Steven Mugglestone

The more I learn, the less I know

Posts Tagged ‘Finance Director

Midlands Accountants, McGregors provide mentoring prize to growing entrepreneurs

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Midlands Accountants McGregors provide mentoring prize to new, young (as well as not so young) and growing entrepreneurs

McGregors Corporate, the Midlands based firm of entrepreneurial Chartered Accountants and Business Advisers have provided further support to online accounts and book-keeping business, Squeezeonline and their growing entrepreneurial client base by providing a free business mentoring and growth service as a prize to selected users of Squeeze.  Squeeze is a new full online accounts service developed with Sage in the UK and offers a total accounting, book-keeping and annual accounts and tax returns service through a cloud based system.

As part of the launch in February and from the summer 2012 onwards, Squeeze will select one business a month from their registered customers who submit a two page summary of their business and plans for the future to info@squeezeonline.co.uk to benefit from this mentoring prize which is worth thousands of pounds in professionals support.

McGregors Corporate have agreed to provide a business mentoring service for a two year period for the selected winners of this business draw.

McGregors, together with a number of other businesses, have already developed a business growth support service to larger growing businesses and this is called Vivifi, www.vivifigrowthgroup.co.uk and the ethos of this support is included within the free support to Squeeze users.

The free business mentoring includes:

  • Review of business plan and advice and support to build on missing areas and build the business going forward
  • Monthly board meetings by telephone and Skype as continued support
  • Utilisation of Squeeze accounts to control and monitor the business
  • Assistance to build customer, supplier and support networks
  • Assistance with appropriate structures for growth
  • Virtual FD service to build a robust growing business
  • Access to contact base of McGregors
  • Assistance with finance and tax on a one to one basis

Jason Seagrave, a partner in McGregors in Nottingham stated, “We see Squeeze as an important and low costs support service and product to small and growing owner managed businesses and we are committed to helping Squeeze develop their brand and product throughout the UK.  We have helped Squeeze develop their product including online training videos and business articles for their website to help small businesses with online information.

We have, therefore, also provided this support package as a valuable “prize” to the selected customers who wish to take part by submitting their brief business plan to Squeeze.  We see this as a really valuable way to help these businesses grow and we do encourage young entrepreneurs to take part in this as we do see young entrepreneurs as a crucial part of the future success and growth of the UK economy.  All in all, we see that this kind of prize would prove to be far more valuable and worthwhile than the usual memory stick or computer mouse mat”

Squeeze was launched in February 2012 and is being developed and promoted with Sage throughout 2012.  The promotion and potential free mentoring service will be available from 2012 and will be available to the current and new customers that are using the Squeeze online accounting and book-keeping service.  The promotion will run for a year with one business a month being selected to benefit from this valuable support.

For full details of Squeeze and the service that it provides can be found at their website, http://squeezeonline.co.uk/, and there is a brief video of why Squeeze works, helps small businesses and is so cheap at http://squeezeonline.co.uk/hts_video.html.

Squeeze also has articles and blogs at https://twitter.com/Squeezeonline

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                T: 0121 236 3317
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.

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Written by Steven Mugglestone

March 18, 2012 at 4:29 pm

This continues to be our most popular article to date, so much for the technical, MBA & tax stuff:

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Are Accountants Really Boring or Really, Really Boring

I started to write a technical piece, but I was distracted by the eternal debate that appears to have started again.  Are Accountants really boring or really, really boring.

Yes, I am an Accountant and yes I am part of a firm of accountants, in fact I am a Chartered Accountant and part of a firm of Chartered Accountants.  I have lived with this all of my working life.  I trained as an Accountant and qualified as an Accountant (although, I do not have an Accountancy degree, it was Economics).  I have worked in business, as a finance director, which is like an Accountant, just more decisive.  I have faced the stigma and the ridicule, the tumble-weed silence when someone asks you what you do.  I consider myself a fairly confident and comfortable individual, married with children.  The stigma of instantly explaining that I am an Accountant usually means that I tend not to tell new acquaintances what I do.  I tend to have a good chat and sometimes later in the discussion I get asked the inevitable question and usually I get the same response, “No, …. Really, … You don’t seem that boring.”

