Chamberlain McBain News Blog
You’ve done the seemingly impossible and what can be the undoing of many small businesses – you’ve made it through the first year, or maybe the first two or three. Your small business is moving along and its outlook is bright and positive.
While some businesses experience rapid success in the first few years, others will experience a slower pace of growth; potentially even feeling like someone hit the pause button on their growth chart. So how can you take your business and its profitability to the next level? Consider the below three things which although may seem simple, can be very effective when helping to cultivate success for your small business:
- Take risks and experiment – While sticking with the status-quo can feel comfortable and secure your business is unlikely to suddenly increase its profit margins tenfold if you simply keep doing the same things in the same ways. A certain amount of risk is imperative to a company’s growth. Experiment with different marketing and advertising. Consider different ways of structuring your business – is your business model scalable for your growth plans?
- Know what works and what doesn’t –It’s important to understand your market and what has been working for you. Even more important is to know and understand what has not worked for you in the past. Where do your customers come from? What has been your biggest business wins historically? Focus on the sources of these and channel your business’ energy and revenue into these aspects. Continually monitor, review and refine. Always make sure that you learn from any mistakes along the way too.
- Continue to learn and develop. Be ambitious and have a clear vision – Stay abreast of your industry and your market. In today’s modern world technology and society is moving at a fast pace. Businesses need to stay relevant in order to stay meaningful and useful. Be determined to achieve success and have a clear path and vision for how you’re going to achieve it.
Statistics from back in the 1990’s had UK households at their most solvent. Fast-forward to today and the story is a lot different with the number of people taking out individual voluntary arrangements hitting a six-year high during the second quarter of 2018
There were 28,951 individual insolvencies recorded during the 2018 second quarter, which is an increase of 4.4% on the previous quarter and 27.3% on the same period last year. Across the UK it was Stoke-on-Trent who returned the highest number of personal insolvencies during 2017, ranking above those towns coming in second, third and fourth - Plymouth, Hull and Scarborough respectively.
An individual voluntary arrangement, or IVA as they’re abbreviated to, sees debtors agree to repay their creditors some or all of what they owe. High inflation, limited wage rises and cuts to benefits are singled out as being key contributors to this all-time high.
President of the insolvency trade body R3 Stuart Frith comments that: “There are plenty of reasons why people might be feeling the pinch. Wage growth is barely higher than inflation after a long period of real wage falls. Although unemployment is low, there are more people earning variable amounts in the gig economy, which can make budgeting difficult. Meanwhile, outstanding consumer credit volumes have been growing, as has the average amount of debt per head.”
With the Office of National Statistics recent report detailing how the average British household is spending £900 more than they are earning, it seems as those personal insolvency figures will only continue to increase unless there is a major change.
The Bank of England is expected to be raising interest rates in the coming weeks which analysts are hoping will encourage Britons to save more as well as having a positive knock-on effect for households overall finances. But as StepChange’s Chief Executive Phil Andrew comments, “the reality is that too many households, here in Britain, in 2018, simply cannot make ends meet, however hard they try.”
The latest release of the Central Government spend with SME’s over the 2016/2017 period show that the UK government are leaving a lot to be desired when it comes to working with small businesses. The data shows that small businesses won just over 20% of the central government’s business last year which was down 24% from the previous year.
With the official target of 33% of public work to go to SMEs by the year 2022, The Federation of Small Businesses (FSB) suggests that those larger government contracts and procurement jobs be broken down into smaller contracts and follow strict guidelines when it comes to the payment terms between government and SMEs.
The collapse of Carillion in the beginning of this year provides further ammunition when it comes to the case of spreading government procurement spend across multiple businesses as opposed to relying on one main contractor. The demise of Carillion, the facilities management and construction services giant which played a major role in many large-scale government contracts, reportedly cost UK taxpayers an estimated £148m. When the company went into liquidation, Carillion was reported to have around 420 UK public sector contracts, employing over 11,500 workers.
Chair of the Public Accounts Committee, Meg Hillier, bites back saying that "my committee is looking at the wider relationship between government and large suppliers. There are 27 other companies with large contracts across government. We need to really examine this relationship between these large outsourcing companies and government. We'll be talking to those big suppliers over the next few weeks and publishing our findings by the summer."
National chairman of the FSB Mike Cherry says however that the UK government is simply “wasting taxpayers” money when just hiring big firms. “The latest drop in central government small business spend shows urgent action is needed. Smaller firms need to be given every chance to compete and secure public contract opportunities. Opening up the public service market is a win-win for everyone involved in the supply chain because when small businesses are used effectively, they are able to create jobs and growth.”
For more information or to view the Central Government Direct and Indirect Spend with Small and Medium-sized Enterprises 2016/17 Transparency data, visit: HERE
BTO LLP associate Lewis Richardson recently wrote an interesting article published the Scottish Legal News in regards to the decision from the Sheriff Appeal Court in the case of Cabot Financial UK Ltd v Gardner and Ors,  SAC (Civ) 12. Three cases all relating to debt recovery for assigned credit card debts were raised under the simple procedure which applies to monetary claims of less than £5,000.
With 17 different appeals pending, Cabot had previously had cases dismissed because they were unable to provide relevant documentation to the claims. With this track record, the sheriffs pertaining to these reported cases requested the claimant to provide documentation even on undefended claims. However, with the common school of thought that undefended claims equal an automatic acceptation of a payable debt, it begs to ask the question, is this a power play by the sheriffs?
The simple procedure rules do encourage judicial intervention and as Richardson comments, “in the words of the Sheriff Appeal Court, a more inquisitorial approach to be taken.” With this in mind, it seems as though the sheriffs have taken it upon themselves to inquire just that little bit further, making requests for documentation even in these undefended cases. But did the Sheriff Appeal Court see this as warranted and welcomed? No, they did not; instead deciding that the sheriffs had gone too far when they ordered Cabot to produce these claim documents.
Richardson also touched on the thorny question of expenses and in partuclar, in relation to party litigatants; "One of the key goals of simple procedure was to make it straightforward for party litigants to raise and conduct without a lawyer, thereby limiting expenses. However, expenses arguments continue to abound. It is therefore perplexing that to understand the position on expenses a litigant would require to examine the rules, primary legislation and a statutory instrument and, even then, they may be none the wiser!"
He goes on "There have been several reported and unreported decisions on expenses which illustrate the fact that expenses questions are continuing to pose difficulties for both practitioners and the judiciary. If simple procedure is expected to be understood by party litigants then it cannot be desirable for them to require to consider not only the rules and statutes but also case law."
In summarizing the article and in reflecting on the lessons learned from these cases, Richardson comments that “the case outlines the limits of shrivel power in undefended claims. It is striking that a simple procedure case has resulted in a 40-page judgment from the Sheriff Appeal Court addressing this fundamental point…. If this suggests to you that simple procedure is turning out, in some respects at least, to be less than simple, then you would be correct… The rules are developing and the Scottish Civil Justice Council, who drafted the rules, recently closed a consultation in which it sought views on how the simple procedure rules were working in practice. Whether this consultation will result in any amendment to the rules remains to be seen.”
While the news that Barclays is planning to move between 40 and 50 investment banking jobs from the UK to Germany shouldn’t come as a shock, it does go against views which were previously expressed from the banks CEO back in May 2017. Barclays’ chief executive Jes Staley commented that he saw no reason as to why any British jobs at the top UK bank should have to shift to Europe at all as a result of Brexit. “We do not currently see a need in our options to shift British jobs or significant operations elsewhere”… oh what difference a year can make.
The German financial capital of Frankfurt will be the primary location for the shifted Barclays investment banking jobs. Although the positions would technically be employed from their Irish unit based in Dublin, the positions will most likely be filled by candidates based locally in Frankfurt, and not necessarily British citizens relocated from London.
Dublin, Frankfurt and Paris are the top three cities which seem to be benefitting currently from this financial services shift as a result of Brexit. Goldman Sachs is said to be splitting their EU focused team between Frankfurt and Paris, HSBC is said to be favouring Paris and JP Morgan will soon be settling 1,000 staff in Dublin.
The news comes simultaneously with the latest release from the Office for National Statistics on the current productivity Statistics for the nation. No surprise really that the economic output per hour or work has dropped in the UK by 0.4% in the first quarter of 2018. Chief economic adviser to the EY Item Club Howard Archer comments that “there is a risk that extended uncertainty and concerns over the UK’s economic outlook could end up weighing down on business investment and damaging productivity. Prolonged difficult Brexit negotiations could increase this risk.”
Good cashflow is important for any business, but for small businesses, it can be more critical than it is for large companies. With leaner financials, small businesses can carry a fragile backbone. Business operations simply can’t continue for long without a steady stream of income and so access to cash and credit is essential. If you’re not being paid on time and are constantly having to issue reminders and chase late payments, a strain is undoubtedly being put on your small business, hindering it’s growth, its development and ultimately costing you money in the long run.
Time is of the essence when it comes to debt recovery and debt collection. Staying on top of your business’ credit control function is paramount. Make sure you’re keeping accurate and up to date reports on who owes what and by when. Keep on top of those customers that have a history of late payments. You never know what is going on behind closed doors and dependant on your debtor’s situation if you wait too long to try to recover your unpaid money they may have even already shut up shop. Plus, the more time you wait then the more frustrated and strung out the situation becomes. Debt collection techniques that are centred on a cool, calm and collected approach are always the most successful.
If debt recovery is on your mind and you think you’ve exhausted your ability to get the end result that you’re looking for, speak with the team at Chamberlain McBain. As professionals in the debt recovery industry, Chamberlain McBain is a cost-effective option when it comes to debt recovery, charging only for the work carried out, and never charging commissions. Interest and compensation (where appropriate) are calculated and added to the sums due to you without charge and the free online portal allows you to keep an eye on each of cases.
Chamberlain McBain will work with you to begin the formal debt recovery process and to help ensure your small business cash flow is doing just that – flowing.
It’s a tough pill to swallow but in the world of business, sometimes it needs to be done. In a drastic attempt to save House of Fraser in the long run, 31 of its 59 department stores will be closing their doors in the early part of 2019. This plan of action comes out of a company voluntary arrangement, or CVA, which although being deemed as “unpopular”, is a necessary step to ensure the department store giant can and will continue to operate for years to come.
It is estimated that a total of 6,000 jobs will be axed as a result of the department store closedowns which sees some big stores including London’s Oxford Street, Shrewsbury and the Cardiff store, which dates back to 1856, shutting up shop. Landlords from affected stores across the UK have been outspoken in their dislike of the rescue plan which has Chinese owner Yuan Yafei planning to sell a 51% stake in the business to C.banner, another Chinese company who promises to inject £70m into the business.
Chief Executive of Naissance Capital Real Estate, Azeemeh Zaheer, the estate agent who owns the House of Fraser’s Cardiff branch has confirmed that he was “shocked” when he found out the night before the CVA plan was made public, that their Cardiff store was on the chopping block. Zaheer goes on to comment that they had been open to various options which would help the store stay open, including drastically reducing the floor size. “We had been discussing reducing the floor plate of the store and spending money on architects and surveys so we could create a viable shop for them to trade out of.”.
Unfortunately, the news of these House of Fraser store closures isn’t anything new. Media reports have been flowing thick and fast in recent times of retail store giants such as Toys R Us shutting up their high street shops. Rises in internet shopping, increased business rates/council taxes as well as a decrease in overall spending by consumers, mean that times continue to get tougher and tougher for those running physical stores made of bricks and mortar.
Add this date to your calendar; Friday 22 to Sunday 24 June 2018 and get together for The Great Get Together.
Inspired by Jo Cox, the British Labour Party politician who was tragically murdered in 2016, The Great Get Together encourages people to do just that; to get together with the people around you in a bid to foster feelings of community and support in a world that can sometimes leave people feeling disconnected and alone. The Great Get Together invites people to sign up and host a get together in and around their local community or to join one that is already happening near them. A picnic, a BBQ, a morning tea; the get together can be packaged in any way, but the end results of bringing people together are ultimately the same.
So how does this relate to small businesses I hear you ask? With more and more people deciding to venture into the world of self-employment, remote work, or the wearing of many hats in their own small business, research from the Federation of Small Businesses (FSB) shows that isolation is one of the top three difficulties that self-employed people face. Furthermore, a March 2017 report from Aldermore, a retail bank providing financial services to UK SMEs, found that 39% of self-employed respondents said they had felt lonely since becoming their own boss.
FSB’s National Chairman Mike Cherry comments, “We welcome and support The Great Get Together and other work the Jo Cox Foundation is doing to tackle the UK’s epidemic of loneliness. Loneliness can damage our economy by around £32 billion per annum and cost employers an estimated £2.5 billion a year. Loneliness can diminish productivity and creativity, both of which are so vital to the success of the small business community. A community which accounts for an annual turnover of £1.9 trillion a year – 51 per cent of all private sector turnover in the UK.”
For more information or to signup online, visit The Great Get Together’s website: HERE
There’s no denying that the world of cash is becoming less and less. In fact, it’s probably only a matter of time before the wallet or purse of generations to come have never even seen a £10 pound note or a golden pound sterling coin. It used to always be about the plastic, with customers pulling out their credit or debit cards to pay for purchases in-store. However these days it’s more about the whipping out of a smartphone as that physical connection between money and purchasing becomes less and less connected with the continued rise of contactless payments.
According to recent Worldpay figures, in-store transactions made via a contactless mobile device method has increased by an astronomical 328% - that’s 126 million transactions with a value of over £975m. Worldpay comment that a third of UK customers are using their smartphones to make payments in shops, with supermarkets being the highest on the list, followed by bars and pubs. Furthermore, Barclaycard’s “Time is Money” report proposes that “touch and go” spending will continue to increase to 317% by 2021., with 40% of contactless payment retailers expected to be completely cash-free within the next five years.
Barclaycard first introduced their contactless payment offering in 2007 and every year has seen an annual increase in contactless spending. The latest growth figures show the top 10 cities outside London to be spending via contactless mobile payments:
- Belfast – 60%
- York – 59%
- Newcastle upon Tyne – 56%
- Norwich – 54%
- Stockport – 54%
- Guildford – 53%
- Coventry – 53%
- Edinburgh – 53%
- Exeter – 53%
- Glasgow – 52%
Barclaycard Mobile Payments Business Development Director Adam Herson, comments that “the surge in popularity of wearable and mobile payments creates exciting opportunities for shoppers and brands alike. Consumers can now choose the type of accessory or device they want and match it to their lifestyle or fashion taste, all while enjoying the speed, ease and convenience that contactless brings.”
For more information or to read the Barclaycard’s Time is Money report in full, please visit: HERE
Our Mr Murphy is heading off to New York tomorrow, taking students from Dunbar Grammar who won the Seniors Section of the School Mock Court Case Project. Joining them in New York and presiding over the case in the New York Federal Court is fellow Trustee, The Rt Hon Lady Dorrian, Lord Justice Clerk, who has issued the following:
"It is a great pleasure to me to support the Mock Trial Project as one of its trustees and to be involved in judging the international moot which will take place between Scottish and American school students, in the Federal Court, New York. For the students, this presents an amazing opportunity. The Scottish participants have already had the chance to try out their skills at home and gain considerable insight into the operation of the civil law in Scotland. Now they have the opportunity of doing that on an international stage, where they will learn something of the American, and in particular, the federal, legal system. Apart from having to prepare and conduct their case, the students have a packed programme of events. They will have the opportunity to spend a day at an American High School, to compare the experience with their own school in Scotland, and to tour the United Nations headquarters. It is hoped that it will be an unforgettable and enriching experience for them. For my own part, it is a pleasure to help the students learn about, and develop an interest in, Scots Law. We know that there are now law students whose first exposure to law as a career came from their involvement in the Mock Trial Project. It is also of great interest, and value, to me to spend time with judges from another jurisdiction."
The Mock Court Project is a registered charity, and we would not be able to run such exciting programmes were it not for the generosity of our sponsors."
In addition to Chamberlain McBain, the charity is supported financially by the likes of Brodies LLP, Ernest Cook Trust, The Gannochy Trust, the WS Society and the Chartered Institute of Credit Management.
It seems 2017 was a tough year for many people in the UK and even more so for those in Scotland. With a 25 year history, in 2017 the non-profit UK organisation StepChange Debt Charity, witnessed the highest number of people contacting the organisation needing a helping hand in their personal debt matters… a staggering 620,000 people. 20,000 of these were in Scotland.
Overall statistics from the report concluded that although there has been a decrease in the debt average in Scotland by 1.5% (from £12,677 in 2016 to £12,488 in 2017), this decrease still sees the overall debt average higher than in years before. With lower average net incomes in Scotland comparative to the rest of the UK, those in Scotland have approximately 10% more debt than the rest of the charity’s UK clients. More plainly put, for every £1 of monthly income StepChange’s Scottish clients received, they also had £9.96 of debt.
