Could your company benefit from fresh input?

 

I have an extensive business background in sales and business development. In addition to working at senior/ main board level in the UK I also have worked in both North/South America and the Far East.

Currently I am working as an independent business consultant and have handled a variety of assignments on both a short and long term basis.

At the same time I would be interested in discussing a “hands” on managerial role where I could more fully utilise my business background and contacts. I would be particularly interested in hearing from companies wishing to diversify or looking to turnaround failing business units.

If you are looking to strengthen your management team then I would invite you to look at my profile at http://uk.linkedin.com/in/gordonblackburn

 or alternatively email me at gordon.blackburn1@btinternet.com and we can set up a meeting to see how best I can assist you.

Starved of Cash

According to latest Bank of England reports lending to “small businesses remains constrained with little change in banks risk attitude”.

Having suffered the consequences of their previous reckless attitude to lending the Banks remain nervous about the prospects for the UK economy.

After the spectacular failure of their previous policies there was always likely to be an excessive over reaction on the part of lenders.

The tragedy for many small businesses is that they are being strung along whilst Banks prevaricate about increasing facilities and in the meantime much damage ensues.

Now more than ever any application for funding must be accompanied with a stand-up strategy together with evidence of strict control over all elements such as cash-flow, debtors and stock turn/ inventories.

In this current climate, the Banks will look to any shortcomings and or operating deficiencies as justification to turn down increased funding and or to reduce or even call in previous agreed facilities.  

The Workshop of the World

For a few decades in the 19th century British manufactured goods dominated world trade.

Most mass manufactured items were produced more efficiently and competitively in Britain than elsewhere.

At the height of its imperial prowess Britain also had the commercial, financial and political power to edge out rivals at home and abroad.

In some industries, most notably textiles, massive changes took place in technology and in the organisation of production causing dramatic productivity growth. This in turn brought a steep decline in prices

For other sectors more modest organisational improvements coupled with greater specialisation and the employment of cheap labour brought similar, though less dramatic, results.

An unprecedented range and variety of products thus came within the grasp of a new mass market both within Britain and overseas.

Fast forward just over 100 years and all of the above factors can be applied to the Chinese economy.

But just as with Britain after an unparalleled boom there is a period of pausing, analysts have now concluded that the Chinese government's target of achieving 7.5% growth this year may be missed.

New export orders are contracting, suggesting external demand for China's exporters remains weak.

 

The true picture is that not only is China's export sector slowing down, but its manufacturing sector is also slowing down. That means the trade surplus is almost gone.

 

After a decade of spectacular growth the Dragon is now pausing to catch its breath.

 

Keep ‘em happy – keep ‘em loyal

 

External factors over which little control can be exerted continue to buffet all business sectors. However, every organisation does have a potentially winning weapon in their armoury namely the opportunity to offer excellent customer service.

 

In these difficult times everyone expects ultimate value for their cash be it the corporate customer or the man in the street.

 

It is a paradox that as trading conditions become tougher and business harder to win the level of service offered by many Suppliers is falling very short of acceptable standards.

 

From the frustrations of automated answering with the intensely irritating muzak accompaniment, to the failure to meet agreed delivery schedules Customers are left feeling that their business is not valued.

 

Little wonder that they choose to vote with their feet.

 

Customer service is not a difficult act to pull off – in reality all that is required is to give the Customer the feeling that their business is important and they are valued, not just “one of a number” or even worse a nuisance.

 

Those businesses that focus on Customer service will emerge from this current difficult period all the stronger.

 

Shark infested waters – don’t fall overboard

 

As the economic downturn continues to bite all businesses and organisations must remain alert to the potential for fraud.

 

Entrepreneurial owners of SME’s are a prime target for fraud as overseeing finances doesn’t always come naturally to them.

 

If a founder is focusing mainly on the product or service being sold, and only minimally on administration, it leaves a business vulnerable to fraud.

 

It is vital to have systems in place to monitor all the company’s finances in a clear and concise format. After all it is never comfortable experience to find that someone is holding your wallet.

 

However all businesses be they independent or large corporations are vulnerable Corporate fraud can take many forms such as invoice kickbacks, sales schemes, bid rigging and the like.

 

It is an undeniable fact that there will always be people trying a variety of ways to “scam” your organisation; it is a problem that will not go away so vigilance is the order of the day.

 

Effective Management in challenging times

 

Working with companies over the past months there is a noticeable sense of demoralisation amongst many sectors of the work force.

 

The causes for this are readily identifiable, many people are struggling with their own domestic finances whilst at the same time the need for increased levels of performance and efficiencies at work have rarely been as intense.

 

It is the responsibility of the Management to ensure that during these times Staff members are encouraged to give of their best.

 

Too many Managers are remote from the day to day activities of their Staff and appear to have the attitude that the people who report to them are lucky to have a job.

 

This mentality is counterproductive. Staff need motivating and incentives do not necessarily have to come solely in the form of financial rewards.