I have read recently how the debate continues, Accountants are boring.

So I have taken some time to have a look at this, …. Sensibly and with the respect and gravitas that the subject deserves.

The Science of It

It appears that in 2005, the City University of Hong Kong proved that accountants were boring and this was due to using dull words and dull methods of communication.

http://www.telegraph.co.uk/science/science-news/3342652/Its-official-scientists-prove-why-accountants-are-boring.html

Now, I am sorry, but I think that you will find, that if you study any specialist talking through the technical areas of their roles, it is boring to others.  Physics and rocket science hardly makes great after dinner conversation, but Hollywood can make it look like that they are all Tom Hanks.  And anyway, an academic study to prove that accountants are boring, surely that has to be the apex of boring.

Technical or detailed aspects of any job will be boring but cannot make you boring.  All jobs have a level of technical knowledge and expertise; Formula 1 engineers are intensely technical, yet are seem to be glamorous. Honda pride themselves on the attention to detail and market that as a key USP for what they do.  Professional decorators watch paint drying for a living, but they are not labelled as boring as Accountants.

In fact the technical point and the issue that even Accountants are different can be seen in the categories that in the Accountancy profession, we find ourselves labelling each other, finders, minders and grinder.  The differences between those who are good at getting clients; those that build relationships and those that do the numbers.

The Butt of Many Jokes

Accountants tend to be the butt of jokes and they centre on the boring tag:

An Accountant is:

  • Someone who uses their personality as a form of birth control (I have two sons!)
  • Someone who makes a bold fashion statement by wearing a blue suit instead of grey
  • Someone who isn’t really boring, they just get excited over boring things
  • Someone who does not have the charisma to be an undertaker
  • Someone who does not know that Gap is a clothing store

An extroverted accountant is one who looks at your shoes while he is talking to you instead of his own.

However my favourites have to be:

There are three types of accountants in the world, those who can count and those who can’t!

There once was a business owner who was interviewing people for a division manager position. He selected an engineer, a mathematician, a physicist, a logician, a social worker, a lawyer, a trader and an accountant to interview and decided to select the individual that could answer the question “how much is 2+2?”

  • The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, “It lies between 3.98 and 4.02”.
  • The mathematician said, “In two hours I can demonstrate it equals 4 with the following short proof.”
  • The physicist declared, “It’s in the magnitude of 1×101.”
  • The logician paused for a long while and then said, “This problem is solvable.”
  • The social worker said, “I don’t know the answer, but I am glad that we discussed this important question.
  • The lawyer stated, “In the case of the Crown vs. Svenson, 2+2 was declared to be 4.”
  • The trader asked, “Are you buying or selling?”

The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, “What would you like it to be?”

Why is the last joke funny? Yet it speaks volumes about why Accountants are not boring.  It is not that we cheat or that we have an array of despicable tricks (ish).  It is that we are trained to think laterally, finding an answer and solution for our clients in what we do, despite apparent problems and issues.  We try and cut through the issues and problems and solve the problem, in whatever way we can.  We are solution providers and aim to get clients where they want to be.  There is no such answer as no and there is no such statement as “It cannot be done.”

Glamour and fame does not necessarily mean that you are not boring

Living with the stigma of being an Accountant has meant that I do not immediately tell people, as I explained earlier.  Yet it can appear that working in the more interesting world of showbiz can mean that you are instantly seen as interesting and glamorous, even if in reality you are, well, boring.

Everybody has an odd story about meeting a TV celeb and I am not any different.  Mine comes from meeting a celeb as part of the hobby that I have, a hobby that used to be seen as unusual and weird unless you were Welsh or gay with a Judy Garland obsession, I sing.  But now since the advent of Last Choir Standing, X Factor, Britain’s Got Talent and now Glee, it seems not only acceptable, but actually cool.

I was actually taking part in a large choral piece with a group of choirs and we had an afternoon rehearsal before the evening performance.  I stood next to a chap, who I did not know, and spoke to him during the coffee break.  Now I usually  have a high tolerance for boring people but he was pushing that somewhat and he started to say to me that he likes singing but “with his job” he does not really get enough time to join in with singing stuff.  Now at that time, I was going to ask what he did, but I did not get the chance and we carried on chatting or he carried on talking at me and he kept dropping in with, “of course with my job I don’t get a lot of free time and of course with my job I am out and about a lot.”  Well, I kind of got the message, but decided that I would not ask him what he did, let alone realise that I was supposed to know already.