The report summarises the economic trends and societal happenings that give way to these findings, and it’s pretty much the same, usual suspects. People’s income may be increasing but the increases in the overall costs of living are still way out in front as they continue to rise at an insurmountable rate.
The report findings specifically include:
- Disposable income is becoming less – although there have been increases in the average Scottish monthly income (5% over the last 5 years), rises in inflation supersede it.
- Those essential costs of living aren’t getting any easier – with stagnating income and the ever-rising essential costs of living, the debt gap continues to widen for everyday Scots. Surpluses in household budgets are also getting squeezed; in 2013 this amount sat at £24 per month, in 2017 it’s down to an average of £15.
- It’s a renting market – true homeowner numbers are fewer and the number of people with household tax in arrears continues to grow. Council tax arrears sit at the top, with 45% of households experiencing this pinch, followed by electricity arrears at 37%.
For more information or to read the StepChange report in full, please visit: HERE
It seems like the ring is being reset for another round in the fight for Scottish Independence, and this time a different economic angle is being bought to the debate. The recent release of The Growth Commission Report, commissioned by Nicola Sturgeon’s Scottish National Party (SNP), proclaims that Scotland’s independence could boost the country’s economic growth, ultimately making the people of Scotland £4,100 richer every year, all for a price-tag of around £450m.
At the centre of this reinvigorated drive and refreshed determination from the SNP is the promise that the pound sterling will stay firmly in the pocket of Scots for at least 10 years after their independence day comes. This does mean that Scotland would have their hands tied by the Bank of England’s monetary policy, but it is a major differing factor from those plans laid out prior to the 2014 referendum, and one that the SNP hopes has a major impact on the outcome of round two in the Indyref battle.
The Growth Commission Report comments that Scotland would only move to its own currency once stability in the independent country has been achieved. Measurable factors for this include the establishment of a solid Scottish central bank, stable foreign exchange rates being accomplished, and certainty among businesses being achieved.
Finances of an independent Scotland would be sustained through population, participation, and productivity. For the population, it seems the grass is greener in Scotland and a further key message of The Growth Commission Report is that Scotland immigration campaigns would be scaled up. Tax cuts would be offered for those living and working in Scotland on highly skilled migrant visas with an aim to grow net contributions and in turn, taxpayer contributions. Society inequalities such as gender pay-gaps would be squashed, helping everyone in Scotland to participate in a newly independent country. Exports would be focused on for the productivity arm.
At this stage, you might be thinking “what about the oil?” – a definite feature in the 2014 whitepaper. This time around, money from oil and gas is being put firmly into a "fund for future generations".
So, four years on and it seems a lot has changed in this economic debate for Scotland’s independence but is it enough to win over those previous sceptics? The SNP are sure hoping so.
For more information or to read the Growth Commission report in full, please visit: HERE
As we sit and read the latest news article to hit the press about how the Lloyds bank CEO is paid 95% times that of one of their average bank workers, the words “ethical banking” or “fairness” definitely float into the forefront of mind.
It’s recently been released that in 2017 António Horta Osório, CEO of Lloyds Bank, took home a pay package of £6.4m, which was already up 11% from her 2016 package of £5.8m. This came to be highlighted after the advisory group, the Institutional Shareholders Services (ISS), found a bonus stricture in play which has been described as being “complex” as well as there being a “lack of clarity in the company’s public disclosures on how bonus outcomes are actually determined”. The ISS states that “although pay ratios have not been disclosed, ISS has calculated that the CEO’s pay is 95.0 times that of the average employee in the organisation.”
Screams for banks to operate in a more open, public, and fair manner can be heard from any direction you turn. Transparency is the name of the game. Insert Ethical Consumer, a not-for-profit and independent co-operative which have created an ethical rating system not just for banks, but for a range of more than 40,000 brands, services, and products.
So in the world of finance and banking, which banks have been given the thumbs up? While it might not come as a surprise that the big bank Lloyds doesn’t feature, neither do some of the other large players such as Royal Bank of Scotland/NatWest, Santander, and HSBC; none of these guys achieved more than five out of the possible 15 points that Ethical Consumer have on their rating system.
On the positive side, physical and online/app based banks such as Monzo (who took out the top prize), Ecology Building Society, Royal London, Aviva, Triodos Bank, Charity Bank, Co-op Insurance, and Ecclesiastical Insurance all rated highly.
For more information on the Ethical Consumer app, visit HERE
Finding new customers can often be a difficult task for any business, but for SMEs, it can even be a seemingly harder task than what it is for the big guys. You don’t have access to a mountain of budget to spend on big advertising and marketing campaigns, and ultimately your reach can be pretty limited.
However, with the rise of social media marketing, small businesses all over the globe have been given a leg up. Those challenges of getting in front of new audiences have been drastically reduced specifically with the rise of social media. The likes of Facebook, Instagram, LinkedIn and many other social media platforms can easily provide a small business in Edinburgh or Birmingham with a direct connection into an audience anywhere in the UK, and in fact, anywhere in the world.
A recent addition to the Facebook paid advertising arsenal are their cross-border tools, which help businesses of all shapes and sizes find new international customers easily and quickly. By using Facebook “lookalike” audiences, businesses are able to use the profile information of their existing customer base (ie. those people who already like and follow their company page) to find people who are similar in terms of their age, demographics, interests, and a whole lot more.
“But why would a person in the Netherlands be interested in buying my product from my shop here in Manchester?” you might ask. It’s not new news that audiences are becoming more global, and therefore are becoming more open to purchasing things cross borders. Heck, ordering online and waiting by the post box for your purchase to arrive is becoming more and more standard day. Sure, it might not be applicable to those SMEs who are selling a physical service (you can’t post a manicure let’s face it), but it is very applicable to those SMEs in the products or even online service base.
For more information on the capabilities of Facebook advertising visit HERE
Last week we reported on the news that even after a positive profit result for the first quarter of 2018, the Royal Bank of Scotland (RBS) still planned to be closing a number of their UK branches. As more and more people move to online banking, the number of walk-ins and in-store queries have drastically dropped over the last four years, with the RBS reporting that they’ve experienced a 40% decrease in the number of their customers who visit branches in person, while their mobile transactions have increased by 73% over the same period.
While it’s one thing for you and I or any other individual to manage their banking through internet banking or their bank's app, it’s another thing to have such a minimal touch point if you’re also using the business banking side of things for your small to medium enterprise.
The Federation of Small Business (FSB) conducted research in 2016 on the impact of bank branch closures for small businesses, and while the research and findings may have been released just less than two years ago, it is of the opinion that the key impacts are still key impacts experienced in the present day.
Those small businesses which formed part of the focus groups recognised they experienced impacts on:
- Communication – From the get-go, small businesses expressed feelings of a reduced amount of communication between them and their banks. Initial letters and notifications of their local branch closure were often minimal and often didn’t provide enough information on how and what the effects would be and where they could turn to.
- Support and advice – For any small business, the advice and support which is offered by advisors in local bank branches can be extremely valuable. Being able to speak to someone in person offers a wealth of psychological support that over the phone or virtual advice can’t contend with.
- Cash access and availability – Small business customers noted that they experienced limited access to cash when bank branches close, as well as making it harder to find ATMs in the areas where they once were. Many small businesses also commented that they were forced to keep larger sums of money on the premises as they were not able to bank this as regularly as before a local branch closed its doors.
These were just three of the key findings. You can read the complete report by visiting HERE
Reports and stories of the Royal Bank of Scotland (RBS) closing one in four of their branches were coming out thick and fast only less than six months ago. The main instigator of this need for RBS to close 259 of their branches (62 Royal Bank of Scotland and 197 NatWest), and cut approximately 680 jobs? The favouring of online banking amongst in customers as opposed to the traditional walk-in methods.
In fact, RBS reported that the use of branches by their customers had fallen 40% since 2014 with an RBS spokesperson commenting that “more and more of our customers are choosing to do their everyday banking online or on mobile. Over 5 million customers now use our mobile banking app and one in five only bank with us digitally.”
But since then, Q1 profit figures have been released and what a turnaround they have seen. RBS has returned a positive profit result, actually a £1.2 billion profit result. However, there has been no word of a turnaround from RBS, no word of a reduction of any of those branch closures.
National Chairman of the Federation of Small Businesses (FSB) Mike Cherry comments that “with RBS’ finances improving, it’s disappointing to see the majority taxpayer-owned bank continuing to reduce in-person support for the public. Local businesses rely on local bank branches, as do their customers.”
Relationships with their local bank branch are often an important relationship to those running small businesses, especially in rural or non-metro areas. Access to information, services, products, and real face-to-face advice and support, are just some of the ways that small business owners feel they miss out on when their local branch shuts its doors.
Stay tuned for next week’s blog where we look further into how bank branch closures impact on UK small businesses.
Are you constantly reaching for the stress ball which has a prime position on your work desk? Whether it’s in the workplace, at home, or just in your everyday life; stress can be as debilitating as it is exhausting and counter-productive.
While a low level of stress can have a positive effect, it’s important to understand just where that level is at for you. Too much stress in the workplace and employees can be sapped of all motivation, have difficulty concentrating, are more accident prone, and can experience a reduction in productivity as their engagement levels drop. With work-related stress being a growing problem around the world, it’s affecting both the health and well-being of employees as well as the productivity of organisations.
The month of April is stress awareness month throughout the UK and it’s important to understand some of the key pressure points and situations within the workplace that can be a cause of workplace stress. These include:
- Organisational culture
- Conflicting management styles
- Job pressure, demands and long hours
- Physical work environment
- Relationships among colleagues
- Lack of support
Teachings from stress awareness month say that the most important point is to always look after number one – you. Recognise when you’re starting to feel stressed or anxious and learn to remedy that; slow down, take a break, and start practicing saying no to things that might just be too much for you at that point in time.
Some key symptoms of stress and tell-tale signs include:
- Headaches or other aches and pains
- Disruption to sleeping patterns including insomnia or constant fatigue and oversleeping
- High blood pressure
- Worrying thoughts or feelings of anxiety, anger, irritability, moodiness or difficulty concentrating
- Overeating or undereating
- Upset stomach
For more information on stress awareness month, visit HERE
In a recent report released from Opus Energy, 86% of UK SMEs say that they struggle with productivity levels. At the heart of a company’s productivity level is its staff; ensuring that workers are motivated, engaged, and feel a sense of worth in an organisation is a must in order for them to the operating at their most effective.
Opus Energy Chief Operations Officer Nikki Flanders has commented that, ‘it’s a wake-up call to hear that 86 percent of SMEs across the country are struggling with productivity. Given the gravity of the situation, as business leaders, we need to think of different ways to engage with and energise our teams – we all know that our businesses are nothing without them! We need to consider reward and development opportunities in the broadest sense to boost our employee offering.”
While London was one of the worst locations with a collective 93% saying they experience productivity issues, SME’s in the North West of the UK have taken the lead after the report and are actively trying to combat these slumps in productivity in the workplace. 85% of North West businesses said they have an on-going struggle with productivity levels and so have made a conscious move to help motivate and inspire their staff through tactics which include:
- 47% offering flexible working options and other positive wellbeing options
- 35% offer monetary rewards such as bonuses and additional “work-perks”
- 33% of North West UK SME’s say they pay above-average salaries to their staff to help them feel valued in the business
Flanders goes on to say that “It’s positive to see the North Western region leading the way, reporting some of the lowest levels of productivity issues compared to other regions. Their regional employment is certainly boosted by a third of SMEs there offering a higher than average wage, and with others going above and beyond with incentives and wellbeing provisions, they are putting employees first – something we can all learn from when considering our own employee offering.”
What goes around comes around right? Well, it seems that those UK small businesses who regularly give to charity perform better than those who do not. In recent findings reported on the smallbusiness.co.uk site, the more SMEs were giving to charity then the better result their bottom line displayed.
Key findings from the research show that;
- 67% of businesses who donate to charity see a positive impact on their profitability
- SMEs on average give 1.8% of their annual turnover to charity per year. This is the equivalent of an average of around £32,000.
- SME’s that donate to charity more than 0.5% of their turnover are:
- 20% more likely to see an increase in profits
- Two times as likely see an increase in their company reputation
- Approximately 50% more likely to improve their staff retention rate
But how exactly does donating to charity help UK SME’s be more profitable? With conscious consumerism being more apparent than ever these days, donating to charity can help to attract new clients. It can stimulate discussions and provide exposure to a new audience that a business may not have been visible to before. Furthermore, employees are more engaged which in turns creates a stronger staff retention rate for a business. Employees are happier as they feel as though they are helping to make a difference, and that they are working not only for their own income but towards a greater good as well.
In additional research that was conducted by the Greg Secker Foundation, a social development charity, it was found that the 54% of their UK respondents believed that it should be the law for UK businesses to donate a percentage of their annual profit to charity. Interestingly the results show to what extent a company’s public reputation and support can be influenced by whether or not that company donates to charity. Respondents claimed that if they knew a company was giving 5% of their profits to charity:
- 43% would have a more positive opinion of the company
- 20% would choose this company over other companies
- 17% would recommend the company to friends/family
For our part, Chamberlain McBain is delightly to be actively involved with the School Mock Court Case Project SCIO, an educational charity that this year witnessed the 10,000th student pass through it's prgramme. Expanding next year to the North of Scotland will see even more students taking part.
Anyone running a business will tell you that time is money. You hire people based on A. the business’ need for that position and B. the skills that your prospective new employee will bring to the table in order to fill that gap.
In today’s modern age, the words “freelancing”, “outsourcing”, and “remote working” are definitely buzzing around the business world more than they used to be. With some taps on the keyboard and the click of a button, you can have put a call out online and be reaching freelancers from around the world. Software or web developers in Dubai, small business accountants in Scotland, graphic designers in Canada, social media experts in India, data entry wizzes in New Zealand – the list goes on with pretty much every skill set you can think of available through freelancers for you to make the most of.
Regardless of whether it’s a specific short-term project that requires a specialist skill set, or something that could potentially be more long term, sometimes choosing to work for a freelancer may make more business sense than hiring a permanent or contractor employee.
So what are the benefits and advantages to working with a freelancer?
- Affordable: you won’t be stuck with the overhead costs of a typical permanent employee.
- Flexible their hours of work aren’t usually the Monday to Friday, nine to five – meaning you could email them on the Friday and have the work done by Monday.
- Freedom: you can engage with them on an “as-needed” basis meaning you can easily scale them up or down as required by the business.
But where do you find these freelancers and when would be the time to utilise them? Finding the freelancers is easy, a simple Google search using the words “freelancing platform” and sit back and scroll as access to the whole freelancing world opens up. These platforms provide you piece of mind by verifying and vetting both freelancers and clients so you can be assured you’re working with legit people. Freelancers will also have been given ratings from previously completed jobs and there is generally always an escrow or similar money protection scheme which has been put in place letting both parties rest easy.
It’s been a couple of months since the collapse of Carillion; when people of the UK watched centre stage as they witnessed one of the largest construction companies in the UK crumble and dissolve right in front of their own eyes. As a company responsible for employing 43,000 people worldwide, 20,000 of those in the UK, it’s an understatement to say that many people, families, and companies were affected by the demise of a company that managed to accumulate over £1.5bn in debts.
But now that the initial dust has settled and the spotlight has been moved from one major news story to the next, let’s get an update on where things stand on the Carillion calamity story.
- The current numbers: As at the beginning of March 2018, the official receiver has put the numbers of saved jobs at 8,216, with 1,458 employees having been made redundant.
- Buyout deal fallout: A deal with the Canadian real estate and facilities management company BGIS, has not eventuated. They were planned to take over a number of public sector jobs and would of, in turn, saved 2,500 jobs. A spokesperson from BGIS released a statement simply saying that the deal “will not be proceeding, as certain closing conditions have not been met.”
- Finance Directors investigation: A misconduct investigation led by the Financial Reporting Council’s (FRC) conduct committee has been initiated on the two Carillion Finance Directors, Richard Adam and Zafar Khan. The FRC has previously been focused on investigating the ethical and technical actions of KPMG between 2014 and 2017 in regards to their prepared financial statements for the company, but now makes the move to examining these two key players.
- PwC and the Carillion cash-cow: Accusations are running thick as to the conduct of PwC throughout the Carillion collapse. Between 2012 and 2017, PwC were chief advisors to Carillion’s directors in regards to their pension liabilities. After the Carillion collapse, PwC had the responsibility of trying to salvage money for the Pension Protection Fund, with the fund said likely to take care of 11 of Carillion’s 13 pension schemes. Along with PwC, other large accountancy firms such as EY, KPMG, and Deloitte have taken around £72m in total for work they conducted with Carillion in the 10 years leading up to its collapse, with some MPs accusing these accountancy firms of “feasting on what was soon to become a carcass”.