 

Some of the best run and therefore by definition most successful commercial entities are those where the workforce is engaged and feels part and parcel of the organisation rather than merely there to make up the numbers.

 

 

Juggling Jelly

Managing a business in today’s environment is a complex affair – it has been likened to spinning plates whilst juggling jelly. 

Particularly for the owners of SME’s it has never been harder to keep track of the various elements which are buffeting the business. 

Now might be an appropriate time to run a check over those areas of the business most likely to cause problems in the coming months.  

It is a self evident truth that many a crisis could have been averted by timely intervention. 

This is where an independent appraisal can identify areas of potential concern but more importantly the ways and means by which to address them. 

The question that needs to be answered initially is – for how long can I keep all those plates spinning?

 

You can only win it by staying in it

 

Some years ago whilst working for an international corporation I attended one of the bi-annual strategic reviews for senior Group executives. Each executive was required to give a presentation in respect of his/her business unit.

 

One colleague addressed the audience with his one word objective namely “survival”.

 

At the time this was met with a fairly frosty response but current events show that this could be a suitable watchword for the present time. As the machinations continue in the Euro zone and the commentaries become even more emotional with phrases such as “disintegration” and “meltdown” then to survive these times would seem to be a very laudable objective.

 

So many factors are coming into play over which individual companies can do little to protect their interests other than ensure that they react appropriately.

 

However the one certainty is that the global economies will survive and business will continue. In the coming months there will undoubtedly be casualties but by adopting a controlled and rational response to these challenges businesses can ride out these difficult times.

 

Interim Manager / Consultant

Currently mentoring Food Importing Company with their expansion programme.Interested in similar projects/assignments

Don’t bite the hand that feeds you

 

The old adage the Customer is always right has come in for a fair amount of criticism recently and there are many times when plainly the Customer is in the wrong.

Notwithstanding it is of paramount importance to the sustained growth of any business that the Customer is kept onside.

The key requirement that any Customer wants is to feel that his/her business is valued and appreciated.

In business securing the deal is only the start of the process and the repeat order very often stands or falls with the after sales service (or lack thereof).

Simple but effective measures such as ensuring all contracts are performed efficiently and within due time and that any complaints are handled promptly and with courtesy will go a long way to building and maintaining long lasting relationships.

We have all encountered the difficult Customer with whom it would be easier not to deal. However, in these difficult times there are many who would willingly take this “problem” and revenue off of your hands.

 

"Knowing your Customer" means understanding their business

 

In keeping with every financial crisis, the accompanying media reports are always highlighted by scenes of earnest young men and women staring intently at their computer monitors as the latest wave of red flood across their screens. It is familiar shorthand for financial Armageddon.

 

There is no doubting that rapid advances in technology have transformed the way we do business. However whenever we watch the scenes unfold in this virtual world we should never forget that essentially commerce is about people trading together.

 

Whilst Computer “stop loss” mechanisms are the order of the day for “paper trading” the reality of the real world is that goods need to be moved from point of production to point of consumption and obviously this cannot be achieved via a computer terminal.

 

There is an old adage “know your customer,” this dictate has never been more important than in these uncertain and dangerous times. One of the biggest problems associated with the rise of e-commerce has been the accompanying lack of personal contact between a company and its customers.

 

Obviously this is not an issue for an online retailers selling products over the net and being paid via a Debit Card or Pay Pal etc.

 

However, there is an increasing tendency for B2B sales to be concluded by email or even SMS. The personal element has been lost and so has the identity and customer relationship.

The surest way to avoid problems is by knowing your customer and understanding their business. This relationship and mutual understanding is impossible to build and maintain thru a key pad and email ordering system.

 

 

 

May you live in interesting times

May you live in interesting times

 

A combination of recent market volatility, the continuing spectre of failure in
the Eurozone coupled with latest pronouncements from politicians and economists alike have done little to restore confidence and now more than ever is the time for good housekeeping and firm controls.

Rigorous monitoring of counter party risk is the order of the day combined with disciplined inventory control.

Just because a customer has always being reliable in the past is unfortunately no guarantee as to future performance.

Very few businesses fail overnight and there are usually enough warning signals which should enable a supplier to reduce its risk.

Be on the lookout for early warning indicators such as unusual ordering patterns, delays in payments etc.

The coming months will continue to test but undoubtedly there will also be opportunities for those placed to take advantage of less efficiently organised
companies.

Make sure that when the dust eventually settles that your company emerges in a stronger position.

 

 

Speak softly and carry a big stick

  

As funding issues continue to bite more and more Customers are actively employing various tactics to delay payment to Suppliers. Credit control and the monitoring of payments is an increasingly critical element of every business.

 

When a Customer exceeds the agreed payment terms, they are in reality using the Supplier as an alternate (unsecured overdraft).

 

This situation if left unchecked can spiral out of control. In a worst case scenario the Supplier is in reality forced to keep “trading” with the errant Customer for fear of realising a bad debt.

 

Think of the parallel to the ongoing Eurozone situation – it is a slippery path.