Afterwards I was asked by the others around me, what was he like? What did we talk about?  I did not know that he was a famous TV presenter (of the DIY/house-changing/gardener-ish ilk), yet I declared that he was ok, a bit boring and pretty self-centred.

A lot of people in business say that perception is everything.  I think that is true in this case, he was perceived to be interesting and famous, and I am sure that it is true about Accountants.

Accountants in business and as leaders

The UK has about 50,000 family doctors, but nearly 280,000 professionally qualified Accountants.  That is a lot of boring people.  At any one time there are 165,000 registered students training to be Accountants.  That is a lot of young people wanting to be boring people. 

Around 80% of FTSE 100 Companies have at least one Chartered Accountant on their main board of directors.  Many Finance Directors go on to be Chief Executives and prove to be successful, ok Gordon Brown did not do that well.

And Accountants have gone on to fame and fortune and have shaken off their old image as being boring:

  • Barry Hearn – Boxing manager and sports events promoter
  • J. P. Morgan – This famous financier and banker
  • Pádraig Harrington – The former PGA and Open Golf Champion
  • Lee Van Cleef – Hollywood star of spaghetti westerns
  • John Major – Former British Prime Minister and often described ‘Baddest Man on the Planet’ (…no wait that’s Mike Tyson). Major trained as an accountant. Some might say, “Unsurprising!”
  • Kenny G – The saxophone player
  • Josiah Wedgewood – As in Wedgewood the potter.
  • Luca Pacioli – Big mates with Leonardo Da Vinci.
  • John Grisham – The best-selling author, and I thought he was a lawyer
  • Robert Plant – The Led Zeppelin rock legend
  • Cecil Parkinson, former Conservative MP and now Baron Parkinson

And for those in the West Midland who have already have heard of Peter Murphy, he was included in an article in the FT in December 2010 as the story of the Accountant who went on to feature on the South Bank Show, meet the Queen and play harp for Queen Anne-Marie of Greece.

Has Accountancy made me boring?

I do not believe Accountancy has made me boring, but I let others be the judge of that.  I do believe that it has given me an insight into how businesses work and what does not work.  It has given me insight into how you can build a business, sustain a business, the importance of supporting structures for business, for operational issues and improvement, the importance of strategic thinking, of assessing where you are now, where you want to get to and how to structure a plan of how to get there.  It has given me an insight into finance, into cash management and working capital and it has given me insight into taxation, what can be achieved and what cannot be achieved.  It has given me an insight into leadership and change management and what makes organisations work and what deters them from working well.  It has given me an insight into recruitment and appraisal and how to challenge others and help them improve, how to empower others to improve the business and to enhance the team, their skills and achievements as well.  It has allowed me to work with a large number of businesses, helping them achieve their goals.  It has given me an opportunity to understand the real meaning and importance of good marketing and sales as the lifeblood of a business.  It has allowed me to be involved in marketing initiatives, new start-up businesses, new funding initiatives, working with banks, with other business organisations, with universities and new technologies.  I have worked on business turnarounds, helping business turn a corner and re-build.  I act as Finance Director for a number of innovative start-up innovative product businesses, new technologies and leisure businesses.  It allows me to talk to and meet new contacts and potential new clients on a constant basis.

If all of that means that Accountants are boring, then, well I am ….. boring I suppose.

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/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317

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

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

Written by Steven Mugglestone

February 24, 2012 at 11:37 am

Another Finance Director Area ……. Controlling Risk and How We Can Help:

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Another Finance Director Area ……. Controlling Risk and How We Can Help

For the full time or part time professional finance director, risk is an area that sits firmly under their jurisdiction, mainly as an FD possesses the analytical skills and wherewithal to be able to identify, evaluate and manage this area, but also sometimes because the business owner or other directors cannot face dealing with such an area.  For FDs and special project managers, the risk register and risk management is part of the skills tool kit.