In an interesting case in Baden-Württemberg, Germany, industrial workers have won the right to work a 28 hour week for a period of two years in order to spend time with their families. With a constant strive to get that perfect work-life balance, it’s interesting to look around the world at other nations and see how they compare against one another.
In Britain, according to the Organisation for Economic Co-operation and Development (OECD), workers clock up on average 1,676 hours a year – which works out to be around 32 hours per week. Confining results to the European continent, Greece ranks the highest with 2,035 hours worked per year on average, followed by Poland with 1,928 hours and Latvia with 1,910. So all in all, the UK is doing okay in comparison.
However, working the hours is one thing, but productivity is a whole other kettle of fish. Research by the UK government has found that the average British can lose up to 70 working days per year because of low productivity. So how can you help to make your employees more productive at work? Ultimately they say it boils down to one key thing – keep your employees happy.
Now obviously this is quite broad; don’t different employees want different things? Well yes, while this is true at a micro level, there are some things you can do at a higher level that can help all your employees be as happy as can be within the workspace.
You can help to make your employees feel valued, appreciated, and ultimately, more productive by:
- Giving them a nice space to chill in – Having a decent place away from the goings-on of the business is crucial for your employee's wellbeing. Providing a place where people can relax and take a break from their work even if the weather outside is glum will, in turn, see them return to the job more refreshed and revived.
- Giving them the little perks – A coffee machine and microwave in the kitchen, a dart board on the wall, bean bags, some plants, a few magazines – these are all cheap and good ways that you can add a little bit of those comforts that will go a long way.
- Giving them the right tools – Proper office chairs, anti-fatigue standing mats, proper lighting; make sure your business is providing its employees with the equipment that is needed to get the job done.
- Encouraging proper break times away from work – Studies have shown that even a 15 to 20-minute “breath of fresh air” can do wonders for an employee’s productivity levels once they’re back at the helm.
A nation’s economy is always under continual scrutiny by economists, business owners, the media, and pretty much the majority of the public. An article in The Guardian recently reported (Thursday 22 February 2018) that the UK’s economy trailed behind some of the other big EU players in the last three months of 2017. The UK's Office for National Statistics downgraded its estimate to 0.4% for the UK's growth in the 2017 fourth quarter – and economists are saying this will realistically be how it stays. This puts the UK economy’s performance at the weakest it’s been in five years.
However, a recent survey conducted by Flexspace Business, a UK provider of flexible workspaces and offices, begs to contradict this statistic, at least for where SMEs are concerned. It reported that 80% of those SME owners surveyed say that they have growth plans at the top of their agenda for 2018.
Flexspace surveyed 150 UK small and medium business owners in what they have dubbed the “Sentiment Survey”. The survey was only open to those SMEs making use of a Flexspace centre across the UK and 98% of these respondents have an annual business turnover of £5 million or less.
Let’s take a look at some of the key findings from the survey:
- 80% of owners are anticipating moderate to substantial growth rates
- 78% anticipate their confidence in the UK economy will grow or remain the same for 2018
- 43% of business owners have recruitment in the pipeline for 2018, with 32% saying they hope to recruit upwards of 4 employees for their UK SME
Managing Director of Flexspace Lee Maytum comments that “with uncertainty around productivity, the UK economy and a changing global landscape, it may be easy to assume small businesses are pessimistic about the future. Yet this survey suggests the exact opposite. Small businesses are feeling positive with plans for growth.”
Cancelled trains, cancelled buses, cancelled flights, and closed roads – a blasting of weather, regardless of its temperature can have an adverse effect on the UK economy
Over the recent week, the UK and many parts of Europe have been hit hard by the storm dubbed “The Beast from the East”. With red alerts issued by the UK national Met Office and state troops deployed from Lincolnshire, it seems it was disaster mode for the UK. As a cold front swept across the country delivering weather that was, on average, 7°C colder than what is normal for this time of year, people were warned to “stay indoors”
An extreme weather event like The Beast from the East obviously has an impact of the UK economy. Reports from The Office for National Statistics after December’s 2010 weather that included widespread heavy snow and freezing temperatures, resulted in UK retailers experiencing one of their worst Decembers on record. Retail sales dropped 0.8pc during on the months that, in the lead up to Christmas, should’ve been one of their strongest. When there was more heavy snow in both January and March 2013, the UK economy experienced a dip again with many businesses remaining closed due to the weather
The Office for National Statistics’ went on to summarise their findings by saying that extreme weather events cause a temporary drop in the UK economy’s overall economic growth. Industries that normally suffer the biggest blow in times like these include the retail sector, along with the travel, tourism, hospitality, and hotel industries as people are advised, or forced, to cancel their travel plans and stay inside.
Then, of course, there are also the costly aftermath effects of damage caused to properties and businesses such as burst water pipes and failed heating systems. But it’s not all doom and gloom, however, as once everything returns to normal, the need for trades and services to repair and restore everything back to working order pumps money back into a halted economy. Furthermore, with the rise of cloud technology, some businesses can still operate from remote locations meaning not everything has to shut down. Office based businesses that make use of cloud-based servers and emails can still have employees working from home and being productive even on designated snow days
Both the Accountant in Bankruptcy (AiB - Scotland) and The Insolvency Service (England and Wales) have released their respective figures for the last quarter. Overall, Scotland fairs better than England in both personal and corporate insolvencies
Corporate insolvencies in Scotland have decreased to 202 in the last quarter compared to the same quarter in 2016/17. Equally, personal insolvencies have decreased by 3.8% with a drop in bankruptcies of 4.2%, offset by a rise in protected trust deeds of 6.9%. The less popular DAS scheme (573 cases v 1,089 bankruptcies and 1,602 protected trust deeds) has also seen a reduction in the amount repaid, despite an increase in the number of cases of 8.5%. The report can be found here.
The Picture is different in England where corporate insolvencies increased by 4.2% on the year previous, with some 17243 companies effected. There was an increase in the number of creditor voluntary liquidations within this figure of 8.2%. Personal insolvencies saw a 9.4% increase mainly driven by the rise of individual voluntary arrangements (IVAs). IVAs increased by 19.8% to their highest ever record of 59,220. A copy of the report can be found here.
If you need any assistance, please speak with your usual contact at Chamberlain McBain
It was only six months ago that the British Retail Consortium released figures showing that, 10 years after their initial release in the UK market, contactless cards payment had seemingly “won over” the UK public.
Known also as “pay wave” or “tap and go”, the Consortium reported that contactless card payments were attributing to approximately one third card purchases. 2016 saw the first year when card payments, as an overall payment method, took the number one place in Britain over cash payments, accounting for more than 50% of all transactions.
The mindset behind this transition from cash to card payments is interesting indeed, with Niro Sivanathan, a London Business School professor, commenting that parting with cash is “psychologically painful”, whereas paying for necessities with a contactless card “anaesthetises the psychological pain that accompanies payment, seducing us into splashing out”.
Equally curious now, is a recent article in The Guardian which interviewed a number of UK residents and asked them their feelings on the cash to contactless card payment trend that is on the rise. The Guardian has stated that the bulk of respondents said that while they enjoy the ease of contactless payments they “fear the risk of fraud”, and so it seems that the public see security as an issue that stops them diving head first into the world of contactless payments.
One of the Guardian respondents, a 73-year-old man Peter, said that he and his wife were victims of fraud when their debit and credit cards were cloned after they used them in a contactless payment situation in a restaurant and petrol station.” He goes on to comment that, “I use my debit card in reliable supermarkets, but I usually withdraw enough money from a reliable cash machine to keep me going for two to three weeks. Going cashless makes you vulnerable to rip-off frauds.”
The word on the high street is that the retail sector is facing a long-term slowdown. The latest figures released by the Office for National Statistics have proved to not be as perky as many had of hoped and after a less than ideal December, both the short term and long term retail forecast is not looking overly bright. Declining wages, consumer debt and the higher borrowing costs are being blamed for this lack of consumerism on the UK high streets with many of the big names in the retail world taking a big hit.
And it is the big retail names that have been getting a lot of media attention of late as they teeter on the edge. Big brands such as House of Fraser, Debenhams, Maplins and Toys R Us have all been feeling the pinch as shoppers are no longer walking into their high street stores and instead are turning to cheaper online alternatives from the comfort of their living room sofa.
So long term then what does this mean for the big retail brands with their big retail centres? After the 2016 collapse of the 88-year-old department store BHS, more than one- third of their stores are still empty with the prospects of large-scale retail tenants who can take on such large spaces minimal, to say the least. While the likes of Primark and Wilko have taken over some, others have been transformed into many smaller shops.
Director of UK shopping centres for Hammerson Peter Cooper has commented that “with more and more shopping done online, malls and town centres need to provide experiences that can’t be enjoyed at home.”
It’s about diversifying; it’s about offering a new retail and shopping experience. Cooper goes on to give the advice to retailers and landlords; “you need to understand your market, be creative and use lateral thinking”. People are still expected to head to cities like London, Manchester or Birmingham when they want that big store experience, but even so, oversaturation is something that won’t bode well for the market.
It was announced last week that hard hit contractors of Carillion will be able to apply for a government-backed £100m support package. High street lenders are banding together to provide both individuals and UK small businesses who are owed money from the construction giant who went into liquidation in January whilst still owing up to 30,000 businesses around £1bn.
High street lenders will be supported by the British Business Bank to deliver these loans to Carillion contractors who would more than likely not be eligible for loans due to their small size or lack of viable assets to guarantee their loan security. The British Business Bank specialises in providing financing for smaller businesses and although it is 100% owned by the government, it is independently managed.
Secretary of State for Business, Energy and Industrial Strategy Greg Clark has commented that “we want to signal very clearly to small and medium-sized businesses who were owed money by Carillion that they will be supported to continue trading. The banks have responded to my request by agreeing to support businesses and individuals affected. This further guarantee will help those businesses who may not be able to provide the usual security for a loan.”
A total of 930 workers who were employed by Carillion have been made redundant since the company’s demise. The latest round of 101 employee cuts are majority back-office and engineering support staff who aren’t required by the new suppliers that are picking up the pieces from Carillion’s collapse. 2,250 jobs however have been saved, with the Official Receiver being able to safeguard certain public and private contracts across the city council and the facilities management services industry.
A representative from the Official Receiver has said that “those who have lost their jobs will be able to find support through Jobcentre Plus’ Rapid Response Service and are also entitled to make a claim for statutory redundancy payments.”
A nation’s economy needs to be in a good place to foster growth right? Well it must be looking good for Britain then as a recent report released from Digimax, a digital marketing agency based in London, has predicted that 2018 will be a year for the UK small business startups.
Their survey found that 76% of business owners claimed to be working on new business ideas, with 43% saying they are aiming to be launch-ready this year. The report found that tech startups ranked supreme over any other sector; 77% commented that the media would be playing a big role in their successful go-to-market launch strategy.
Digimax CEO’s Shaz Memon comments that "in 2016 startups received more investment than in any previous years, and that appears to have continued through 2017 and potentially into 2018. The fact that the UK is leading the way in this is fantastic news for the economy, with the ability to bring long-term growth and security.”
It seems most of those surveyed by Digimax are already business owners and that their startup ventures still in the pipeline are off-shoots to their main company and day-to-day. So if you’re new to the SME game and are just starting out, what are three key things you should be considering?
- Finding the right investors and keeping them – To find the right backers you need to be able to sell the right story, the right ideas. You’ll need to ongoingly be able to prove why there is space in the market for your product or service and why people should keep giving you money for it.
- Choosing the right investments for the company – In the beginning stages of any business there will always be investments that need to be made to help the company get ahead; for example taking on more staff so that key drivers in the business are able to strategize more, promote more, or sell more. You might need to invest money into R&D or marketing. Make sure you’re being strategic with where you’re investing your startup’s money so you can ensure you see as much ROI as possible.
- It’s all about the talent – Always keep in mind that the talent you hire is ultimately what is going to help drive your business forward. Finding the right staff and retaining them is key; people that are committed, engaged and that believe in your vision and what you’re trying to achieve is more important than ever within an SME startup.
The latest figures released from The Insolvency Service are reporting a 9.4% rise year-on-year of the number of people who have declared themselves insolvent. A total of 99,196 households went bankrupt in 2017, the highest number post the last major financial crisis.
Collating all of Britain’s personal debt together totals a whopping £1.6tn as many a household turns to individual voluntary arrangements or “bankruptcy-lite” deals. These so-called rescue packages allow individuals to reorganise their debts and contribute much lower size payments in a bid to pay off their debt.
A spokesperson from The Insolvency Service has said that “one in 467 adults (0.21% of the adult population) became insolvent in 2017, up from 507 in 2016”. Credit card spending and car finance deals are thought to be at the crux of the debt, with people turning to their credit cards more and more often for their general everyday spending.
In the business world the figures have risen since last year as well. Approximately 17,243 UK companies entered insolvency in 2017, a figure which is up 4.2% on 2016. Slowdowns in the economy are blamed for the rise, along with the uncertainty created after the Brexit vote. Keep in mind too that these figures are preceding the demise of Carillion which is bound to have a major knock-on effect for many SME’s throughout Britain who are unable to keep their business’ head above water amid monies owed and debts unpaid.
It was a year ago that KPMG reported on the 2016 vs 2017 insolvency figures with the firm recounting the rise in numbers – from 1,111 in 2015 to 1,174 in 2016. Head of Restructuring at KPMG UK Blair Nimmo was reported as saying that “while it’s something to keep an eye on, it’s certainly not cause for alarm”. A year later and we’re still in the same boat; is it cause for alarm now?
It’s been the news of the week and for many, it’s come from the blind side. However, the warning signs must have been there right? One of the largest construction companies in the UK responsible for employing 43,000 people worldwide and 20,000 alone in the UK, can’t just go into liquidation one day without there being some tell-tale signs that a storm was brewing?
With the accumulation of debts around £1.5bn, many companies will be affected by Carillion’s downfall. Responsible for managing prisons, schools, hospitals, maintaining the homes of thousands of military personnel as well as having a £1.4bn joint venture contract for the new HS2 high-speed rail line, monies owed to SMEs around the country from Carillion may, in fact, be a key contributing factor to their downfall as well.
The story goes that even the company’s directors had no idea what was on the horizon. The annual company report published in March clearly stated that there was no reason to think that the company would have any financial difficulties in the next three years. Fast-forward ten months on and clearly, that is not the case. Delving into it further and it seems that investors had actually begun betting against Carillion shares way back in 2013. So what did they see then that even the company directors couldn’t make out now?
High average margins – Reporting average margins of about 4%, this is twice the standard rate for construction companies. With work contracts spanning across the globe, some of the extra margin could be a result of their high-margin work in the Middle East, but at the end of the day, if you’re not getting paid for these contracts then ultimately the cash flow isn’t there. It’s been reported that when it went bust, Carillion was owed about £400m from these seemingly “lucrative” contracts.
Late payments to sub-contractors – When the cash flow isn’t there and things are tight, you just can’t pay your subcontractors. This was definitely a sign of the trouble that was brewing for Carillion who was making some of their subcontractors and suppliers wait up to 120 days before they were able to be paid.
Hidden debts – In an effort to speed up payments to their subcontractors, Carillion made use of the Early Payment Facility which allowed their suppliers to take their invoice to one of Carillion’s lenders to be paid. These lenders would charge a fee to Carillion and so the debts just continue to mount up and up and up. At the time of their last annual report, Carillion registered approximately £850m of debt; however, this wasn’t taking into account the accumulated debt in fees which was being published under a different heading in their accounts. Not ideal.
Philip Green, chairman of Carillion has said it’s a "very sad day" for the everyone involved in the company, whether that be workers, suppliers or customers, it’s a very sad day indeed.
Things are not looking so bright and shiny on the UK high streets these days with many of the country’s biggest names returning less than favourable results for the Christmas period.
Marks & Spencer witnessed a decrease in sales across both their food and clothing arms – with slumps of both 0.4% and 2.8% respectively. In the 6-week lead-up period to Christmas, House of Fraser also saw their in-store sales fall by 2.9%. These figures were released amid news that the department store giant was looking to cut their store size to minimise their rent, aiming to reduce their overall high street outgoings by 30%.
It hasn’t been all doom and gloom however with some things turning out better than some analysts were expecting. Supermarket chains Tesco, Sainsbury’s and Morrison’s all reported rises with 3.4%, 1.1% and 2.8% respectively. There was much speculation surrounding the performance of homeware and fashion chain Next as well, but against their anticipated 0.3% fall they achieved a 1.5% increase in their total sales in the 54 days prior to December 24 – much better than expected.