 

Slack policing of accounts receivable will have serious consequences. At best tardy payments damage cash-flow and at worst can often be the precursor of a company failing with the end result of a total write off.

 

Take a long hard look at your accounts receivable – are you happy to see 30 days drift into 60 and beyond?

 

Consider the damage that is being done to your company’s financial position?

 

Ask yourself “who is taking advantage of us?”

 

Commercial post mortem – a forlorn exercise

 

All too often in the course of commercial post mortems, the Management and Shareholders of troubled organisations end up asking “how did that go wrong?”

 

It is an incontrovertible fact that many companies fail to address problem issues early enough to avoid an oncoming crisis. When in reality the causes of the problems were all too readily visible.

 

The signs of a troubled business are all too apparent – these include lack of controls, lack of strategic vision, a demotivated workforce and obsolete or valueless stocks etc

 

Instead of grasping these nettles, often the preferred option is to engage in a variety of exercises ranging from ill judged acquisitions (think RBS/ABN), totally pointless projects such as rebranding or the launch of another product range destined to fail for the above reasons.

 

Inevitably the harsh realities come into play but for many companies it is at that stage too late in the day.

 

Gilding the lily

There is no doubt that against the current economic background that some companies are camouflaging their poor performance with some suspect off-balance sheet shenanigans other dubious activities.

 

The fall–out for the Banking community over the “fixing” of the LIBOR rate is not an isolated event. However it highlights how vital it is that Senior Management set clear defined operational and reporting procedures.

 

In many companies the Directors simply do not have the understanding of the mechanics or the day to day activities of the business which they purport to run. This is especially true in the case of many non-exec Directors merely added to the Board on the basis of a “name”.

 

In trading environments it is not uncommon that totally unrealistic profit targets have been passed from Board level to trading departments. No cognisance having been given to the disproportionate risks which need to be taken to achieve these targets.

 

Some of the most spectacular financial flame outs have followed a period of ostensibly highly successful trading. In their desire to recognise these “profits” no thought were given as to how they were being made. In such times it would be well to take note of the old adage that is something looks to be too good it usually is!

 

If your company is bucking the trend in these difficult times it may well be that you are implementing a winning formula.

However history tells us that it is often a prudent course of action to look under a few stones – just in case.

 

Cost effective entry into the UK market

 

The UK offers a very attractive market for companies wishing to export their products. Counter party risk is identifiable and can be successfully managed.

 

However one barrier may be the perception of high operating costs. 

 

There is no doubt that to commission and run a UK operation can prove a costly commitment. The lists of outgoings such as rent, communications, staffing costs are daunting, particularly in a start up situation where income streams are lagging far behind these costs.

 

This is where we can assist you, as an established independent company, we have experience of representing overseas organisations in marketing product into the UK.

 

In addition to opening up new markets for your products and services we can also police the all important areas of logistics and payment of your invoices.

 

An introduction to our activities can be seen on our web site www.glbconsulting.co.uk or alternatively why not contact me at gordon.blackburn1@btinternet.com to arrange a meeting to discuss how we assist you in entering the UK market.

 

Crossing the line

 

The most important component in any business relationship is the question of trust.

 

The ultimate demonstration of trust and good faith is when a Supplier delivers goods to a Customer on Credit terms.

 

It therefore is incumbent on the Buyer that they acknowledge this act of trust and observe the agreed payment terms.

 

With the current pressures it is easy to understand the temptation of “pinching” a few days extra credit but this type of behaviour soon begins to pall. Once a Supplier feels that their Buyer is taking undue advantage the relationship is damaged sometimes irreparably.

 

For any relationship to be sustained there has to be mutual benefit. When a Buyer gains a reputation for persistently crossing the line the merit in maintaining the account is questionable.

 

Diversification –sometimes it turns around and bites you

 
Without doubt one of the most difficult challenges a business faces is diversification. Very often a company is faced with the dilemma of diminishing revenue returns and a tired business model which is either irrelevant or obsolete.

Diversification is seen as the solution to this dilemma. However, the mechanism for achieving this objective can be particularly difficult.

One should always respect geography it may be very tempting to consider that there are opportunities just waiting to be picked up but to underestimate the advantage of local knowledge and conditions can again prove costly.

Mobile phone retailer Carphone Warehouse has agreed to buy out its joint venture partner Best Buy for £471m, giving it full control of its retail operations across Europe.

The joint venture - Carphone Warehouse Europe - operates almost 2,400 stores across Europe.

The joint venture was created in 2008, when Best Buy paid £1.1bn for its 50% stake in the firm.

Carphone said the two companies had decided to focus on their own regions.

The withdrawal marks the end of a costly venture into Europe for Best Buy.

Carphone Warehouse Europe opened 11 American-style Best Buy electronics megastores in the UK, but closed them in 2011 after they lost tens of millions of pounds.

In essence diversification can provide the answer to a company’s need for increased revenue but without a clearly defined strategy it can equally provide another drain on an already embattled balance sheet.