely to need a cash injection by way of rights issue, there is significant doubt whether Tenon and their clients will be able to agree on who is responsible for the costs of rectifying these mistakes.

As an independent firm with partners and senior staff from top 10 and top 5 firms, we have to make it clear that whilst we have the same experience, offer the same service and access to finance, tax and growth strategies, we do not have to face these pressures or issues.  We do not have the same high cost and overhead structures; we do not have the pressure to generate high fees to meet regional or national targets set by expensive head offices and we do not have to make high returns to shareholders; in doing that we do not have to sell high sell high risk “products” without offering the future support to our clients.

We are offering to help and support businesses with EBTs to help to rectify the position with HMRC and for SME businesses, we are also able to offer and provide audit, accounts and tax compliance service at a fraction of the cost of either Tenon or other national firms.  All of this is provided by the same experienced levels of staff as Tenon and other national firms.  For some of us, including myself, who have been Finance Directors to SMEs and Plcs as well, we can bring those skills and experiences to our clients as well.  As outlined earlier, I am astonished at the behaviour and actions of Tenon as a Plc.  I am not sure, at all if a Plc. model is appropriate for a firm of accountants, but on top of that, there are other significant business decisions and practices that Tenon have undertaken which many other businesses as well as accountants would not have done.

Profits for the first half year; significant losses the second half; profits warnings; black holes, restatement of previous accounts; £20million equity requirements; sacked board of directors; errors in acquisitions; bad practices with clients; over-billing; attempts to bring forward income; settlements in court; desperation for fees and cash; massive selling of failed tax strategies; disgruntled staff and disgruntled clients; and all this from a firm that was awarded National Firm of the Year in the 2011 British Accountancy Awards, …… Amazing or just The Emperors New Clothes!

We expect there to be continued issues and changes with Tenon, including whether they will return to private ownership.  We are, however, seeing continued discontent with both clients and staff and we are obviously keen to support and help both.


Steven Mugglestone BA FCA
,
Finance Director Services

Written by Steven Mugglestone

February 16, 2012 at 6:43 pm

#Rip Off Britain, a Solution for SMEs:

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#Rip Off Britain, a Solution for SMEs

Or Accountants get away with £500+/hour charges; The Emperor’s New Clothes and why Aldi are right!

Brand Status

Nike, Adidas, Boss, Harrods, David Beckham.  They are all recognised brand names, across the globe and all we know that we pay a significant premium for that brand.  It does not, however, stop us from going out and paying the extra, for being seen owning these brand names, vanity, kudos, style, all combine to make us believe that these are quality must have items.  We do this when we also recognise that the trainers we buy probably all come from the same factory in China or wherever or that perfume or aftershave is just water, alcohol with something that makes it smell nice.  The brand is the value, when the content is usually pretty much undistinguishable.

Most people recognise this, but it does not stop them paying over the odds for the name.

Things are changing and certainly have changed in both food and many clothes ranges in shops, own brands are becoming more and more popular and most people recognise that many own brand labels of foods are actually made by the well-known brand manufacturers from the same factories and production lines.  I have certainly personally walked around two well-known snack food factories to see both main labels and supermarket own labels being made and boxed.

The Emperor’s New Clothes

I would expect everyone knows the Hans Christian Andersen story about the Emperor’s New Clothes, but as a reminder you can always read the outline at Wikipedia:

http://en.wikipedia.org/wiki/The_Emperor%27s_New_Clothes

To a business, there is a serious message here, for all of us.  Sometimes there is nothing special, nothing new, nothing powerful or exclusive, nothing that can really add value, but we are expected to believe that there is and we act accordingly, recognising but never saying, “but, the king is in the altogether!”

Aldi are helping us see what the emperor is not wearing

I do uphold and applaud the current advertising campaign for Aldi.  Two products, side by side, the main label and their own label, with the same message from the person in the advert.  They like both products the same, but the message on the screen shows us that the Aldi own label product is a fraction of the price.

Professional Support is about people and experience and not a brand

What lessons can we learn about accountants/professional advisers and what should SMEs be wary of.

Well, brand values are prevalent in the accountancy profession and the same can be said of accountants and any professional advisers.  Well, I believe that sometimes, it can.  The brand will out.  But, we fail to recognise that service businesses provide people as their product and it is really those people that make the real difference, rather than the name of business itself.  In fact, the accountancy world is changing significantly both locally and nationally, with many established older independent firms being sold to brand names, but with many brand names failing in business and failing to develop their own businesses.  Conversely, there are other independent firms, like ourselves, being developed from senior and experienced professionals from within the larger brand names.

The reason our business and similar ones are being developed is that we want to work with SME clients and help them achieve.  It is what we do and what we enjoy.  Any SME business from start-up to larger established businesses want to work with a trusted adviser, someone they can rely on and call upon for help, direction and advice.  These are people and relationship issues and have nothing to do with a big corporate brand.  We want to build a long lasting business relationship with our clients.  At the same time, our clients can rely on the fact that our partners have been through far more business and finance experience than many others.

But we need a “name” because ….

Sometimes businesses say this as they believe that they have to have a “name” and accept the cost consequences for this.  With the Emperor’s New Clothes in mind, let us have a look as some of the facts:

I am not seeking to single out any particular firm, as the same “issues and things” can be found for most, if not all of the top 10 firms or top 20 or so franchises.  The key point to raise is that the “names” are not whiter than white and sometimes do not offer a better level of service, they are prone to mistakes, errors and fraud and sometimes, these are major problems, yet we perceive that these firms are cleverer, offer better service, better value and we are willing to pay the cost.  Many SME businesses using “names” can expect to pay up to £500 and sometimes more an hour for some directors, let alone partner/owner levels, at local offices for many areas of work, yet it is unclear why a business should accept that and what extra value they are getting for this premium.

