What's in a name?

 

Following the financial crisis of 2008 there was much talk of a collective reigning in and return to the principles of sound business.

However memories are short and it is never long before the blurring starts again and risky practices again become more and more the norm.

There is now a concerted move afoot to rehabilitate the image of leverage. This was the mechanism which more than any other precipitated the disaster in the financial system.

Companies no longer speak of leveraged deals but are now taking on “sponsor finance”.

This re-branding has in-built danger as witnessed previously, complacency has resulted in the demise of numerous organisations.

As George Santayana commented “those who cannot remember the past are condemned to repeat it”.

Gilding the lily

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

Directors of many companies simply do not have the understanding of the mechanics or the day to day activities of the business which they purport to run.

The classic example of this being the gross mismanagement and ineptitude at the Co-op Bank. This lack of commercial expertise has been especially true in the case of non-executive directors.

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

However history tells us that it is prudent to implement some rigorous analysis in order to avoid any unpleasant surprises.

If you keep them happy, you keep them 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 companies that focus on customer service will build an increasingly stronger business.

 

Low cost access to 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 operating costs such as rent, communications, staffing are daunting, particularly in a start up situation where income streams are lagging far behind these up front out goings.

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

“Showrooming” an increasing problem for retailers

 

With the rise of online shopping retail chains do not need as many stores as they did in the past, a trend that looks set to accelerate this year.

Customers are becoming ever more savvy in looking for value for money, employment is tight and also we've seen a massive growth in the supermarkets in terms of non-food retail.

Now further adding to the problems of the “bricks and mortar retailers” is the rise of “showrooming.”

Essentially this is customers going into a shop to browse but in reality an exercise to check out goods and then search on line for a more competitive deal.

The growth of online shopping is a juggernaut now accounting for 12% of retail sales - and forecast to be at least 30% by 2020.

Those retailers who fail to exploit all areas of multi channel marketing whilst finding themselves saddled with the burgeoning costs of maintaining retail outlets will continue to suffer.

Biting the hand that feeds you

One of the oldest sayings in commerce was “the customer is always right”.

However in truth 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 that all transactions / 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.

Every business will have its fair share of difficult customer with whom it would be easier not to deal.

However, in these competitive times there are many who would willingly take this “problem” and revenue off of your hands.

 

Taking it too far

 

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 called into question.

Consistently delaying payment is a short sighted policy which can often lead to the loss of a valuable supply source.