The best figures however have undoubtedly come from the world of the internet with online shopping performing particularly well. In the world of AO World, in the three months leading up to the New Year they posted a UK revenue growth of 11.4%. Online fashion retailer Boohoo also saw great revenue goals achieved and have since reviewed their full year group revenue growth by 10%, taking it from 80% to 90%.
Still, amid the highs that some businesses received it’s still certain to say that the current UK economic outlook is looking a tad shaky. With Toys R Us signalling the close down of a quarter of their stores across the UK resulting in the loss of approximately 800 jobs and Debenhams shares plunging after their festive season sales drops, it certainly is looking stormy out there in the retail world.
If you or your business requires information on how to recover your debts to help maintain cash flow contact Chamberlain McBain today. Chamberlain McBain offer a wide range of cost-effective services including debt recovery, litigation and more. Get in touch with the team today by calling 0131 272 2799.
Late payments are never something that bodes well for any business – but this is especially the case for SMEs. Cash flow issues can cripple a business, and small businesses rely more than ever on the money coming in so the money is there to go out.
The latest in findings from MarketInvoice, a business finance company, forecasts that the late payments trend which the UK small business world has been grappling with recently is only set to continue, and potentially even get worse. MarketInvoice looked at over 80,000 invoices issued in 2017 from UK SMEs and found that 62% of these were paid late. Worth over £21 billion, this is up 60% from 2016. Ouch.
Let’s look at some the key findings to come out of the study:
- The average value of an invoice was £51,826.
- Around a third of invoices paid late took more than two weeks to be paid from the original agreed date with the longest taking almost six months.
- Sectors that took the longest to pay invoices in terms of the timeframes included those in the Transport industry (25 days), Utilities (23 days), and the Media businesses (21 days).
- Business sectors that were the worst culprits included the Food & Beverage industry (83%), Energy Businesses (80 %) and those in the Wholesaler business world (79%).
- Region wise, Northern Ireland is at the top with a whopping 93% of invoices being paid late, followed by East Anglia at 68% and East Midlands at 66%.
- The survey looked at invoices sent internationally as well. At the top of this table was Germany who took an average of 28 days longer to settle invoices than what was agreed.
MarketInvoice spokesperson Bilal Mahmood commented that “the problem is being compounded by 90-day payment terms demanded by larger organisations, which are becoming more common. SMEs need to understand what measures they can take to reduce the risk, such as making T&C’s clear from the outset, chasing payments down and enforcing the right to claim compensation for late payments.”
If late payments are a problem for your business, then speak with Chamberlain McBain who can offer a cost-effective option when you need to speak with a team of professionals. Unlike most other services, they charge only for the work carried out, for the most part limiting costs to those recoverable from the debtor or offering a fixed cost. Get in touch with the team today by calling 0131 272 2799.
It’s been in the pipeline for the last couple of years, and now the time is nearly here – on 25 May 2018, the new GDPR, or the General Data Protection Regulation, will come into effect. Overhauling the way both public and private sector UK businesses handle personal data, it’s forces businesses to rethink how they are collecting, using and storing personal data. Let’s look at some of the main factors you need to know about the GDPR.
- Who is affected? – The GDPR applies to both large and small businesses however not all organisations will be subjected to meet the same compliance standards. Those that are considered to be high risk or are processing a large amount of data will have to submit more resources when it comes time to proving their compliance.
- What is the change? – There are new rights for people to be able to access the information that companies hold about them, as well as a change to the way data is managed within both large and small UK businesses, and a new system of fines.
- What are the effects? – Employees are already able to access their personal data as set out in the currently enforced Data Protection Act 1998, however when the GDPR comes into effect, these rights will be greater including an ability for individuals to request that they be “forgotten” or have their personal data erased. Companies may need to have data protection policies set in place, conduct data protection impact assessments and be able to make available clear process documents for how they’re processing data. In the case of a company being a public body, collecting sensitive personal information, or if its core day-to-day business involves large-scale data processing, a data protection officer may need to be appointed.
- What is the fine for non-compliance? - Enforced by The Information Commissioner's Office in the UK, fines can go as high as €20 million or four per cent of an organisations global turnover (whichever is greater), which can be much larger than the current £500,000 penalty the ICO currently lays down.
- What about Brexit? - Once Brexit is fulfilled, the UK government is planning on implementing a new Data Protection Bill which will feature many of the same compliance features of the GDPR, and so although there will be some changes, by and large, the same laws will be applicable.
You can read about it in more detail by visiting HERE
In the last blog post, I looked at the first three trends predicted for 2018 that would have an impact for small businesses, and in this post, I’m wrapping it out with numbers four, five and six:
- More machines take overs in customer service – It’s like a flash of reality from one of those futuristic movies but it’s the way things are moving. Machine learning is basically a field of computer science that gives computers the ability to learn without being necessarily programmed. Its’ AI, or artificial intelligence, when it comes down to it. Voice recognition software and speech analysis tools are perfect examples of machine learning, and this is set to become more accurate and more cost effective in 2018. With this comes the predicted trend that sees machine learning playing a bigger role in sales and customer service roles; businesses recording and monitoring more calls and callers being guided through using speech analytics and tools as opposed to keying in numbers and physically prompted.
- An increase in the number of remote workers – As flexible working hours are being more and more desired and technology infrastructure continues to develop and improve, the ability for employees to work remotely is only looking to keep increasing in 2018. What used to be the “occasional work perk” will be moving to become more standard, as long as the job can be done remotely of course. Workplaces will become more modern and flexible too, with shared office spaces looking to continue to grow as small business look for smarter ways to do business while minimising overheads.
- Mobile payments – Customers are consuming more and more via digital channels these days and this is only set to continue to increase in 2018. Along with this comes the desire for them to be able to conveniently pay using their mobile devices such as their mobile phones or tablets. If you have a storefront it can’t just be able the cash, you need to be able to accept cards as well. And charges for card payments? A pain point for consumers for years. From 13th January 2018, businesses will not be allowed to add any surcharges for card payments. The worst offenders currently are airlines and food delivery apps, and small businesses which typically add a fee for cards. In 2010 alone consumers spent £473m on such charges, according to estimates by the Treasury. It follows a directive from the European Union, which bans surcharges on Visa and Mastercard payments. However the UK government has gone further than the directive, by also banning charges on American Express and Paypal too.
The New Year is nearly upon us, and the end of a year is a time when I’m always reflective on the year that’s been, as well as being contemplative about the year that lies ahead. What will the New Year bring? What does 2018 have in store?
For small business owners, staying at the forefront of an industry is important, and things can change in the market fast. In part one of this blog edition; let’s take a look at three of the top small business trends being predicted for 2018:
- The move from the Cloud into “Microservices” – The technology and IT market is expected to see a big shift in 2018 with the buzzword of the Cloud being replaced with the next big proposed IT trend – “microservices”. Microservices architecture essentially sees businesses utilising a smaller suite of software and hardware applications instead of the one big and complex beast of one. The benefit of a microservices setup means that having a number of smaller applications makes it easier to scale up and down, meaning that a business can be more responsive and more adaptable. It also in turns decreases risk while increasing efficiencies – all good things for a small business.
- An increase in potential cyber-attacks on small businesses – As the internet and the digital world continues to grow, so does the frequency and seriousness of potential cyber threats. More online payments, more mobile banking, and more important business information held in the digital world means more opportunity for attacks and so a focus on cyber security is paramount for all UK small businesses.
- Personalised marketing and advertising is where it’s at – As we all continue to be bombarded with marketing and advertising on a daily basis, the need for a small business’ efforts to stand out in the marketplace is more important than ever. Achieve this by endeavouring to make your marketing and advertising as personal as possible. If you send email marketing make sure it’s relevant to your customers and their interests. Include their name in the subject line and ensure you’re speaking directly to them and providing high-value to them in what you’re trying to get your email content to say. Make your calls to action clear, direct and personal.
Stay tuned for next week’s article where we look at the other three top business trends predictions for 2018.
Every day, of every month of every year, thousands of UK businesses small and large are dealing with the financial fall-backs of late payments. Along with this comes the effects of potential cash flow issues which can ultimately and scarily jeopardise a business’ ability to operate and findings from a payment processor Bacs report released back in January that showed nearly half of UK SME’s were experiencing some form of late payment.
A whopping £26.3 billion was estimated by the UK government in January this year to be owing to companies in the form of overdue payments, and at the same time that they released this figure, they also released new regulations requiring both large companies and limited liability partnerships (LLPs) to report twice a year on their payment practices including the average time it takes them to pay supplier invoices
Now, new research has been released from the Tungsten Network that continues to highlight the problems businesses are facing in regards to late payments. The report looks at the key issues faced by businesses globally that seem to hold up the stop signs up along the path of procurement to payment. Surveying 422 global businesses, the Tungsten Network has created a new benchmark known as The Tungsten Network Friction Index which provides a level of reference for future years to come in order to ascertain whether the friction of the procurement to payment process is improving or not
The survey questions were centred on payment processes and cycle time, costs and visibility. Tungsten Network’s CEO Richard Hurwitz comments that “late payments impact economic growth. Chasing payments is a source of frustration for suppliers and buyers alike. Our research shows that when it comes to late payments, clunky internal processes and slow paper-based systems are the predominant causes, leading to friction in the supply chain.”
Specifically, the research has found that leading culprits for the slowdown from procurement to payment include a high proportion of paper invoices and the manual processing of invoices; this was cited as the number one issue. Coming in a close second was businesses dealing with too many non-PO based invoices as well as a high volume of supplier enquire regarding the status of their payments.
You can view an infographic showing the research and the findings in more detail at: HERE
Lisa's Blog: Get a slice of the £27bn online
shopping pie. PayPal study shows
websites needs to be mobile-friendly
A recent study conducted by PayPal predicts that shoppers are set to double the amount they spend on purchases made on their smartphone. So how much are they expecting people to spend? Just a casual £27bn this year alone, with further expectations that this’ll hit £43bn by 2020. Wow.
These figures scream the importance of making sure your website is mobile optimized. What this means more specifically is can online shoppers easily view your website on their mobile devices such as smartphones and tablets. Your small businesses may already be there, with an automatically scaling website that displays nicely no matter what device it’s viewed on. However for many others this doesn’t seem to be the case, with the survey finding that only 18% of UK small businesses saying that yes, they did have a mobile-friendly website.
Let’s look at some of the other figures to come out of the survey:
- 33% of UK small businesses said they don’t feel like they need a mobile website because they “do well enough as it is”.
- “Lack of a mobile-friendly website” was the number one ranked frustration by consumers when they’re trying to buy something online on their mobile device.
- 44% of 16 to 25-year olds say they plan to increase their smartphone-based online shopping.
- Over 33% of businesses noted that an average value of an individual sale is between £10 and £30. PayPal’s research however has shown that consumers who are looking to buy a product via the digital world are happy to pay up to three times more – with an average spend of £84 on a smartphone and £103 on a tablet for each individual sale.
Nicola Longfield, Director of Small Business at PayPal UK, comments that consumers are now “willing to go through with quite sizeable transactions on their mobile, so for small businesses, if they don’t have that secure and easy way for consumers to buy on their mobile, the chances are they will lose that sale.”
The plan for the UK economy has been laid bare by the Chancellor of the Exchequer Philip Hammond, after the Autumn budget 2017 was released last week. Hammond comments that the Budget aims to “look forwards, embrace change, meet our challenges head-on and seize the opportunities for Britain’.
But what does that actually translate to for UK small business? Previously the Office for Tax Simplification had suggested that the threshold for compulsory VAT registration be lower to £20,000 – which would have hit many UK small businesses hard; so the fact that this rate has been frozen at £85,000 for the next 2 years (at a minimum) is extremely good news. In addition to this, business rates are scheduled to be lowered by 1% from April 2018 – always good news.
So let’s take a look at a high-level of some of the Autumn Budget 2017 changes and the items that may affect Britain’s small business world:
- £3 billion will be set aside for possible Brexit outcomes
- Debt will hit a peak of 86.5% of GDP this year, but will fall in following years
- The UK’s growth forecast has been reduced to 1.5% from 2%
- GDP forecasts have been cut to 1.4%, 1. 3%, and 1.5% for the following years
- Borrowing is forecast to fall from this year on – from £39.5 billion in 2018-19 to £25.6 billion in 2022-23
- For the next 2 years (minimum) the VAT threshold will be frozen at £85,000
- Business rates will be indexed to CPI from next year, which could see a rates reduction of around 1%
- After the next revaluation, business rates revaluations will occur every three years
- The main R&D tax credit rate will be increased to 12%
- There will be a rise in April 2018 on the vehicle excise duty for diesel cars that do not meet latest standards
- No tax hike for van owners
- The diesel supplement in company car tax to rise by 1%
- The tax-free personal allowance will increase to £11,850 from April 2018
- The higher rate tax threshold to rise to £46,350 from next year
- £2.3 billion will be set aside by the government for investment in R&D
- UK SMEs will be given an extra leg up as the British Business Bank makes £13 billion available for funding
- A national retraining scheme will be launched that focuses on the construction and digital skills industries
- A planned expansion of the Enterprise Investment Scheme will make investments in growing tech businesses is easier
- £500 million to be invested for 5G mobile networks and fibre broadband
- £540 million to support the growth of electric cars, including more charging points
Wages and employment
- As of April 2018 the National Living Wage will increase by 4.4% from £7.50 to £7.83 p/hr
- An additional 600,000 people forecast to be in work by 2022
In the last article we looked at why social media is so important for small businesses; but where do you start when you’re looking to get your SME up and running? Here are four key tips to help make what can be a daunting task just a little bit simpler:
Define your social media strategy – This doesn’t have to be an eight-page long document, even a short and simple couple of pages can hit the spot. The important thing is that you’ve taken the time to consider
what you want to achieve from your social media, so that you know what success looks like for you and your business. The most important points to cover include:
- Your target audience – Who are you trying to reach with your social media? What are their demographics? What are their interests? Defining this will help you to create compelling content that they will engage with.
- Your social media personality – How do you want to be perceived by your target audience? What kind of personality does your brand have? Make sure that the content and subject matter that you share and post is aligned with this.
- Your social media goals – Do you want to increase the number of customers coming into your shop? Or maybe your social media efforts are all in the name of getting your small business brand exposure. Make sure you think about what you want to achieve so you’re able to figure out down the track whether it’s working or not.
- Choose your social media platforms – There are a multitude of social media platforms to choose from; Facebook, Twitter, LinkedIn, Instagram, Pinterest…. the list goes on. There really is no need to sign up to them all, unless they are all relevant to your product or service. Think about your audience and where you are most likely to reach them. For those SMEs that move in professional circles then LinkedIn is a great option for you. Is your business in the fields of fashion, art or music? Then Instagram and Pinterest, those channels that present more visual opportunities to portray your brand, make a great choice.
- Create a content plan – This can be as simple as listing ideas about the kind of content you will post or articles, links and photos that you will share. This list will no doubt keep growing and altering as time goes on, just make sure you keep in mind your social media personality always and ensure that the content you are putting out there stays true to your SME and its brand.
- Monitor, measure and modify – Social media is an organic beast and you should always be looking to monitor and measure your results. What do your target audience respond to and like the most? What is failing to stimulate them? Measure your results against what you set out in your initial strategy and modify as needed to sure you keep you hitting the mark and reaching your social media goals.
For weeks schools from across Southern Scotland have been preparing for their Mock Court. After seven weeks of tutorials, which included a visit to Edinburgh Airport Fire Service, tutors in the field of medicine, prosthetics and engineering, the students undertook their intermediary trials in the Court of Session and the High Court of Glasgow. The winning Pursuer and Defender teams from each region then went head to head in the finals in Glasgow Burgh Court before The Rt Hon Sir David Edward
The Awards Ceremony took place last night in the Signet Library where Dunbar Grammar were announced as the overall winners of the School Mock Court Case Project - Seniors, with Prestwick Academy as runners up. The award was present by The Rt Hon Lady Dorrian, Lord Justice Clerk and our Mr Murphy who is the Chairman of the Board of Trustees to the School Mock Court Case Project SCIO.
The winners will now go to New York, sponsored by Brodies LLP, to compete with a school there, as well as attend a local school, before taking in many of the sights New York has to offer
Many of the Seniors have applied to attend the Hague ICC Moot competition in the Netherlands in January 2018 against 18 other countries. Six will be selected to attend and our Mr Murphy will be leading this.
For a small business social media is more important than ever. With all of your target audience in one place, the need for a social media strategy no matter how simple or complex is definitely an area of the business which needs to be thought out. Plus, one of the best things is it’s free – apart from the time spent by someone doing the legwork in order to post content, signing up and becoming present in the virtual social world doesn’t cost you a thing.
