Banking practices – not in my name

The latest revelation to further damage the credibility of the banking system comes with the report that RBS (which is 82% owned by the tax payer) have according to a report submitted to the Business Secretary “forced vibrant businesses into financial trouble only to profit from their distress by squeezing them for exorbitant fees and charges and ultimately seizing their assets to swell their own vast property empire”. It is a damming indictment.

Following on from the financial chaos precipitated by the banks own negligence and poor management it has become increasingly difficult for businesses particularly SME’s to gain or in some cases maintain funding from the banks.

As the banking community sought to repair their damaged balance sheets they have resorted to any means both fair and foul to generate income.

This latest example follows on the heels of other misdemeanours such as PPI miselling, rigging of LIBOR and currency rates.

Contrast the actions of the banks with those of merchants and suppliers whose business is supplying goods to customers on credit terms.

Unlike the banks these companies rely on a simple mechanism of payment, an invoice.

Goods are delivered and are due for payment on a specified date it is the ultimate statement of trust and as such should not be abused.

 

Still on life support

With talk of the timing of increase in interest rates the Bank of England are ever mindful of the spectre of the so called “zombie” businesses.

 

Latest reports suggest that there are as many as 432,000 companies in the position of generating only enough cash with which they can service their loans and continue to trade.

 

This figure equates to roughly 1 in 7 companies, a rise of 16% from 3 years ago. It is estimated by solvency experts that up to 4000 could fail following a modest 0.5% rise in interest rates.

 

In reality there are many businesses stagnating - being kept alive by the forbearance of banks, rather than being shut down as they would have been during previous recessions.

This has prevented the “natural shake-out” which normally accompanies recession.

Until such times as the UK economy presents itself with a more robust backdrop it is unlikely that the Bank of England would take the risk of lifting rates.

 

Shark infested waters - don't fall overboard

 

In the present economic climate all businesses and organisations must remain alert to the potential for fraud.

Tens of millions of UK email users could be targeted in 'mass spamming event' designed to harvest their financial details the UK National Crime Agency has warned.

Small and medium businesses are particular targets of messages that appear to be emails from banks, the NCA said recently.

Emails contain attachments that look like details of suspicious transactions are actually malicious software that encrypts user's computer allowing fraudsters to harvest sensitive information and access bank accounts.

 

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 essential 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.

 

All businesses be they independent or large corporations are vulnerable.

 

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 should remain the order of the day.

 

Sound management principles

In order to achieve success all organisations must have effective leadership. It is the responsibility of management to lay down a set of ideas and objectives that are articulated, understood and supported by the workforce .Good people do not like working for organisations whose values are muddled.

Managers have to take difficult and unpleasant decisions. These often need to be made swiftly balanced against conflicting demands. It is not always possible to access cast-iron evidence to support the decision making process. This is one of the tests of strong management.

A clear and defined vision are essential requirements. Managing a large company, and dealing swiftly with a variety of challenges and issues is a complex task.

The desire to succeed which provides the drive and focus on excellence is one of the hallmarks of a good manager.

The workforce is the company’s most precious asset. Accordingly the ability to judge people and value their contribution is an essential prerequisite for any manager.

To build a talented team requires working with people who may be better at their job than you are at yours, and to guide and motivate them. People learn far more about the art of leadership from a good mentor than from any course or training exercise.

The ability to respond quickly will prove invaluable when things go wrong. Surviving a reverse and changing direction is the utmost test of resilience and flexibility.

What if your sat nav malfunctions?

One of the most valuable assets available to any organisation is local knowledge.

 

How many times has a venture ended badly owing to a basic failure to understand and deal with local market conditions?

 

The UK is a mature and sophisticated market and though offering different challenges to operating in a 3rd World destination there are still obstacles in trying to establish a presence.

 

Operating overheads present a crucial challenge and this is where we can assist you to achieve a cost-effective solution to marketing your products in the UK.

 

Take a look at our website www.glbconsulting.co.uk

 

Or check out our video link http://youtu.be/ruUtQnlJwVM

 

Driving your sales

There are some basic tactics which you can employ to increase your sales.

Companies that are increasing their sales turnover usually have an attractive staff incentive programme in place. Make sure you keep track of what type of “carrot” your competitors are offering to their sales force.

Upselling is a cost effective way to boost bottom line returns. Essentially, upselling involves adding related products and/or services to your sales portfolio and making it convenient and necessary for customer to buy them. Crucially when upselling the customer has to be persuaded of the benefit.

Give your customers the inside track. Try to stay ahead of the competition by having up to date brand and market information combined with technical back-up. For example if a new product launch is imminent it is better to keep the customer’s interest “warm” rather than push them into a purchase which they shortly will become dissatisfied with.

Differentiate your customers. There should be a clear and obvious difference between your regular customers and others – a difference that your regular customers perceive as showing that you recognise and appreciate their value.

Repeat business is the life blood of any sales force. Loyalty cuts both ways and becomes meaningless if all customers are treated as “someone off the street”.

 

Battling for the customer - the ongoing battle of clicks v bricks

Amazon is predicted to be 9^th biggest retailer in the world by 2018 but has no stores.

The Group reported sales of US$ 15.7 billion for the quarter ended 30^th June which generated a net loss of US$7 million.

In the UK the impact on leading High St retailers has been devastating. Groups such as Comet has disappeared and HMV have gone into administration. Amazon now has just under 25% share of the UK entertainment industry.

Obviously they are playing the long game and of the keys to their future strategy is the latest buzzword "personalisation".

bbThis is the mechanism of presenting customers with tailored, relevant content as they shop and in doing so increase conversion and generate loyalty

Despite the increased usage of this technology, it is still relatively new to the market but will undoubtedly evolve to become a prime factor in driving the future of ecommerce.

More ecommerce companies are devoting increasing resources to develop personalisation software.

Several leading brands are assigning more internal resource to creating a truly personal customer experience by appointing teams of ‘personalisation experts’.

As with traditional retailers ecommerce companies are now placing greater emphasis on using real insight to make customers feel like valued individuals as they spend time shopping on line.

All of this blurs the traditional lines and retailers face a common problem delivering what the consumer demands efficiently and free of delivery charge at prices which reflect ever squeezed profit margins.