See “How an FD drives a business when sometimes Accountants are just catching up”: http://wp.me/pQyUg-j

What is Risk

Risk, according to Wikipedia, is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss.  Risk management is therefore a matter for every organisation. For those who have been involved in any substantial grant application, or collaboration agreement or even a new business tender, a risk register identifying the risks that the project will go off course and what steps are in place to bring it back in line is common.

Risk management, therefore, is seen as the process of identifying, assessing and taking appropriate positive steps to either eliminate or reduce the key risks faced by an organisation where it is practical and cost effective to do so. This is important as we are considering real potential events and real potential losses.  Thus, proportionate arrangements can (and really should) be put in place by all organisations to minimise the probability and impact of the risks they face – or to deal with the consequences if an external risk cannot be fully controlled or eliminated.

Risk management therefore presents numerous challenges as it reflects the inevitable fact that assets, processes and people can and probably will fail or can be damaged by external events. This in turn can lead to consequences that are unplanned, unwanted and costly to rectify. At the extreme, disasters can happen and business will be tested with their disaster recovery procedures, which are the extreme areas of risk management, but most can recognise the positive outcomes from those businesses who have put in place a robust disaster recovery plan and those that went from bad to worse and even closure as their recovery plan proved not so robust.

A key component of risk is what can be termed Operational risk. Clearly this affects all businesses and relates to those elements that fall within an organisation’s commercial operations. These can often include:

  • Process and procedural robustness and integrity including legality and compliance with legislation, both general and industry specific
  • Staff, skills, training and documentation
  • Specific insurance and self-insurance
  • Supply chain, outsourcing and inherited risk
  • Infrastructure, systems and telecommunications
  • Physical and information security

Risk has two main components; impact and probability. Impact is a reflection of the loss or discomfort that may be caused by an event. Probability (or likelihood) is an indication of how often we can expect a particular event to occur. Taken together, they give an indication of our exposure to risk or how much we can expect to suffer as a result of unwanted or unplanned events. If we picture this on a graph of cost and likelihood, actions that sit in the high cost and relatively high likelihood area are ones that need to be seriously addressed and controlled.

As our understanding of risk management increases, so does the expectation and requirement for organisations to adopt appropriate policies, strategies, training and documentation. A well thought-out risk management plan is critical to the well-being and continuity of an organisation.   Any board of directors for a larger business will ensure that this plan is high priority for delivery and maintenance.

Help with a risk management strategy

A full-time finance director can help manage this area, but those organisations without a full-time finance director, we can help provide this support as part of our Finance Director Services. We can help you prepare a risk management strategy, with relevant supporting policies to cover:

  • Your staff and training
  • Your data, computers and information systems
  • Your internal control processes and procedures
  • Your corporate integrity and security
  • Your risk appreciation
  • A risk register and control documentation

Why do you need help with a risk management strategy

  • You know that you need advice generally on all areas of risk, and its management, that could affect your organisation
  • You want to help embrace and include risk management within the organisation
  • You know that you need help to develop key strategies and processes to manage risk
  • You want to review and refresh your existing approach to risk management
  • You want to improve the knowledge of risk management amongst your staff
  • You need to comply with statutory and/or best practice requirements in your industry

Bespoke Training

If a risk management strategy is to be truly successful, organisations must embrace a risk management philosophy at every level. As organisations grow and risks start to be managed at departmental and divisional levels, it is critical that all those involved in the process are fully trained and aware of what is expected of them.

As full time Finance Directors, those in our firm that have developed our risk management service and help our clients with risk policies, have managed this area within an organisation and we have developed this crucial service for our clients. This can vary from small practical workshops and seminars to larger scale training events. It is generally aimed at senior management, non-executives and middle managers to help them understand the process and embed effective risk management philosophies throughout their operations. However, we will tailor our training to meet the specific bespoke needs of your organisation and this can be targeted at any level of staff you feel is appropriate.