But why exactly is social media so important for your SME?
- You’ll reach a wider audience – Even if you’re not running a paid promotional campaign through your social channels, you’re still bound reach a larger audience organically then you would have otherwise without. When your followers like or share something that you’ve posted there’s a chance that the people they’re connected with will see this also – giving your company and brand more exposure.
- It helps to build your brand and its trustworthiness – Social media isn’t just about advertising the services that you offer, it’s also about advertising your company as a whole. Showing behind-the scene glimpses into your company gives it a feeling of “we’ve got nothing to hide” which helps to create transparency and trustworthiness among your prospective customers and clients. Furthermore, most prospective employees will undoubtedly do a Google search of your business before they send in their application for an advertised position, and so your social media accounts should also portray the personality and people behind your company that will help to sell it. If your company does a mid-week Christmas event then don’t be shy in posting these photos – show the community of your organisation and the perks of working at your company
- You’ll better understand your market and gain insight – The analytics behind social media are all there for you to delve into and they can provide a great sneak peek into the world of the people who are engaging with your business and your brand. What content do you post on Facebook that get the most likes, shares or comments? What subject matter generates the most conversation on Twitter? All of these insights are useful when it comes to understanding your target audience more
- You’ll find ways to improve your business – By talking and engaging with people via social media you’ll no doubt find areas where your company can improve. Don’t be afraid of feedback you might receive on social media, it’ll provide you with a heads-up on the areas for improvement as well as giving you an opportunity to respond in a respectful manner that is tactful and thought out.
But where do you start? Social media doesn’t have to be a daunting task and there are some simple things to keep in mind when you’re looking to create your social media platforms or define your strategy. Stay tuned for the next article where we touch on the key aspects to consider when getting your business up and running on social media.
Something’s been cooking in the oven which is the UK job market, with advertised job vacancies on the rise. Latest figures which have been released from independent UK job website CV Library show that compared to last year’s Q3, the UK as a whole has experienced a 12.2% increase in advertised job vacancies, with some cities registering a growth of over 20 or even 30%.
Much of the south of the country has witnessed strong increases with Portsmouth, Brighton, London and Bristol seeing good growth rates. With London ranking high in the top spots, this is encouraging given the general feelings of uncertainty across various markets, and which has been thick in the air particularly in the nation’s capital. What’s also encouraging to note is that the Scottish job market is streaming along strongly as well, with three key cities of Aberdeen, Edinburgh and Glasgow making it into the top ten. Northern England rounds out the other top ten places, with Sheffield, Leeds and Manchester also experiencing a mentionable job vacancy boom.
The rankings as they stand for the top ten cities that have experienced this Q3 year-on-year advertised job vacancies growth include:
- Portsmouth – 35.9%
- Brighton – 33.3%
- London – 25.8%
- Bristol – 22.5%
- Sheffield – 22.2%
- Aberdeen – 20.6%
- Edinburgh – 20.3%
- Leeds – 14.7%
- Manchester – 13.8%
- Glasgow – 12.5%
When it comes to which industries have seen the most positive job vacancies growth figures, Retail sits firmly at the top with a 15.7% growth rate for a Q3 year-on-year comparison, followed by Customer Services at 12.2% and Charity at 11%.
Furthermore, it seems this business confidence for Q3 also stretched over into salary levels as well, with Scotland leading the pack in this chart; salaries in Dundee have risen 34.4% year-on-year, followed by Aberdeen at 21.2% and Inverness at 10.3%.
CV Library comment in their report that one can surmise that these strengthened figures are as a result of the lower net migration of workers entering the UK from the EU, with overall immigration traffic falling by 4.3% in the past 12 months. This decrease in the number of European workers has, in turn, led to a need for businesses to increase the salaries which they are offering to job hunters, in order to entice and charm. The big question is, can British companies support this salary increase in the long term? Only time will tell.
For a link to the CV Library full report, please visit: HERE
“Don’t reinvent the wheel” – how many times have you heard this around the boardroom table, in meetings, or among your peers and colleagues? While this is true in many cases, there comes a point as well when the need to do something different almost seems compulsory; you need to position your business differently in the market, you need to create a unique selling proposition, you need to be seen to be leading the pack and not just following – you need to be innovative.
Here are three easy tips to follow that will help to get the innovative process started in your SME:
- Innovation can be simple – Don’t be overwhelmed by the word innovation by believing that you need to think of something that is going to solve all your business problems in one go. Innovation can be bite sized and easy to digest, such as creating new templates for marketing campaigns or considering the manufacturing and packaging of your products and how small tweaks could be made to make this better.
- Listen – This strategy stretches far and wide; listen to your staff, listen to your customers, listen to your suppliers, listen to the market. These are the people who are living and breathing your industry and a frustration or the inability to achieve something because of some reason can often lead to the spark of an innovative idea. Although McDonald’s definitely wasn’t the first company (fast-food or otherwise) to implement the business concept of a drive-through, they decided to add this restaurant style to their port-folio back in 1975 as an effort to aid military members who weren’t allowed to get out of their car to enter the restaurants while wearing their fatigues. Drive-throughs now tally 70% of McDonald's US business.
- Make innovation part of your every day – Put time aside on a regular basis to create the space to think about innovative strategies and practices. Set both achievable and stretch goals for the business and think about new processes or improvements that could be made. Facilitate staff brainstorming sessions or allow time for staff to research and read, this short-term time sacrifice could easily translate to long-term cost savings if a staff member finds a new timesheet or expense process for the whole company that is more efficient than what is currently being used.
Bitcoin – it’s all the buzz right now, and what better to throw something into the limelight than to break a few records. Even though over the weekend we’ve seen the Bitcoin price decline from $6,150 to $5,880, it’s still up overall by just a casual 42% in month alone.
"Bitcoin was designed to operate outside of the influence of governments and central banks, and is doing exactly that," said Iqbal Gandham the retail trading app eToro’s Managing Director, who have been witness to the massive increases in the cryptocurrency’s trading volumes. At less than nine years old, Bitcoin is still seen to be in its juvenile, or say teenage years; unpredictable, impulsive, and highly volatile, especially when staked up against the more traditional and conventional and currencies and assets.
But just how far could the cryptocurrency go? Analysts have suggested the potential for the price of Bitcoin to teeter around the $10,000 mark if it can achieve $7,000 over the next few days, and many investors seem to be shrugging off warnings on the risks of buying into this booming market.
Swiss bank Swissquote opened their Bitcoin trading two months ago and Ryan Nettles, their Head of FX Trading and Market Strategy comments that ”people are just wanting to be part of it", stating that much of the interest that they’ve been seeing has come from brokers, banks, and hedge funds. Interest has been strong, and maybe a bit too strong for some countries, with the central banks in Russia banning cryptocurrency trading websites while their president Vladimir Putin warned of the "serious risks" of this ballooning market.
Yet it seems all news is good news, as it adds fuel to the Bitcoin fire which is raging; Nettles further comments that “the interest really stems from the media hype." SEMrush, a data analytics specialising in search engines such as Google, recently released figures demonstrating the rising Bitcoin price had a 91 per cent correlation with people’s Google searches, indicating that the school thought, “there’s no such thing as bad publicity”, reigns true in the current world of Bitcoin.
I remember when I first realised that my Messenger was being monitored, or was at least having algorithms applied to it that helped it to recognise what I was talking to my friends or family about. It was then feeding me advertisements through my Facebook feed that were centred around these conversations – flights to Australia, travel insurance, or the latest online deals for Jamie Oliver’s latest cookbook. All I could think of was “the nerve!” – to be monitoring my private messages between myself and my family or friends and then dishing me up information or trying to get me to consume products that had been mentioned or that had come up in conversation – how very invasive, intrusive, and what an infringement on my personal privacy.
Don’t get me wrong, there are some online places where I do expect that my conversations are being monitored – I just didn’t realised that it was happening within Messenger and then being used across its vertical products for consumerism and commercial gain. I suppose maybe I am just naïve?
Online platforms however are a good example of where I do expect that the communication between myself and my buyer/seller are being monitored. As a Freelance Writer, I have a lot of communication with different people across the world via online job and freelancing platforms, with people that I have never met with before, people I have never seen face to face and most probably never will. Across these platforms I suppose I hold a degree of expectation that, for both parties protection, our conversations via messages or emails within the platform are being monitored, recorded, and stored somewhere somehow out there in all those zeros and ones. And, that if I ever needed to raise a complaint or I had an objection to something, I would be able to draw upon this information. But it turns out that this is not always the case.
It wasn’t that long ago that all through the media were the stories of how WhatsApp were refusing to build a backdoor for the UK government, who ultimately were looking to these platforms in order to gain intel on the world of terrorism, helping them to see into the black holes which are created by platforms like WhatsApp and Telegram. Applications such as WhatsApp use end-to-end encryption that scramble messages through a series of code; so there is no visibility over the content within messages that are sent, and WhatsApp only ever see metadata such as an account name or email address.
In response to this cry for help that the UK government, Apple’s Tim Cook warned that weakening the encryption of these Apps would ultimately hurt the public, as terrorists would always just find new ways to communicate. Furthermore, WhatsApp responded with the statement - “we carefully review, validate, and respond to law enforcement requests based on applicable law and policy, and we prioritize responses to emergency requests.”
Gumtree is another example of where this encryption between private sellers and other parties reigns supreme – with a quote from their FAQ’s stating “if you’re a private seller, we keep email addresses private – messages will come from a unique address that looks a bit like gobbledygook.”
On one hand I can understand and support this, on the other hand though, when/if you ever get caught in the spot where you’ve been hard done by or you know you’re in the right, and you just need the help of these platforms to prove it, the encryption that is employed just frustratingly gets in the way of justice and a lawful outcome.
Brexit – there is 100% no question around the UK government’s current stance on immigration, speaking prolifically over recent times about the “tightening up” of immigration and the firmer controls they’re looking to gain. And it seems to be having an effect, as the UK is already seeing thousands of EU citizens start to leave the country as well as less people coming into the country to settle and live.
Recent statistics released from the Office of National Statistics (ONS) show that the UK’s net migration has fallen by 25% in a year period, with Seamus Nevin, head of Employment and Skills Policy at The Institute of Directors warning that the UK could be staring down the barrel of a “brain drain”. With the continuing Brexit uncertainty over the rights of EU citizens, an environment is being created which is seeing a depletion in the number of skilled workers who are already living in the UK as well as those skilled European’s who are choosing to emigrate to Britain.
European immigrates have long been adding value to Britain’s economy by contributing to vital UK industries. Take for instance the recent research conducted by Opal Transfer which surveyed more than 4,000 businesses on their profitability throughout 2014/15 to 2015/16, and found that SMEs steered by a British Director grew at a rate of 4.5%, whereas those which were steered by a European Director grew at a figure over double that – at 10.5%.
Managing Director of Opal Transfer Gita Petkevica has said that “‘the UK business environment has enabled many of these businesses to flourish. It is important that the UK government continues to put forward policies that encourage the best in Europe and around the world to do create businesses and jobs here.”
At this stage it is still unknown what long term effect will Brexit will have on the UK economy, however the common assumption that Britain-based European led companies would most likely relocate to Ireland or continental Europe if it meant they could continue trading within the European single market seems like a pretty solid one, especially if the CEO or Managing Director isn’t tied to Britain.
Planning the office Christmas party; it’s no small feat. Regardless of how big or small your workplace is, getting the Christmas party right and planning an event that everyone enjoys can certainly be a pressure-filled task. Opinions and expectations can run high, so let’s look at some of the key elements to cover when planning your office or work Christmas party that will ensure you cover all the bases and organise a well thought out party with all the trimmings:
- Plan ahead – It might seem like the last Christmas party was only a few months ago but the more time in advance you can start planning the better, especially if you’re after a sought out venue or location; activities can get booked out quickly.
- Discuss with your boss or management, set a budget – It could be the first Christmas party you’veplanned, or your tenth, however it’s always a good idea to have even a brief chat with the powers that be and get their thoughts on the festivities so you have a clear understanding of their expectations. Make sure you’re clear on the budget as well so you know what you have to play with when planning.
- Schedule it out – When you’re planning for the day make sure you think about the details and try to visualize the exact proceedings for the day. Making an excel spreadsheet and thinking about the logistics of the day, step by step, will help to ensure that you’ve organised everything that you need to.
- Theme it; it’s not only about the food – A great Christmas party has some entertainment or activity as well that gets people mingling. Your venue may have activities or entertainment as part of their offerings, or maybe you make your party a dress up theme; giving people something fun to do can take the focus off just the food and the drinks and help make for a great day.
- Have fun and get photos – When it comes to the big day, make sure you take conscious moments throughout the day to relax and enjoy it; you’ve done a lot of organising to get it to this point. Make sure you remember to get photos as well, they always make for some great reminiscing over the next few days and weeks at work at what a great celebration the day or night was.
Your company could just be starting out or maybe you’re looking to raise extra capital for a one-off project, regardless of the motivating factor, if you’re operating an SME there may come a time where you will need to raise financing to either get your business either off the ground or help to get it in front of the pack
Unfortunately, sometimes this can be a more difficult feat for the smaller guys out there in the trading world; just as the MacMillan Committee report found in 1931 when they examined the financing of SMEs and concluded that raising long-term finance in amounts of less than £200,000 was extremely difficult. This shortfall of amounts was coined the ‘MacMillan Gap’ and, despite over the years there being a number of new initiatives and changes to the marketplace that provide more options and ways to raise finance for small businesses, it can still be a tough gig for SMEs to find the finance they need.
So what are some of financing options for small businesses?
- Traditional lenders – A small business loan from a bank is always an option. Keep in mind that it can often be a more difficult sell if you’re needing the loan for the initial start-up capital as opposed to if your business is already up and running. Also consider the credit profile of you and/or your business and what kind of collateral or assets you’re able to offer as security on the loan.
- Investment companies or corporate venturing – This is where large, already established companies look to invest funds in SMEs. International news agency Reuters for example, put money aside for their “greenhouse fund” which spreads pockets of investment funds across various small businesses within the technology sector, banking on the fact that a proportion of the companies that they invest in will become large and successful in the future.
- Crowd funding – A lot of hype has been surrounding this finance raising method recently and there are a multitude of different crowd funding platforms available all with their additional benefits, “freebies”, and selling points. Make sure you do your research and read all the terms, conditions, and fine print before deciding on the platform that’s right for you.
- Personal networks – Dependant on your circles, this can often be one of your best shots for getting the finance to get your small business off the ground. Ensure you take it seriously and pitch it professionally to your potential investor, treating it as if you were standing in front of a large company. This area however, could be one of the more difficult areas, should things go wrong, resulting in lost relationships/friendships.
Lisa's Blog: No piece of the pie
for Scottish Small Businesses
The Flexible Workforce Development Fund
Does your business pay into the UK Apprenticeship Levy? If not, then it’s unlikely you’ll be able to take advantage of the £10 million Flexible Workforce Development Fund (FWDF) which has just been announced is up for grabs by the Scottish Government.
The Flexible Workforce Development Fund (FWDF)is a fund set out to deliver an in-work skills training programme to businesses throughout Scotland. With a clear focus on the up-skilling and re-skilling of Scottish employees, the FWDF is in its pilot stage, with the project being given a one-year trial.
Jamie Hepburn, Minister for Employability and Skills, said that this ”unique pilot scheme will enable Scotland’s employers to make training and skills development available to their staff, addressing knowledge gaps and improving productivity. Training and skills development is beneficial for employees of all ages and levels and I would encourage all organisations subject to the levy in Scotland to get in touch with our colleagues to learn more about the opportunities available to them.”
However, as Hepburn hinted at, this fund is only available to those businesses that are subject to and have been paying into the UK Government’s Apprenticeship Levy. Introduced on 6 April 2017, the Apprenticeship Levy is payable by all UK employers who have an annual pay bill over £3 million, which accounts for all payments to employees including wages, bonuses, and commissions.
With many small businesses not meeting this £3 million pay bill threshold and therefore not paying into the Apprenticeship Levy, it means that the majority of Scottish small businesses will not able to access to development and training fund for their business or for their staff.
Andy Willox, Scottish Policy Convenor for the Federation of Small Businesses’ (FSB) has said that “unfortunately this fund will do little to help smaller employers up skill their staff, especially those who are looking to address skills shortages as the UK leaves the EU. The Scottish Government should think again.”
Making your business more environmentally friendly doesn’t have to mean massive office overhauls or major operational changes, simple things can be done bit by bit to give your business an eco-friendly remodelling. The changes you make will not only help the environment out, but can also save your small business money in the long run, as reducing, reusing, and recycling can cut down on expensive overheads and help to minimise your business’ outgoings.
