Know when to hold – know when to fold

In business as in poker there are times when discretion is the better part of valour.

Put simply, some of the best business deals are those you turn away.

All organisations operating in today’s climate need to have constant and rigorous focus on their commercial exposure.

Against the current competitive background it is obviously difficult to contemplate turning away business especially from a customer of long standing.

However an objective assessment may well lead to the conclusion that in this instance the business would be left to others.

It may well be that turnover suffers when stricter controls are in place over such elements as payment terms and credit limits.

The reward for such fiscal discipline is obvious. Avoiding defaults by customers not only protects the company’s bottom line whilst allowing focus to be placed on more profitable activities.

KYC- know your customer

KYC - know your customer.

In the US this basically refers to a due diligence process undertaken by Banks and financial institutions to combat fraud, identity theft and general scams.

It is however a mantra that most organisations would do well to adopt.

Rapid advances in technology continue to transform the way we do business. Everyday business tools would have been regarded as flights of fancy not so long ago.With the unstoppable rise of e-commerce come challenges.

One of the biggest dangers is the lack of personal contact between a company and its customers.Obviously this is not an issue for online retaillers selling product over the net and being paid via a Debit card or Pay Pal etc.

However the is an increasing trend for B2B ales to be concluded by email and even SMS.With the loss of the personal contact the identity and customer relationship suffers.The surest way to avoid problems is by knowing your customer and understanding their business.

This realtionship and mutual understanding cannot be acheived via a key pad and electronic ordering system.

Do you want to jump start your business?

Pressures on the business sector continue to mount and this is especially true for those running SME’s.

The need to achieve operating efficiencies has never been more acute. This is a time when a fresh appraisal of your business could return significant dividends.

As an independent business consultant I am confident that I can assist you to ride out these difficult times and build a strong base from which to expand.

Why not drop me an email at gordon.blackburn1@btinternet.com or alternatively check out my video link which will give an insight into my experience:

http://www.youtube.com/watch?v=qvIHWrB5BWI

‘tis the season to be – focussed

In recent times there has been the tendency for the Christmas holiday season to stretch out over a number of weeks and therefore with just over a month to go to Christmas it would seem an appropriate time to consider the implications for business.

Without doubt of biggest concern to SME’s will be the impact on cash-flow. Many companies are operating very close to the edge and any delays in payment could have serious consequences.

In some instances invoices which fall due for payment after the 16^th December could well not be settled until the 3^rd January – giving an at worse scenario of 3 weeks delayed payment.

It would therefore seem prudent to look at your last half December receivables and make a realistic forecast of just how much cash will “come in”.

Similarly with “just in time” inventory it would be sensible to ensure that sufficient stock will be on hand for the early days of January when there will be inevitable disruptions to the supply chain.

Trying to get things done in the UK during the latter half of December will undoubtedly prove to be a challenging task so it would be best to ensure you are positioned accordingly. 

As always, the usual suspects - fear and greed

Currently with all the talk of gloom and doom in the financial markets, fear is the overriding factor with a sense of panic gripping many operators as witnessed by the sell-off in Thomas Cook stock Tuesday which saw the share price plummet by nearly 80%.

Politicians seem to be hell bent on outdoing each other as to who can send out the direst warnings.

Now is the time to remain focussed and consider the implications for your business.

Just as was evidenced during the credit crunch crisis in the summer of 2008 there is a question mark over the manner in which the Banks will respond to the current inputs.

The problem for the Banks is that because of the legacies of their previous mistakes they are effectively stifling their customers businesses as they look to batten down the hatches and strengthen their own balance sheets.

It will become increasingly difficult to gain support from the Banks in the coming months therefore it must be the absolute priority to keep a strict rein on your finances – make sure that your Debtors Book is strictly controlled and ensure that Stock turn and inventory levels are well policed.

With their houses far from in order, the Banks will undoubtedly become increasingly conservative in their approach to lending, so the order of the day is work within your current limits and maximise your profits.

The ostrich school of management

How often do we see that by ignoring obvious problems the Management and Shareholders of troubled organisations subsequently end up asking “why did that go wrong?”

It is simple, a large number of companies fail to address problem issues early enough to avoid an oncoming crisis.

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 totally pointless exercise such as a rebranding exercise or the launch of another product range destined to fail for the above reasons.

The operating style of such companies can be likened to the exercise of rearranging deckchairs on the “Titanic”

Timewasters? – the bane of a Consultant’s life

The life of a Consultant is certainly not without its frustrations but undoubtedly the most irksome is the prevalence of the timewaster.

A typical scenario - contact is made by a company who wishes to engage the services of a Consultant to address the problems within their organisation.

The Consultant spends time studying the brief and formulating a strategy for tackling these problem issues.

At the end of this initial process (often involving a series of meetings) it appears that its all systems go - then the Client goes cold - the timewaster has reared his head again.

It is an all too familiar story - the troubled company appreciates it has problem areas but when faced with the implications of an objective assessment it is all too easy to duck the issue and try to muddle through.

The downside for the troubled company is this fudging of the issue will in most cases signal the slide into administration and or liquidation.