Why would you need training support

  • You want help in embedding a risk management culture within the organisation
  • You want your managers and staff to have a better general understanding of risk management
  • You want your staff to understand the organisations’ processes to manage risk
  • You want to start devolving risks and managing them at departmental level and need some help to implement this

Risk management is critical to the success and continuity of a business and all business, whether small or large must consider and manage risk that is relevant to them and in a way that is both practical and cost effective to them.  Whether you are submitting a new work tender or a grant application, businesses are expected to be able to identify, articulate and demonstrate that they understand and control the risks that they face within their trading environment.  We utilise and combine our skills as former finance directors, managing risk in those business in which we worked within together with our knowledge and wide ranging experience of dealing with a large variety of businesses over our careers, to be able to really help you, our clients and potential clients.

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/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

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

Written by Steven Mugglestone

February 2, 2012 at 10:07 am

Gut Instinct Does Not Replace Good Management Information, Just Ask the England Cricket Team:

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Gut Instinct Does Not Really Replace Good Management Information

I have seen it on numerous occasions, when appointed as a part time finance director.  The owner knows their business inside out, or so they say and believe.  The classic statement, “I know my business income and costs, a third direct costs, a third overhead and a third contribution to financing.”  So after a brief review of the actual information put together, which has never been done, my reply has been, “So what’s the other third then?!”.  “Oh.” is usually the reply.

How to ensure rock solid business decisions

The above situation is more common than you think and, at least in part, the tendency to make decisions on an ad-hoc basis is down to the general lack of good management information. If the numbers are not at your disposal, and that is financial and non-financial, then many businesses have little choice but to make decisions based on gut instinct.

Contributing to this issue is the unreliability of monthly management information, attributed to managers disregarding early warning signs of problems in profitability and liquidity.   In larger organisations with a number of senior management including sales and operational management, a classic technique in order to duck and avoid their own shortfalls and potential failings is to “dis” the management information, picking on the commas, the brackets and the spelling as evidence that it cannot be relied upon.  Nero and Rome aflame comes to mind.

Management is certainly moving from an art to a science. With the on-going computerisation of all business systems, moving on to cloud based systems allowing access and use on the go and more information becoming available to managers on which to make decisions.

With facts at hand, most business decisions become logical. For example, if you know that advertising in using email provides a 15% response rate and you convert 50% of these, as against another that generates a 5% response rate with a 50% conversion, the rational decision is to invest more in the advertising area that provides the greater return. The basis of decisions moves from gut instinct to evidenced based logic if the right reliable information is available.

What if you have poor management information?

The lack of reliable and timely management information can create many problems for entrepreneurs and owner mangers. All management training and business planning relies on being able to measure things to be able to manage.

One of the key reasons why the England Cricket have become the world’s number one test team is that they have an advanced system of information advising of how opponents react to certain styles of play and where balls need to be pitched.  This is based on reliable data from actual statistics.  And do you know what, ….. it works!

The consequences of not having reliable management information are clear – the business will not perform to its potential, because the right decisions are not being made.   The importance of Key Performance Indicators (KPIs) is vital for this success and the England Cricket team are a classic example of this.

Privately owned businesses that underperform have a significant impact on the financial well-being of the owners and, perhaps even more importantly, will create a level of stress that lowers the return for effort to an unacceptable level.

What can you see happening?

Everyone, at some stage, knows how it feels to need vital information but not have it to hand.   What may not be so obvious is whether you have information about the right things or whether the information itself is accurate.

A key part of the business planning process is to identify the business drivers, the KPIs, or those factors that drive your revenue and your major costs. KPIs can be seen as numbers but are not necessarily at all financial.  Examples include numbers of calls per hour, numbers of bums on seats, footfall, downtime, spend per head, machine hours, the weather and temperature, benchmarking against other businesses etc, etc.

It is crucial that your management reporting system measures such drivers. Being in a situation where the business drivers are not known or measured can be your warning sign. Another warning sign to note is major fluctuations between monthly results. This might indicate unreliable information and if that is the case, the warning bells should be sounding.   One example of fluctuations was order numbers, with a business having two good months and one poor.  On further review, the director responsible for sale, updated the sales brochure every three months, so was not out selling.  Easily fixed, but not discovered until the information was made public.

Interested in the issues?

Work with good business advisers, ones like McGregors Corporate, that include partners who have actually been Finance Directors and have been responsible for these improvements first hand.  Work with us and we both can obtain a proper understanding of your business issues, drivers and KPIs.