Here are four simple eco-friendly tips for small businesses to easily get you started:
- Recycle – Recycling isn’t only about the paper in the photocopier, the scrap paper bin, or separating out the glass, plastic, and aluminium waste in the kitchen, also consider how you can recycle office furniture and equipment. Reupholstering tired office chairs or getting computer monitors serviced instead of adding them to the rubbish pile can often be cheaper than buying these new if you’re looking to upgrade things around the office. Finished with that old desktop computer? Consider how you’re disposing of it and whether or not some parts could be salvaged by someone else who might find them useful
- Turn off and shut down – Get your employees into the habit of turning off their computers and monitors when it comes to the end of the day. On one hand it helps to save power (saving potentially up to 50% of that days energy), but it’s also been proven to increase the lifespan of electronics as well – a money saving win win. Also ensure that the last ones out are turning off all the main lights, a simple but an effective way to save on power for the environment and save on electricity bills for you.
- Buy local – Supporting the local community is not only good for the economy but is also a key way your business can help to minimise its impact on the environment. Having your stationery products delivered from a local supplier will save on emissions while also helping out companies often deemed the “small guys”.
- Buy sustainable – From cleaning products to energy efficient light bulbs, choosing sustainable products wherever you can makes a positive difference to the world around you. Choosing sustainable growth forest paper for your office paper, selecting biodegradable cleaning products, and buying in bulk to reduce packaging waste (and of course save you money) are just some simple ways to use your purchasing power within your small business to make eco-friendly contributions to the world around you.
Cheques have been around for centuries, actually nearly four to be exact. And although you might personally struggle to remember the last time you wrote or cashed one for your own personal reasons, 75% of UK businesses say they have either written cheques by received payments by cheque in the past month.
These are findings which have recently been released in a report by Cheque & Credit Clearing Company (C&CCC), who conducted market research in July 2017 on the use of cheques across consumers, businesses, and charities. C&CCC surveyed 1,000 UK businesses over the phone, asking questions centring around their use of and attitudes towards cheques, their knowledge on cheques, and the impending change to the banking industry in regards to cheque imaging.
Cheque imaging, which enables banks to process and clear cheques faster and more efficiently by using scanned digital images, gives customers the ability to pay cheques in via secure mobile banking apps,smartphones, and tablets. Chief executive of the C&CCC James Radford, comments that the development of cheque imagine will "put cheques firmly in the 21st century" and benefit "the many individuals, charities and businesses that regularly use cheques". Set to be introduced by some banks at the end of October 2017, and by all banks by the second half of 2018, although this change in the industry has long been on the cards, the C&CCC report found that only 20% of UK businesses are aware of the cheque imaging introduction, a statistic which is largely similar to 2016 (at 21%).
Other interesting statistics relating to the use of cheques throughout UK businesses include:
- The average number of cheques written per month by businesses has been decreasing since 2008, from 26 then, to 5 per month now. This is with the exception of last year in 2016, when the number jumped back up to 12 from the previous years of 7
- By far the largest use of cheques is for paying a trade supplier, with 72% of businesses saying this is what they are writing cheques for, followed by other ad-hoc payments to businesses at 47%, and regular business commitments at 33%.
- 75% of businesses would have some degree of problem (major or minor) if they were unable to write cheques, stimulating the questions as to whether or not there needs to be further education for UK businesses on alternative methods to paying and receiving money
But what is the expected change in the use of cheques across business industries? C&CCC’s studies show that, over the next 3 years, 38% of those businesses who are currently using cheques will no longer.
It’s safe to say that we’ve all noticed it, felt it, or have been talking about it – the recent drop of the pound Sterling. Predicted by many economists, the GBP suffered the biggest intraday drop ever in its history the morning after the Brexit vote was announced, and it’s continued to drop ever since. In the last year it’s fallen to multi-year lows, including a 16% drop against the Euro, and more than a 13% fall against the US Dollar, along with a swagger of decreases against other currencies as well.
Most economists are expecting to continue to see the pound drop as Brexit negotiations progress, however slowly that may be. The longer the EU and UK take to decide on the specifics of “divorce” payouts, trade deals, or the rights of EU citizens, then the longer we’ll all have to stand on this shaky ground and the unlikeliness that we’ll see the exchange rates go back up in favour of our national currency.
But it’s not all doom and glow, as the flow on effect from a weakening Pound Sterling does have its ups as well as its downs. A slumping GBP can make it particularly tough for those people who purchase foreign currency, or any other goods or products outside of the UK. However, for those with business in the tourism industry, it’s proving to be a much better story. Recent June reports from the Office for National Statistics (ONS) show that a record number of overseas visitors are visiting the shores of Britain, up 7% on the same month a year ago and with a 2%, or £2.2bn, spending increase. With the majority of these overseas visitors being from Europe and North America, one would hypothesize that a major contributing factor to this increase is the better performance of their currencies against ours, making a quick jaunt for business or pleasure to the UK more possible than ever before.
Regardless of who in the company is making the pay rise request, often the conversation can come out of the blue and you may feel taken aback. It’s important to remember though, that by making a pay rise request, your employee is actually showing an investment in the company, coming to your first and raising the difficult question before looking outside of the company family for other opportunities which may exist.
To give yourself the best chance of handling your employee’s pay rise request tactfully and diplomatically, here are three key tips that are helpful to remember if and when an employee requests a pay rise:
- Have a clear process in place – having a system where employees fill in a self-evaluation form is not only getting them to think their raise request through and justify it, but this also creates time and space for you to think it through thoroughly and consult other people within the business if needed.
- Take it seriously – your employee has probably worked up a lot of courage before asking for their raise, so ensure you take the request seriously and don’t play it down. Having a system in place like a self-evaluation form as previously mentioned, helps to create this meaningful tone as well. If the request has come out of the blue, you can then set a date and time for a more formal remuneration meeting.
- Do your research – before going into any formal remuneration review ensure you have done your research, both in terms of the individual’s performance and the current average salary in which the market is paying. Make sure this takes into account not only the position of the employee, but also the industry that you are operating in.
Denying a pay increase can be demotivating for employees, so if it’s deserved and the business can support it, then it’s important to reward your well performing staff. If your company can’t support the pay increase, consider other alternatives that may be possible such as extra flexibility with working hours, additional allowances at work, or a generous voucher for a dinner out with a loved one to show them that they are a valued member of staff. Be honest with your employee as to why you can’t offer them an increase at that stage in the game. If it’s regarding their work performance, then ensure that they clearly understand the steps that are in their control to help them achieve a yes next time around. And if it’s because of the company’s performance, then be honest with your employee and set another date for a review so they know the discussion is still on the table; ultimately they are bound to respect the transparency that you are offering and this will help to ensure they remain committed to your business.
Branding; it’s an essential ingredient to the success of any business. Customers look for companies with reliable, trustworthy, and likeable brands because at the end of the day, no one would choose to work with or engage with a brand that isn’t credible. But when we talk about branding, exactly what does that encompass?
Branding doesn’t just begin and end with your company’s logo, sure, this is part of it, but it’s also about a much bigger picture; about creating a unique name, image, feeling, and emotional connection with your customers when they think of your business.
So how can you create a strong brand for your business? The following are some branding tips that will help your company to truly connect with its audience and clientele base, leading them to only think of your business when they find themselves surveying the market place:
- Clearly define who your audience is and understand them – recognise what motivates them and what they look for when they’re looking to engage with a business in your industry.
- Speak a language that your audience comprehends – the language you use to communicate to your audience should always align with that group; a law firm would communicate differently to the audience of a day care centre. Make sure you’re relevant.
- Make it personal – think of your company as a person with its own personality; for example, your company might be providing an online service to your clients, however, never forget that ultimately people buy services from people, so think of your company as a person that you would like to do business with.
- Be consistent – companies and brands will evolve over time and that is expected, but it’s no good if your business’ logo is changing every month. Furthermore, make sure you’re being consistent with delivering on any promises you make to your customers, ensure you pay your suppliers when you say you’re going to; providing a high quality and consistent customer service should always be a priority.
- Make sure your company has a clearly defined mission and vision statement along with strong, simple and easily digestible values. Trustworthy and credible brands stay true to these at all times and throughout their day-to-day business will continually reflect on these; from the way your staff interacts with your customers, to the way the company interacts and supports its staff – a well branded company remains true to their belief systems both internally and externally.
Are you staring down the barrel of bank overdrafts, seeing a slowdown in profit growth, or continually finding yourself with the unpleasant task of chasing late payments? As Brexit negotiations are in full swing, now is a pivotal time to ensure that your small business is successfully managing its cash flow; and, as Philip King, Chief Executive of the Chartered Institute of Credit Management (CICM) has said, “fixing the roof while the sun is still shining will help to head off potential issues in the future”.
Periods of uncertainty and dips in confidence when it comes to the business world aren’t often a key ingredient when it comes to the recipe for business success, regardless of whether that business is small, medium, or large. So let’s look then at some tips you can employ that will help you to stay abreast of cash flow issues, forecasting, and credit management and that will put you in good stead in this currently uncertain Brexit time:
- Make sure you know what’s going on with your customers and clients. What does their environment and business landscape look like? Is there potential that they could move their headquarters off UK shores? Are they likely to cut back on the services or goods supplied to/from you?
- Reconcile your payment terms to those of your suppliers. Is there a gap or an overlap between when you’re expecting payments to come through versus your suppliers’ or customers’ payment terms? If the two terms do evoke a payment break make sure you’ve got a contingency plan to fill this gap just in case you need it.
- Ensure you have a robust process for dealing with outstanding invoices and late payments. Never be shy about claiming the late payment interest you’re entitled too – as long as it clearly states so on the invoices you are issuing.
- Exchange rates are bound to move so ensure you have reviewed your budgets and forecasts so you that know how these ups and downs will affect your cash flow.
For more information or guidance on helping your business to get on top of your cashflow or credit management, contact one of the expert team at Chamberlain McBain today.
Late payments when you’re a small business can be crippling. From paying staff, to paying suppliers, rent, taxes, and all the other outgoings; small businesses rely more than ever on the money coming in so the money is there to go out.
The Federation of Small Business reports that approximately a third of payments to small businesses across the UK are late, and with this, it results in around 50,000 business deaths per year. With an average payment of £6,142 being owed to businesses in each late payment debt, this is totalling a whopping £2 billion pounds a year across the nation.
The problems that flow downstream for small businesses who struggle with late payments being owed to them involve cash flow difficulties, bank overdrafts, and a slowdown in profit growth; late payments are crippling. In fact, reports show that of the above problems, 37% of small businesses have had to deal with cash flow problems, 30% have had no other option but seek out an overdraft, and 20% have seen a slowdown in their profit growth – all a result of having to deal with late payments.
If late payments are a problem for your business, then speak with Chamberlain McBain. Chamberlain McBain are a cost effective option when you need to speak with a team of professionals. Unlike most other services, they charge only for the work carried out, in the most part limiting costs to those recoverable from the debtor or offering a fixed cost. There are no nasty percentages of the debt taken nor do they charge inflated hourly rates, instead they provide a cost effective team of professionals who can work with you to start the formal debt recovery process and help your business out of the dark and into the light of day.
Stay tuned for next articles article where we look at some tips you can employ in your small business that will help you to manage your cash before it gets too late.
Hailing from Australia, and then living for the last 8 years in New Zealand, what I find the most fascinating about travelling throughout the European continent is just how easy it is to cross borders from one country to another and quite often, you don’t even know it’s happened. This simply isn’t something that you encounter when you live on an island country, as traveling into another country isn’t just something you can “accidently” do. In Europe though, if you haven’t seen the “Welcome to Austria” sign (if there even is one?), maybe the first thing you’ll notice is a change in the road signs, the language used in advertisements, or the licensing of the car registration plates.
I can remember one occasion recently when we were driving from the Netherlands to Belgium, the one thing we noticed that made us realise we had in fact just crossed the border was the change in the wind turbine design; the Dutch wind turbines standing almost twice as high as their smaller, orange striped Belgium counterparts. But what becomes strikingly obvious once you step out of the car or the bus or the train is the difference in costs. Obviously countries’ economies differ, but it just always intrigues me as to how we cross these invisible lines, and so quickly the price of a pint of domestic beer can change from 1.15€ to 3.50€ - a 204% increase.
For my latest boarder cross from the southern Czech Republic town of Český Krumlov into Linz, a city in upper Austria, this was much more obvious. A 2 hour train ride in the Czech Republic equated to about 4€; a 2 hour train ride from Linz to Munich, Germany – 60€.
But at the very basic level of service or goods delivery, what is the different? My favourite example of this over the past 2 weeks travelling was my Czech Republic experience aboard a Regio bus - first-class service that goes beyond any experience I’ve ever had on another country’s bus transport system; in fact, it was something more akin to travelling with an airline, and not a low cost, no-frills airline at that. Individual screens in the back of each seat that played movies, games, or music, an attendant that strolled up and down the aisle handing out headphones, newspapers, and magazines, as well offerings of tea, coffee, or hot chocolate. And all this for 6€? I can tell you it would’ve easily cost 5 times this if I was travelling on that same bus in Austria, without a doubt.
After over half a million companies started paying higher business rates in April this year, and in turn, Chancellor Philip Hammond promised a £300 million relief fund to help those small businesses which had been hardest hit. The hike resulted in some businesses facing increases of up to 50% on their interest rates, which is a hard pill for any business, let alone those in the SME sector, to swallow. And yet, although businesses started paying these higher rates in April the current lay of the land still sees the majority of them holding their breath as to when that relief is going to come.
Perhaps one could think that there have been delays because of the general election. But then again, it was only back in April that Communities secretary Sajid Javid said that there would be no delay to the relief provided to small business because of the general election and that “it’s going ahead, exactly as planned. Councils are free to start using the scheme and helping local businesses.”
However, this is not the case, and the majority of those businesses which have been affected have not seen any of this relief come their way. Mike Cherry, National Chair of the Federation of Small Businesses (FSB), has commented that “55% of small businesses told us they were planning to reduce, postpone or cancel investment in their business. Additionally, 19% of those businesses affected by increased rates said they may ultimately consider closing down or selling their business as a result of the hikes in their bills.”
In response to these delays, and to try and act as a much needed catalyst, the FSB recently sent a letter to Javid asking for the department to urge local councils immediately to implement their local relief schemes. But exactly when may these reliefs come? The FSB and Cherry have further predicted that, “looking at the current timetable, businesses won’t get any relief for another month or two at the earliest.”
Cyber security is a hot topic, especially after the recent “brute force” Westminster cyber-attack which compromised around 90 email accounts through MP’s weak passwords. A “brute force” attack is where a trial and error method, often facilitated by automated software, is used in order to determine security information such as a PIN number, or in this case, user passwords for their email accounts.
The hackers of this attack repeatedly probed passwords of MPs which were deemed “weak”, forcing parliamentary officials and administrative staff to lock politicians out of their email accounts while they tried to minimise the potential consequences.
Situations like this raise the important question as to what security measures your business has in place to ensure IT systems and information is kept as secure as possible. It’s not just company financial data which hackers could gain access to; depending on your business, it could be anything from your customer and client’s sensitive information to complete payment information. It doesn’t matter about the size or shape of your business or your industry – there are risks for every business.
So what can you do to protect your business against a cyber-attack?
- Protect yourself against email spam, phishing emails and ransomware – these are often the methods in which malicious software can get into your IT system. Ensure you have a trusted, reliable anti-virus and protection program installed and keep it updated.
- Ensure you have backups of data on an external hard drive, server, or cloud-based services.
- Ensure all your staff are aware of what they can do to protect themselves and their data, including making sure their passwords are changed regularly and make use of a variety of special characters, numbers and capital letters to increase their strength.
A further step of action you can take is to ensure your business is as protected as possible by completing the government backed Cyber Essentials certification - a scheme that, once implemented correctly, can stop the majority of cyber-attacks. For further information on this click: here.
Forecasting is crucial to any business – small or large. Helping you to manage your company’s finances, they are quite simply a future prediction of your business’ financial performance. Obviously, when you’re first starting out, this is a difficult thing to project; how do you know what could potentially be on the cash flow horizon when you have no real historical data or past accounts to be informed from?
Regardless of this, it is important to ensure that you are creating good routines and habits for your business that will carry you into the future. If you get into the good habit of closely monitoring and reviewing your finances on a regular basis now, then you’ll be able to better predict and foresee any potential problems that could be down the line and implement strategies to protect your business from potential downfall in the future.
So what should you be considering when it comes to your small business forecasting?
- Start-up costs – these include any legal or accounting fees, insurance, the cost of fitting out your office/business for trade, marketing, funding to tie your business over in the beginning stages before you’re able to invoice etc.
- Sales – this can be difficult at the start of any business. Consider basing this on industry benchmarks and market research.