How can we establish ourselves and take on the brands

We are building a brand, as you would expect, but by a quirk of fate rather than any pretentious reasons, we have corporate in our name, although we aim to be entrepreneurial in our approach.  Being entrepreneurial and independent, however, does not mean that we do not have the same level of corporate skills, systems and experience and, sometimes, more than many of the largest of firms.

Our partners have many years-experience working both within the largest accountancy practices and as finance directors within a variety of business up to listed public companies.  We have combined these skills and approaches to really ensure that we can be a valuable and trusted adviser to our SME client base.

Our approach is always to ensure that our client’s goals are achieved but we will always ensure that this is done by first addressing their personal and family position, after that we apply our commercial acumen and experience to really help a business achieve, working with them to set the agenda for what it is they want from a business and a business life.

This is not done by delivering pages of pre-prepared generic notes but is always personal to the client and is achieved with the support and expertise from business professionals with real wide-ranging experience and expertise.  We also always aim to do this with a smile as we look to build a great long lasting relationship with our clients.  We believe that providing the same level of services expected from large national firms, delivered locally by the same quality and experienced partners is key to what will prove to be our current and future success.

These are some of the ways that we do this:

  • Our Audit Service provides quality controlled audit work using up to date systems and managed by experienced auditors, who have been involved in large complex audits covering most business sectors.  We use this insight into a business to provide a commercial view of the strengths, weakness qualities and improvements required for a business and its systems.
  • Our Statutory Accounts and Tax Compliance Service is carried out by experienced local professional staff with many years-experience working with SME businesses.
  • Our Management Information Service works with businesses to create appropriate and tailor made reporting to help manage a business and its growth.
  • Our Finance Director Service is controlled and delivered by partners who have been FDs, raising finance; growing businesses; starting businesses and turning businesses around.  This ensures that your business can be lead in the same way as many large established business, but at a cost that suits SME businesses.
  • Whether looking for finance to start, grow, acquire or eventually to retire or sell, our Corporate Finance Service ensures specialism, knowledge and trust in a business is combined.
  • When looking to acquire a business or sell or re-structure a business our Transaction Support Service will really help.  Managed by partners with real FD experience, unlike many other firms.
  • Our Specialist Personal and Corporate Tax  Service provides innovative structures and solutions, together with Probiz Tax, to really mitigate and reduce tax costs.
  • Our Business Growth Service joins with our associated partners to help improve sales, whilst managing and reducing costs as well as controlling risks.
  • Our Wealth Management Service protects an SME, their owners and their family and builds and protects their future wealth.

Advert over, but the key point is that many, newer independent accountancy firms, as well as ourselves, are being developed in the market today and these are being developed by partners and directors formerly from within the larger businesses, offering the same service from the same experienced senior team, but at a fraction of the cost.

The times they are a changing

The last 3-4 years has seen significant changes to the world of accountants, as well as lawyers, and this looks like it will continue.

Many of the large firms growth has slowed, stopped and gone backwards.  National practices have gone bust, which cannot be a great advert to support your credentials as a business adviser, yet these firms have morphed into other competitors, who equally face problems.  Some of the largest firms have completed takeovers and/or mergers which, again, have proven to be a disaster, with the businesses being acquired appearing to be works of fiction and the subsequent redundancy programs of 10% of their staffing as a direct result of bad business decisions and policies which amount to keep growing and acquiring come what may.

The loss of traditional independents

Many of the older and established firms have been lost or have been acquired by the national firms and franchises and this is largely because the existing partners could not develop a younger partnership to take on the future of their businesses and have had no choice but seek to sell to others.

As well as other companies that we know, we believe that we are amongst a new breed of commercial and entrepreneurial firms of Chartered Accountants.  We also believe that we have the experience and provide the same level of service as the largest firms supporting SMEs, but we are keeping our costs low and we are looking to pass this on to our SME clients.  Many of the larger firms serving the SME market have to service high local salaries, significant local office costs, higher national salaries and national office costs and on top of that provide returns to their shareholders.  The pressure is on for local offices to earn more and more from their existing SME clients as well as seeking more clients with high recurring fee levels.

We stick by the Aldi business model

Aldi are striving to show consumers that they are offering the same quality of product but at a fraction of the cost and they continue to shout this out, loud and clear.  To do this they also have to ensure that their own costs are controlled and the advisers and auditors that they have used are midlands based independents, so it is good enough for them.

We also work with colleagues at Expense Reduction Analysts, http://www.expense-reduction.co.uk/, to help our clients and contacts to source alternative supply chains in order to lower their costs for many direct supplies as well as overheads.  They cannot recommend a professional adviser, but would suggest that a business looks at the charges for their audit, accountancy and tax compliance costs regularly as well and seek other firms to provide professional service proposals.

Two key reasons for my own return from Finance Director back to accountancy practice are that I really enjoy working with SME business and the other is about sharing with clients the things that I know now that I did not know when previously in the profession and these are both commercial skills as well as understanding the story of the emperor’s new clothes and trying to ensure that SME businesses do not fall for it.

We, like Aldi, aim to keep saying this, loud and clear, same service, same people providing the service just at a fraction of the cost.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

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Written by Steven Mugglestone

January 23, 2012 at 8:29 pm