After that we can work with you to develop a meaningful business plan (which can be very simple) and forecast that you can measure against.   Being able to measure accurately and frequently the mission critical elements of your business will be the start of key improvement to your business, its profits and its cash.  Which business person does not want to see that happen?

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/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

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

Business Turnaround, a Dark Art or Common Sense and a Proper Business Plan

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Business Turnaround, a Dark Art or Common Sense and a Proper Business Plan

More than half of Britain’s small businesses collapse because of cash-flow problems. The UK Insolvency Service sites 65 common reasons why businesses fail.  Many advisers and “experts” publish lists of a number of reasons, seven being a common number, unlucky for the failed business, with clearly a prize and first place going to the Insolvency Service at 65, clearly retired exhausted after then.

We like to keep things simple as this helps us and our clients, but we believe that the success of a business (and therefore the failure of a business) is down to one area (ok, poetic license as it is a related area), cash flow problems due to the lack of a real plan and system of control (i.e. the area that an experienced business orientated FD is good at).

Looking at seven common reasons why businesses fail, it points to the same cause and solution:

  • Business started for the wrong reasons and to try and make money quickly (lack of a real plan and system of control)
  • Poor management and lack of management (lack of a real plan and system of control)
  • Lack of capital (lack of a real plan and system of control)
  • Poor location and marketing (lack of a real plan and system of control)
  • Lack of planning (lack of a real plan and system of control)
  • Over-expansion (lack of a real plan and system of control)
  • No website (lack of a real plan and system of control)

No apologies for labelling the point but all FDs would say the same thing, lack of cash caused by a lack of a real plan and system of control and improvement.  Other recent articles that we have read with interest now refer to zombie businesses and that pretty much sums it up, a re-animated corpse, with no mind of its own; no control of its own; in fact control lies with others; never learning and never changing. In fact a favourite observation of ours is the common lesson for most areas of human behaviour; “If you do the same thing that you have always done, you will always get the same result.”  This is as important to businesses as anything else.  In fact in business, if you do the same thing that you have always done, it is likely that the future results will be worse than before.  We do recognise that many also say; “If it’s not broke then don’t fix it,” but this is also ignoring both normal wear and tear and inevitable depreciation.

Speaking to and working with people who have experienced or been a part of a business failure (and those of us that have seen, have worked with and have been a part of successful turnarounds), there are a range of views and emotions, noting the lack of support from interested parties such as banks, other lenders and major creditors, but in the vast majority of these, there is a common issue, lack of a real plan, lack of innovation and change, lack of a system of control which leads to a cash flow crisis.  In fact the references to lack of support from the bank, when explored further, usually uncover a situation where the business has pretty much lost control to the bank or lender.  There are also a significant and scary number of businesses which only produce annual statutory accounts, find out that they have made a loss, months after the year end; face another issue, such as loss of a major customer or restricted key supply and then tell the bank all the bad news at the same time, asking for funding/overdraft extension, with no solutions being offered by them.  They lack any plan in respect of the relationship, communication and information being given to their bank and are confused and angry when the bank then either refuse the extension or worse still, reduce or remove the overdraft facility completely.  We are not going to comment on the issues surrounding banking over the last two years or so, as this is well documented, but we are aiming to concentrate on how businesses can and should take matters in their own hands and control.

As we are still in what can only be described as challenging and uncertain times for businesses, there are now many who describe themselves as turnaround specialists and look to help to ensure that your business starts on a road to recovery.

I will now make a sweeping generalisation and observation, but in my opinion, there appears to be broadly three types of turnaround specialists;

  • Investors and their advisers who are looking to save the business but also to take advantage of the vulnerable position of the business, to take part or majority ownership of the business for considerably less than normal market value, this is harsh but to be expected;
  • Insolvency experts acting as expert advisers (but usually only looking to support the lending bank).  The reports that they produce and advice that they give can be very biased for not only the lenders positions, but for them to win the future work from the lender, quite a lot of business people recognise this with the analogy of putting Count Dracula in charge of the blood bank and emergency blood supply;
  • There are, however, other experienced advisers who have been there, done that and have the necessary skills and desire to help the business turnaround and be successful.