- Expenses – such as operational costs, including rent, wages, advertising etc.
- Cost of goods – this includes the cost of any physical products you sell and the amount attributed to their production or their stock. It’s important to keep in mind that if you’re forecasting an increase in sales and you’re selling a product, then obviously the cost of goods will also increase as they are both connected to one another.
- Cash flow – this provides an overview as to all the money coming in and out of your business and will help you estimate and forecast when you may have extra cash available or when it may be lacking.
Forecasting for your small business as accurately as possible is worth getting right from the beginning as it provides you with the overview of your company that will give it the best chance of survival in the long run.
According to the Department for Business, Energy and Industrial Strategy there were 5.5 million private sector businesses at the start of 2016 - a 2m increase on 2000. Small businesses account for 99.3% of all private sector businesses. SMSs employ some 15.7m people, around 60% of those in the private sector and the combined turnover of SMEs equates to £1.8 trillion - 47% of all private sector turnover.
No one starts a business thinking that there will come a time in the future when they will cease to trade. Being able to objectively look at the situation your business is in and recognising the warning signs is paramount; coming to terms with the fact that you need to set the wheels in motion and seek our professional guidance is the first step to swallowing the tough pill of potential insolvency.
As the Director or CEO of a company, there are two questions which you should look to have answered in order to ascertain whether or not the company should be moved into a phase of administration:
- Do the company assets exceed liabilities?
- Can the company pay monies owed to debtors when the time comes?
If the answer is no, then it’s looking likely that the company is cash flow insolvent and as a Director, it is your responsibility to recognize this otherwise you could face potential harsh legal penalties and repercussions..
It could be normal for the company accounts to have its cash flow ups and downs. Given the nature of the business and natural business cycles, it could be in the best interests of the company to battle through the rough patch, or patches. However, when these patches are no longer the exceptions but instead the norm, then that light at the end of the tunnel may be no longer be feasible to work towards.
Once the company is entered into the administration or liquidation process, it is the job of the insolvency practitioner to consider the conduct of those in positions of accountability to determine whether or not they have acted in a responsible manner or not. Therefore, as a Director, it is important to be able to demonstrate and prove from the beginning that you were taking all matters in due consideration and professional advice was sought at this stage.
There are different procedures for companies’ dependant on whether you’re operating in England and Wales or Scotland and Northern Ireland so it’s important to keep this in mind and ensure you’re seeking out the correct information and advice dependant on your location.
For more information regarding insolvency and administration, talk to the experts at Chamberlain McBain
Uncertainty reigns supreme as the 2017 General Election has resulted in a hung parliament – with the Tories dropping a staggering 12 seats, they have been unable to secure the majority that they were hoping for in advance of the soon approaching Brexit negotiations on 19 June. Doubts within a political landscape never create the best environment to see small businesses flourish. With business owners and the likes unsure what policies will be rolled out or ruled out, the path for the foreseeable future is currently a hazy one. In times like these, growth plans can be put on hold and business investments and advances can be halted all the while business owners sit tight to wait for the government to sort themselves out. Of course each political party had their hard and fast pledges and promises relating to their differing policies and, with a majority party ruling, this would’ve been clear cut. But what does the 2017 General Election hung parliament result mean for small businesses and what was in the Conservative party pipeline that could now be moved to the side line?
- Full business rates review – After the April 2017 business rates review resulted in big tax increases for business owners, the government promised a re-evaluation of the rate review system and nationwide review.
- Digitalisation of Tax – Set to be introduced for all small UK businesses from 1 April 2018, this would see the frequency of small business owners filing company taxes go up to four times a year.
- Export voucher scheme and tax credits – Initiated by the Small Business Taskforce, which was created in 2016 by the government to be the voice of UK small businesses in the international market, export vouchers were coined to offer small subsidies for advisory services for overseas trading for those first-time exporters.
With all of these movements and policies being designed in a time of a more stable political environment, now it would seem as though the priority needs to be given to forming a workable government, which in turn is likely to see these pushed onto the back burner for the foreseeable future.
Election week is here, and while in previous posts we’ve taken a closer look at the proposed changes in employment laws and taxation policies, this week we take a snapshot on the SME election promises when it comes to skills, infrastructure, and investment.
Employment laws are a big ticket item and so are the proposed policies regarding the nation’s skills. On the Labour side of the fence, they are looking to:
- Create a National education Service for England
- Protect the funding available to SMEs that hire apprentices
- By 2022, double the number of apprenticeships which have been completed to NVQ level 3
The Liberal Democrats are pledging to:
- Double the number of businesses
- Deliver more high-level vocational skills by developing more national colleges
- Encourage all schools to participate more with businesses while also increase the advice which is given in schools in regards to self-employment and entrepreneurship career paths
The Tories are interested in:
- Launching the new T-Levels, a vocational qualification which covers 15 different subjects including engineering, health and sciences, design, digital and construction
- Delivering over 3 million new apprenticeships by 2020
- Establishing new institutes of technology in every major city in England
Rail and road investments are something that all 3 major parties agree upon, as well as them all being behind the HS2 and Crossrail 2 rail projects. Furthermore, they also agree that more housing should be built along with more access for homes when it comes to high-speed broadband internet.
Labour are further promising to:
- Over the next 10 years, invest £250bn through the creation of a National Transformation Fund
- Move previously privatized rail companies back into the public sector, as well as utilities such as water, energy and the postal service
- Increase the budget for research and development by 3% by 2030
On the infrastructure and investment front, the Tories are promising:
- To also create a new fund, the National Transformation Fund, which will invest £170bn into research and development, housing, infrastructure and skills
- To increase the budget for research and development by 3% over the next 10 years
Last week we dived into the different parties proposed employment law promises and this week we’re taking a closer look at the pledges being made ahead of the 2017 election in relation to taxation. There have been many cry outs recently requesting party leaders simplify the, what can be, tiresome and onerous VAT tax process. However, despite all the parties promising to sit tight on VAT rates and not increase them, there has so far been no mention of simplifying the complicated process, which would in turn make it easier for small business to complete their returns come tax time.
So what is specifically being promised then for the 2017 election by the different parties when it comes to taxation? Well Labour promises to:
- Complete a full review of business rates
- Increase income tax for those who earn over £80,000 per year
- Increase large business corporation tax
- Introduce a lower small profit rate of corporation tax for SME’s
- Axe quarterly reporting for all businesses with an annual turnover of under £85,000
- Hold National Insurance and VAT still; there will be no increase to either of these
A cut in business rates are first on the agenda for the Liberal Democrats, with this being a major priority for the party. Furthermore, they are pledging to:
- Complete a full review of business rates (in combination with the aforementioned business rate cuts)
- Increase income tax by 0.1%
- Reverse the Conservative’s cuts to corporation tax and capital gains
- Roll out a new Entrepreneurs scheme that helps those people starting a new business by providing £100 per week for 6 months to support their living costs while they get up and running
The Conservatives are standing strong with their pledge to not increase National Insurance, a promise that was a complete backflip on their originally planned budget. The Tories have then further promised:
- To increase personal allowance for income tax to £12,500 per year as well as raising the higher rate threshold to £50,000
- Hold strong and not increase VAT
- Cut corporation tax to 17% by 2020
Employment laws, taxation, investments, skills, infrastructure… the list goes on as to the different political parties promises regarding small business’s and their election promise. SME votes hold a lot of power when it’s comes to Britain’s elections and employment laws are a big ticket item, so let’s have a look at the major parties and the Small Business election promises that are being made ahead of the 2017 election.
Labour promises to:
- Increase the living wage to £10 per hour by 2022
- Ban zero-hour contracts
- Put a stop to unpaid internship
- Increase the minimum wage for those aged 18 years and over
- Increase the power of trade unions
- Improve employee rights (including those with “temporary” employment) so everyone has full rights from their first day on the job
- Increase paid paternity leave
- Strengthen the rights for women at work as well as those who have children at home
- Change the law surrounding the “gig economy” – a term coined to define the prevalence in the employment market of short-term contracts or freelance work (as opposed to permanent employment). Labour proposes a change to this so that a worker is assumed an employee of the company unless specifically stated and proved otherwise by their employer
- The creation of four new public holidays
The Conservatives are awaiting the publication of the “Taylor Report”, which, compiled by former Adviser to Tony Blair Matthew Taylor, will look further into the “gig economy” and self-employment. Once this is out, there is an expectation that they will have further policies surrounding this. Furthermore they also promise to:
- Increase the costs for small businesses that employ non-EU workers by doubling the immigration Skills Charge to £2,000 per year
- Provide a national insurance holiday for businesses who agree to take on workers with disabilities, mental health issues or are an ex-offender
Liberal Democrats share some similarities with the proposals from the Labour party as they promise to:
- Shake up the new employee rights – like Labour they want workers to have full rights from day one
- Put an end to zero-hour contracts
- Create a formal right for employees to request a fixed contract
- Uphold the current rights under the EU law such as maternity leave and the expansion of paternity leave
With the inevitable launch of the new pre-action protocol on 1 October this year, which aims to encourage the communication between businesses and individuals when it comes to outstanding debt claims, now is the perfect time to review the practices that your business follows that helps you succeed when chasing down your outstanding small business debts. According to research conducted by Direct Line for the 2015/16 financial year, small businesses in Britain wrote off £5.8bn of bad debts, with 10% of those companies that had written off some debt indicating that they had in fact stopped chasing amounts owing £100,000 or more. A further third declared in another study, that they were hesitant to pursue slow-paying customers as they were empathetic to their situation and didn’t want to upset them further or make them feel embarrassed. However, the world of small business is tough, and late payments and unpaid monies can be the curse, and downfall, to your small business. Consider the following tips for when chasing down your outstanding small business debts:
- From the very beginning, ensure your customers know and understand your credit terms
- Ensure all invoice details are correct, this avoids any confusion and ensures that the invoice is in fact payable
- Issue invoices and statements of accounts regularly – so there is no doubt or misconception as to where the customer’s account lies
- Invoice early and start chasing payment as soon as it is missed. Acting quickly here is essential and a personal phone call is often the most effective way of understanding the situation and what the hold up with the payment might be. This is also an effective way of resolving the matter before things snowball. Listen and try to understand the context of everything. Discuss a payment plan or strategy that is going to work for both parties
- Keep the lines of communication open, and be persistent
If you feel as though you have exhausted all the options, however your business is still not seeing any results, then perhaps it is time to start the more formal debt recovery process. This is when you should speak to Chamberlain McBain.
The times are a changing - on 1 October to be exact, and this time with the adoption of the new pre-action protocol for debt claims, that aims to encourage communication between the two parties in a hope that the issue will be resolved before getting into the courtroom. The concept of this new protocol goes as far back as 2010, when Lord Justice Jackson endorsed the idea of the establishment of a pre-action protocol (PAP) for debt claims. Seven years and a number of draft proposals later, this new PAP is applicable to any business (including sole traders) who are chasing outstanding debt payments from individuals (not including business-to-business debt, except where the debtor is an individual like a sole trader and although not specified, an unincorporated partnership) and defines the issue management the Court expects before a Claim Form is issued. One of the key changes is reflected in the “Letter of Claim” form, which has been bulked up and now calls for more attention to the details surrounding the specifics of the debt. This includes things such as detailing, if an oral agreement, the where, the when and the what words were spoken by both parties in order to create the agreement. Or, if a written agreement, specifics such as the date, the parties involved and an ability for the written agreement to be able to be provided by the creditor. Furthermore, a statement of accounts attributed to the debt needs to be enclosed, ideally up-to-date, but if this is not possible, then the most recent statement which is possible including the amount of interest incurred. The debtor has a 30 day window to reply; failing this, the creditor then has the ability to instigate the court proceedings. The impact to creditors could be significant as some debtors may well use the 30 days as a way of extending credit terms and by delaying payment may impact on cash flow. Delaying the issuing of the demand letter will surely become a thing of the past as Credit Controls will have to keep a tight reign on defaulting debtors. Likewise, failing to obtemper the new rules could see court action being dismissed which will prove costly to creditors. Once rolled out in October, these changes will apply to both England and Wales, with thoughts that Scotland will surely not be too far behind. But will the new PAP indeed do what it’s setting out to do and reduce the number of claims coming before the court? Perhaps, however, given that there are plans to launch a new Online Court in 2020 which any claims under £25,000 (ultimately the vast majority) are not required to have gone through a PAP, then it may in fact have a short expiration date indeed. For more information or to view the new protocol in full, visit here
After thousands of small businesses were hit by recent government changes to business rates it looks as though they will be dealing with another setback – this time with the delayed arrival of the £300 million relief fund which was promised as a counterbalance to the financial tough times that some are now finding themselves in. Coming into effect 1 April 2017, the controversial business rates revaluation saw small business property rates increased reflective of their new property values recognised in the latest valuations. At the time the hike was disclosed, Mike Cherry, the National Chairman of the Federation of Small Businesses, said that the increase in business rates would “leave many UK entrepreneurs considering the future. Despite welcome interventions from the Government at the Budget, small firms in pockets throughout the country are still vulnerable to staggering increases”. The Government was subsequently put under pressure to provide support to reduce this potential economic impact despite their claims that three quarters of businesses would not be affected at all with rates either staying the same or falling. However, since the new rates went public, these heavy increases have threatened some small businesses dramatically with research from CVS (a UK business rent and rates reduction specialist) showing that the average rateable value of shops in England and Wales has increased by 8.5%. But this is just the tip of the iceberg, with businesses in other areas increasing by more than 100%, a rise simply indigestible for a lot of small to medium enterprises. The Government recognised in the recent Budget that this new rates system was unfairly hitting some, with a number facing astronomical increases and so pledged to deliver the £300 million relief fund in order to mitigate some of the negative impact that small business were feeling. However, its release is being caught up in bureaucracy and red tape, and despite the Department for Communities and Local Government having completed their implementation consultation, businesses are now waiting for the Government to publish their response which could take several months given the quick-fire election which is now absorbing much of the government and political agenda attention in the UK.
It’s hard for any business, regardless of the product, to compete with companies that come in and undercut current players with lower-priced alternatives. The price point that these aggressively marketed products and services can often come in at makes consumers and their competitors do a double take, as everyone wonders “how can they do it so cheap?”. And that’s precisely what is believed to be a main contributing factor in what has caused Toshiba, the 142 year old Japanese tech powerhouse, to be teetering on the edge of a fall from grace. Toshiba’s recently released financial report has cried out that there is “substantial doubt” about the company’s ability to continue manufacturing the electronics such as TVs, phones and computers that it has been in the business of doing so for so long. Over the first nine months of the fiscal year, Toshiba has reportedly lost US$4.8 billion ( £3.8 billion) and warns that the loss could easily hit the US$9.2 billion mark ( £ 7.4 billion) by the end of the year. Once a major player in the production of home electronics, over the years it has stopped producing the televisions and desktop computers that it was known for, now simply focusing its efforts on laptops, hard drives, telecommunication systems and other accessories. Unfortunately for Toshiba however, it has failed to produce over the last decade any one major market-enticing product that has seen it convincingly compete with other highly-competitive electronic producing companies. But it’s not only the cheaper competitor products and Toshiba’s inability to produce a flagship, best-seller that’s led them down this dire financial-situation garden path. Their US nuclear unit, Westinghouse Electric, recently filed for bankruptcy after the 2011 nuclear disaster in Fukushima. Although it seems that this was maybe too little too late as major dents have already been left in the wallet of the company, with billions of US dollars in overruns costing them dearly. Still, their attention now turns to efforts of selling a majority stake in the business in order to keep it afloat. After numerous delays before the actual release of their financial report, the report was finally released without the final tick of approval from Toshiba auditors and, without their acceptance, it could see Toshiba being dropped from the Tokyo Stock Exchange. Troubled times ahead for a company that was once a major player in the technology market.
Large firms will soon have to publish figures in order to make public the pay gaps that exist between male and females who are performing equal jobs. The new law will see large British companies (those with more than 250 employees) be required by law to publish four figures each year; the gender pay gap, gender bonus gap, how men and women rank in terms of pay within the organisation, and the proportion of men and women receiving bonuses.April 2018 is the deadline for companies to present these figures which aim to close the wage gap that exists between the two genders. These figures will be required to be made available on both the company’s own web site as well as a government site, with information not needing to be necessarily certified, as it can be provided by each company independently. A report from 2016 found that women earned, on average, 18% less than men. Minister for Women and Equalities, Justine Greening, said, "helping women to reach their full potential isn't only the right thing to do, it makes good economic sense and is good for British business.” Consulting firm McKinsey Global Institute has estimated that reducing the gender wage gap could result in an additional £150 billion being fed into the country’s annual gross domestic product by 2025. This announcement comes after Iceland’s push in March to make employers prove that equal pay for both men and women is offered across the board regardless of ethnicity, sexuality or nationality. This was stipulated for employers with more than 25 employees, which calls for companies to become certified in order to prove that there is no difference in pay amongst differing genders that are doing the same work.