Going back to the title of the blog, despite the mystery and myth of business turnaround specialists, it is not a dark art.  Businesses are successful because they have a good product; a real plan; a system of control and improvement and control of their cash, businesses fail because they may have a good product but they do not have a real robust plan; have no real system of control and improvement and they do not have control of their cash.  Businesses achieve a successful turnaround because they eventually recognise the position that they find themselves in and take the appropriate action and introduce a real and robust plan; a system of control and improvement, no matter how simple, and control of their cash, before it is too late.

In some overtrading situations, where the businesses are growing rapidly, control can be lost as they did not believe that they needed it.  The sales and money keeps rolling in.  In many situations, we have seen the business hit a wall, when either an unexpected cost arrives (usually the tax bill, but if you do not have a real plan then anything could be unexpected) or when they face a supply problem.  We have seen many situations where a business has one main source of supply for a key component, product or service and when this supplier cannot provide the volume or specification required (or has gone out of business themselves); this has the knock on effect to our business.  This may fall under risk management, but it is common sense management that many businesses fail to address until it comes along to hurt them.  Having one supplier for a key area can prove fatal, indeed one key supplier sometimes can wield too much power over the business anyway.

As any successful and experienced FD would also tell you, a real plan is not only about one area, and it is common-place that the FD is the architect of the plan and its delivery; it is about ensuring that all parts of the business have a plan and the ability to deliver the plan and this has to include;

  • Recognition of where you stand, your strengths and your failings, what are your opportunities and what needs to be protected;
  • A good product/service combined with a marketing plan to deliver the appropriate sales;
  • A good knowledge of key supply and a good supply plan and agreements;
  • An operational and delivery plan, recognising and controlling key drivers in the business;
  • Appropriate recognition of your team development, management and leadership;
  • A budget which includes the key performance indicators relevant to the business;
  • An appropriate financial plan recognising the requirements for long term investment and finance as well as working capital management and short term cash flow;

Recognising the above and how an experienced FD can help and yes that includes the creative marketing stuff as well, when a business is facing financial difficulty it is cash that has to be the key priority and when we start to help this has to be the first area to control.  Sometimes, however, a formal insolvency route of administration or receivership will be required to allow the business to be put back on track, but sometimes a common sense plan will enable a business to right itself without the need for a formal insolvency process.

Some of the areas that a turnaround strategy and plan will include will be:

  • A thirteen week rolling cash-flow dealing with immediate and short term cash flow issues, identifying and managing the pressure points.  It is still remarkable the number of businesses that do not have a short term rolling cash flow plan.
  • A cash plan, breaking down what cash has to be collected weekly from debtors and how; what are the priority of creditor payments and then more formalised revised repayment schedules agreed with key suppliers.
  • A detailed recognition of short and medium term cash requirements and following a draft cash plan, engaging with banks and other sources of credit and lending to bridge the shortfall.
  • Recognition of the break-even position of the business and translation of that into a simple and understandable plan (i.e. the number of sales required a week or the number of conversions needed or jobs needed to be completed every week).
  • Following the break-even review, a plan for staffing requirements with the current and future work.
  • A marketing and sales pipeline made into a simple and realistic plan of hot leads and conversions to sales.  Who are they, where are we with the contract progression (which also recognises the price and profits for the contract) and control of this sales lead flow and reporting.
  • A rolling 13 week marketing and sales plan, what is coming in for the next three months and what marketing initiatives are being put in place for week 13 and onwards.  Having worked in retail this is a very useful, practical and vital plan that addresses every week the initiatives being put in place for week 13.
  • A profit improvement plan, reviewing all key supply and support contracts and where necessary going back out to the market for competitive tenders.  Again the real benefits will be obtained from having a full and detailed understanding of what it is you need and use, volumes, product requirements and when required, to be able to fully specify the tender and obtain realistic tender proposals.
  • A medium and long term plan of what the business needs to develop, following on from recognition of the business strengths, what are the real unique selling points that the business offers and how these areas should be further exploited for the benefit of the business.

We are not saying that business turnarounds are easy or can always be done with a positive outcome in every situation.  Sometimes the business has left the position too long or the market in which they trade has shifted significantly and the business has not changed to reflect that.  In many situations, however, businesses that are failing or are hitting a rough time can be helped and turned around by practical and common sense measures.  The business owner, however, needs to recognise the issue, take a step back and consider what is happening.  Many times the businesses are just doing the same thing over and over again (very zombie like) and with only their fingers crossed expect to see improvements and things change.  This will not happen in the majority of times and a more measured and practical critique and plan will be required.

I think it is fair to say that not all accountants and advisers are the same and some of the areas outlined above do define how a good professional adviser can add real value and support to a business and can help that business to get back on its feet and achieve the success that it first set out to achieve.

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/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

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

Does your Accountant really have the Ability and Experience to Help Grow Your Business?

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Does your Accountant really have the Ability and Experience to Help Grow Your Business?

And we mean really helping your business grow …….

Ask yourself the question; what should a business look for in an Accountant and Business Adviser to provide your business the advice and support it needs to really grow and prosper?

McGregors Corporate can provide the answer and the real difference, Ability and Experience, delivered by innovative and very approachable finance professionals: Ability and experience ….

  • …. to grow and drive your business with the skills of a commercial Finance Director
  • …. to provide strategic marketing and sales opportunities to grow your business organically
  • …. to control and report your business with the skills of commercial auditors
  • …. to obtain finance to ensure your business continues to grow
  • …. to provide innovative tax saving structures with the skills of imaginative tax specialists
  • …. to control and reduce your costs with utility, insurance and other key supplies associates
  • …. to provide innovative structures to protect and grow your wealth with commercial wealth management specialists
  • …. to maximise your wealth and value of your business when the right times comes for you to sell or retire
  • .… and we hope you will enjoy our company over a drink or two,….even if it’s only a coffee.

Our principals’ backgrounds and experience include many years with international accountancy practices and as commercial financial directors.  We have helped start and build businesses; raise funds from banks, private equity and stock exchange.  We have re-structured and re-launched businesses and helped turn around businesses facing trading issues and we have helped business owners maximise the value of their business when the time is right to sell.

Our aim is to provide the quality, experience and range of service of an international firm at the cost of a local practice, all delivered by really nice people.  With McGregors Corporate, our Ability and Experience will prove to be the real difference.

Ask yourself again, does your accountant really have the Ability and Experience to help grow your business?

Steven Mugglestone BA FCA,
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/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/contact-us.html
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659
T: 0121 236 3317

Birmingham Chamber of Commerce Business Finance Surgery returns 6th September 2011

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Birmingham Chamber of Commerce Group in partnership with
NatWest and McGregor’s Corporate Chartered Accountants

Monthly Finance Surgery – Access the finance and advice you need for your business
.

Next Dates
: Tuesday 6th September 2011
Time: 9.00am – 3.00pm
Location: Birmingham Chamber of Commerce, 75 Harborne Road, Birmingham, B15 3DH

The Birmingham Chamber of Commerce Group in partnership with NatWest Commercial Bank and
McGregors Corporate Chartered Accountants is offering SMEs the opportunity to ‘ask the experts’ on a one to one bases about their business finance and funding needs.   Individual appointments are available for a one to one review and discussion with both a commercial and corporate bank funder and commercial chartered accountant/finance director.

Bank funding:
• Choosing the most appropriate funding solution for your business.
• The importance of having a clear rationale for the funding you need.
• Support regarding how a bank approaches the assessment of your funding application

Alternative methods of finance: 

  • How to work with your accountant to explore funding and growth options.
• What to expect from your appointed accountant
• How to get the most from venture capital and small private equity investment.
• How to improve your finance function and how your accountants can be your finance director

This is the opportunity for you to access free consultations and funding reviews and to question the experts on issues affecting your business.   If you are an SME business with T/O above £1m and you would like to register your interest for this event please contact:

Rachel Flanagan
T:         0121 607 1836 

E:        
r.flanagan@birmingham-chamber.com 

Steven Mugglestone BA FCA
www.mcgregorscorporate.co.uk

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/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659
T: 0121 236 3317

steven@mcgregorsbirmingham.co.uk

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