On the 6th April 2017 sees the introduction of The Reporting on Payment Practices and Performance Regulations 2017, where by large companies and organisations (public or private, listed or not) must report every six months in terms of the payment practices (among other things). The must disclose the percentage of payments that were made under 30 days, between 30 and 60 days or over 60 days and the reporting must be filed on a government website within 30 days of the end of the six month period. However, despite the introduction of the new regulations in April 2017, organisations need only start reporting once the start of their financial year is after 6th April 2017. So if an organisation's financial year starts on 1st April, they will not have to make their first report until 30th October 2018. Further, the reporting only affects organisations that meet any two of the following three criteria that determines a large company (reviewed periodically): Turnover for the given period exceeds £36m, Staff numbers are greater than 250 and the balance sheet total exceeds £18m
Personal income. Time. credibility. The cost of debt for your small business can be big. Values as high as £11.6 billion a year have been estimated for the costs attributed to small businesses in England and Wales by survey findings from the Federation of Small Businesses. In a five year period, chasing unpaid debts is an action that 70% of small businesses have had experience with. And when it comes down to it, the personnel resources, time and the costs of chasing down monies owed can be a taxing activity. Small business operators, General Managers, Managing Directors and the like, may believe their time is well spent on making calls regarding outstanding payments. But general internal credit control, continually reminding customers about payments needing to be made and chasing invoices early isn’t always going to lead to healthy, ongoing cash flows. So at what point should a business, no matter how big or small, look to take a different approach to the matter and try something new? Weighing up the time you/your business is losing chasing distant customers is definitely a good place to start. How much time could be spent on developing relationships with customers that will “come through with the goods” as opposed to wasting time on those that should be left by the wayside so you can focus your endeavours on what lies ahead? There is no doubt about the cost of debt - especially when it comes to the timesheets and the payroll for a small business. The question is, how much is too much for the enterprise to absorb and when is it in your best interests to remove some of those pressures and free up your time? If you're wondering if you’ve reached that point, then get in contact with Chamberlain McBain - we know that each and every client is different and will consult with you to find a solution that works.
Calls have been made for the next bailiff reform after a recently released report authored by seven major UK debt charities describes how current laws are not adequately protecting those who are in vulnerable situations. This comes on the 3 year anniversary of the last reform which, in 2014, saw the government impose tough new restrictions on bailiffs that the then Justice Minister Helen Grant commented would ‘help to clean up the industry and ensure bailiffs play by the rules.” The 2014 changes focused on putting a stop to the aggressive nature of some bailiff collection techniques such as performing house visits after 9pm, taking household chattels such as white goods or entering homes when only children are present and rejecting sensible repayment arrangements. This new report instigated by debt charities such as Advice UK, Money Advice Trust, and Z2K, looks at evidence which has been gathered from their clients post the 2014 reform and provides multiple arguments and case studies as to why there is still work that needs to be done in the bailiff industry to make things “fairer”. The report writes that “people contacting debt advice charities still report widespread problems with bailiffs – now officially known as enforcement agents – and our evidence suggests that in the absence of an independent bailiff regulator, or a clear and accessible complaints mechanism, the new regulations are being contravened by many bailiffs in practice.” Chamberlain McBain supports the general recommendations of the report and specifically, attending the premises of the vulnerable or where children are present. Chamberlain McBain has always encouraged it’s clients to look seriously at any sensible repayment proposal and to use enforcement officers only as a last resort. Chamberlain McBain will refuse to use any enforcement agent where it is shown they have entered premises illegally, where only children are present or have dealt with vulnerable people is a less than appropriate way. The full report can be viewed here.
March 29 2017 is the date set for the UK’s formal declaration of the intention to leave the European Union, with the wheels being set in motion as British Prime Minister Theresa May triggers Article 50 of the Lisbon Treaty. It’s expected that the bill, which is being dubbed by many as “UK’s divorce bill”, will set the country back around £52 billion - a number Jean-Claude Juncker, president of the European Commission, says is “not a punishment”, but simply the cost attributed to settling Britain's outstanding liabilities. He goes on to say that the bill simply reflects “former commitments [made] by the British government and by the British parliament. There will be no sanctions, no punishment, nothing of that kind”. These commitments are centred around project costs that the UK had previously agreed to help fund, unpaid spending commitments, as well as EU official pensions, property and repayable loans. EU negotiations, Juncker confirms, will be done is a friendly and fair way, and he goes on to say “we are not in a hostile mood when it comes to Brexit because I do think, and I do want, and I do wish to have with Britain in the next decades a friendly relationship”. Reports claim however, that Britain will attempt to recoup some of these imposing costs by claiming a significant share of the £127.5bn worth of European Union financial assets, despite May having received advice from Government lawyers dictating how Britain could legally leave without paying. A draft copy of the EU’s negotiating strategy which has been recently leaked by the Dutch newspaper De Volkskrant, quotes an official as saying that if Britain did refuse to pay, that the EU would take the matter to the International Court of Justice in The Hague. Once Article 50 has been triggered on March 29, the next key date is April 29, which sees all 27 EU leaders gather to discuss further Brexit plans.
With Ms Sturgeon’s calls for Scots to cast another vote on the question of yes or no to becoming an independent Scotland, claims are flying left, right and centre over the facts that Nicola Sturgeon may be guiding Scotland "over a cliff like lemmings to economic ruin" - a brazen vocal point made recently by Richard Drax, Member for South Dorset. The comment is representative of the arguments for and against Indyref2 that are running thick and fast. At the centre of the debate is the effects that the vote for independence from Britain is bound to have on the export and trade industry, stinging it hard. The value of the UK market to Scotland when compared to that of the EU can’t be denied; recent statistics published by the Scottish Government showed a drastic difference in the 2015 value of sales to Britain, worth almost £50 billion, compared to the EU, sitting at a much less lucrative £12.3 billion. Keith Brown, Scotland's Economy Minister, commented “that since the vote to leave the European Union, [Scotland] must continue to be seen to be a country that is outward facing and open for business. The EU market is eight times the size of the UK market, which highlights the importance of remaining in the single market. I want to be clear that Scotland should not face a choice between exporting to the EU or UK. We can do both.” Additional anti-independence campaigning is centred around the heart of the Scottish economy – the oil industry, which has the North Sea contributing £10 billion to the Scottish economy. The key to this point is the fact that, as oil reserves putter out, high costs and hefty bills loom on the horizon associated with the decommissioning of equipment no longer needed for operations. These bills, spread across oil companies and taxpayers, will be a whole lot harder to swallow when the population of paying taxpayers helping to foot this bill is drastically reduced from the whole of the UK to just the Scottish taxpayers. Furthermore, with some major financial institutions already signalling that they would likely move headquarters and jobs out of the UK and into mainland Europe as Brexit changes are rolled out, they’re also thought unlikely to remain in Scotland even if the country is to leave the UK and rejoin the EU. However, in a recent speech Sturgeon argued that Scotland would become a magnet and hot spot for talent and investment across the UK if it stayed in the EU single market. Then there is the currency debate. In the 2014 referendum the “yes” campaign promised that both the pound would be retained as the Scottish currency and the country would still be part of the EU, however, now the question must be asked and answered as to how quickly an independent Scotland would be able to re-enter the EU. It is not 100% that Scotland would keep the pound if it claimed independence from the UK and, as it has to reapply for EU membership it’s not guaranteed to be able to take the euro that easily either. Could the need for a new currency be looming on the horizon? Some experts have rejected all these economic cases opposing the Scottish independence, arguing that the information pertaining to areas against the vote has either been broadly estimated or are based on insufficient evidence. London Professor and Tax Expert Richard Murphy points out that there is bound to be a change in the economic environment of the country as the “government of an independent Scotland will have a very different structure to that imposed now”, so therefore how could the final outcome be forecast as the economic environment of a new Scotland would ultimately be moulded and governed differently. With a whole lot of things not for sure, one thing definitely is and that is to watch this economic space of Scotland as irrespective of the Indyref2 vote, things are changing.
Theresa May says “now is not the time”, but Nicola Sturgeon is all for it. Announcing plans to seek another Scottish independence referendum in either 2018 or 2019 is something which Sturgeon has made clear was on the cards since the results were known from the 2016 Brexit vote. Which isn’t unexpected really, with 62% of Scottish voters expressing they wanted to stay in the EU and only 38% voted to leave. It’s no wonder then that Sturgeon is calling for the referendum, saying she is representing the majority of Scottish people. The previous Scottish independence referendum was held in 2014, and it saw Scotland vote against the independent move away from Britain; 55% to 45%. However May is calling for Sturgeon to hold fire until the end of the current Brexit negotiations before asking Scotland to make a decision on the independence movement, so they have all the information at hand on how Brexit is playing out. Furthermore, Sturgeon can’t just call for the vote and make it happen, as there is the need to get Westminster’s okay. With May claiming that there would be no chance of a vote before at least 2021, people must vote once Brexit has been and gone, waiting until long after the UK has left the EU. There are some big arguments circulating around for and against the vote, but economically speaking, what would Scotland's potential independence mean for the country? How would the country fare up out on it’s own and what impacts on the currency, trade, and services industries could be expected? Read more on this in tomorrow's blog “The Economic Impacts of an Independent Scotland”.
Student loan. Car loan. Credit card overdraft. Buying your first home. There will undoubtedly be a time in most people’s lives where debt looms on the horizon. Not all debt is the same though, and some of these situations shouldn’t automatically come with the negative connotations attached to a word that so often makes us flinch. Good debt could be a low interest loan, or taking out a mortgage to buy a home; something which puts you in a better position long term than where you started in the beginning. A student loan for example, could provide you with the leg up needed in your industry, giving you the ability to secure a more lucrative job down the track because of your higher qualifications and skill level. Of course you can’t always know how things will turn out and to make a “good debt” decision isn’t a 100% guarantee to always stay that way. A loan to get your tech startup business off the ground may not actually help you get it off the ground at all, instead sending you down a different path altogether. Or maybe that house you were so sure was in an up and coming neighbourhood could see its value plummet dramatically when the housing market takes an unexpected dive. It doesn’t have to always be doom and gloom however when it comes to personal debt. The important factor to remember is that layering debt upon debt is not the answer and will never be a good way to approach the situation. Consider what is necessary and whether or not the step into debt will more than likely benefit you long term. Always have a contingency plan, as life can take unexpected turns at any point and you need to ensure you’ve always got a get out of jail free card handy in your back pocket.
Chamberlain McBain are proud to be the principal sponsors of the School Mock Court Case Project. As part of that role, we organise the finals for the Juniors section on 27th February 2017 which will be held at Central Hall in Edinburgh. Presiding this year will be Judge Forrester, The Rt Hon Sir David Edward and The Rt Hon Lord Armstrong. Judge Forrester sits in the General Court of the European Union in Luxenburg and will be flying over on the morning of the Trials. The Rt Hon Lord Armstrong sits in the Court of Session. We are expecting an audience of some 700 and clients of Chamberlain McBain are warmly invited to attend - just speak to your usual contact for further information. UPDATE: Congratulations to Leith Primary School in Edinburgh who won the Mooting Cup following tough competition with five other teams
We would like to wish all our clients a safe and merry Christmas and we look forward to working with you during the coming year. We will be closing our offices early on 23rd December and 30th December 2016. Our offices will be closed on 26th & 27th December 2016 as well as 2nd & 3rd January 2017, but we will be open in between Christmas and New Year.
The Accountant in Bankruptcy (AiB) has launched a consultation as part of its review of the Bankruptcy and Diligence etc. (Scotland) Act 2007 ("the 2007 Act"). This review will assess, wherever possible, the impact of the diligence measures introduced by the 2007 Act, including those provisions which are not yet in force. You review the consultation paper here. Responses need to be sent in by 30 November 2016
The new Simplified Procedure takes effect in Scotland as from 28th November 2016, replacing the current small claim and summary cause actions. The new portal that would allow claimants to lodge claims online has been delayed until "early 2017". No actual date has been given as of yet. The new case management system instructed to the Scottish Courts recently have seen staff encountering problems that are resulting in delays. Although the next rise in warrant dues (court fees to issue proceedings) was not scheduled to take place until April 2017, the Scottish Government have increased some fees with effect 28th November. All debt actions under £5,000 will see the fee increase from £78 to £100. Recoverable costs for defended actions less than £5,000 are also set to increase and the increase could be substantial, especially for party litigants. For debt actions raised in the Sheriff Court where the principal sum is greater than £5,000, the fee increases from £96 to £120. Needless to say, the courts are seeing a rush of new actions being raised in order to avoid the increase.
Chamberlain McBain continue its work with the School Mock Court Case Project SCIO. The Awards Ceremony for the Seniors section was held in the Signet Library on 3rd November, kindly sponsored by the WS Society, with our Mr Murphy being the Master of Ceremonies. The Eve Crowe Mooting Cup was presented by Lady Dorrian, the Lord Justice Clerk, to the overall winners, Kirkcaldy High School. Joint runners up were Dunbar Grammar and George Watsons College. We would like to thank the pupils from many of the schools who performed to the audience and our very own Miss Sarah Lamb who sang. It was announced during the evening that owing to the success of this project a Seniors project will open to the schools in the West of Scotland as soon as the next academic year.
Bills of sale are a way in which individuals can use goods they already own as security for a loan. They are governed by two Victorian statutes, dating from 1878 and 1882. In September 2014, HM Treasury asked the Law Commission to review the Bills of Sale Acts. Our 2016 report recommends that the Bills of Sale Acts should be repealed and replaced with modern legislation that imposes fewer burdens on lenders and provides more protection for borrowers. A copy of the report can be found here.
Following on from the success of the meeting in May the East of Scotland Branch of the Chartered Institute Credit Management, together with Chamberlain McBain, are organising a visit to Edinburgh Zoo ... to see the Pandas and to hear from three experts in various fields of business. Come and hear from three speakers (Laura Irvine, BTO Solicitors LLP TOPIC: Data Protection - Joanna Cashmore, Bibby Factors Scotland TOPIC: Alternative Funding ... Factoring - Mike Butchart Qdos/Powered by Integra TOPIC: Insurance / Accountancy) Delegates are asked to arrive for 4.45pm for a 5pm sharp start. The event will conclude around at 7pm. A light bite and drink will be provided. This event has been oversubscribed - sorry no more registrations can be accepted.
Chamberlain McBain remain the principal sponsors of this educational initiative. Now spanning four projects - Juniors - West of Scotland, Lothians and Tayside & Fife - Seniors Central Scotland, the project attracts some 2,000 students from some 45 schools. Both the Lothians and Seniors project get underway this month, with the West of Scotland starting in September and Tayside in October. Finals on 27th February 2017. For more details see here
Lord Justice Briggs report is now available which looks at the review in terms of procedure in the civil courts. Details can be found at www.judiciary.gov.uk
The Scottish government has issued a consultation paper in which possible increases of 24 per cent are being discussed in an effort to recover the cost to the public of providing the services of the courts. The consultation sets out proposals for fees in the Court of Session, the High Court of the Justiciary, the Sheriff Appeal Court, the Sheriff Court, the Sheriff Personal Injury Court, and the Justice of the Peace Court. It has been said that court fees are a major source of income for the Scottish Courts and Tribunals Service and it is now apparently necessary to increase fees in order to achieve full cost recovery. The consultation seeks views on two options each of which is aimed at providing full cost recovery. The first is a flat rise – increasing all fees by 24 per cent. The second is targeted increases – increasing fees for only some actions while leaving others untouched. Following the introduction of this consultation the Dean of the Faculty of Advocates, Gordon Jackson QC, has sparked a note of concern about access to justice in light of proposed increases in civil court fees. Mr Jackson said: “The Faculty will consider the paper and respond in detail in due course. My immediate concern would be maintaining access to justice and I would be anxious to ensure that no change would adversely affect that. The Scottish government said the aim of increasing civil court fees was to raise around £5m-£6m per annum which "should ensure full cost recovery." In addition, a new simple procedure is to replace summary cause and small claims procedures and the consultation sets out the proposed fees for this new procedure.
Since the 6th of April 2016 all applications for charging orders or attachment orders must be made to the County Court Money Claims Centre. The Claimant must serve the interim Charging Order within 21 days of the date of the interim order. This is an important change to the previous procedure. Under the old rules claimants were required to serve the interim charging order within 21 days of the hearing. These rules presume the interim order will be made to claimants promptly, something which we will need to wait and see in practice. The idea is that most applications for a Charging Order (where the Defendant does not object) will remain at the County Court Money Claims Centre where the final order will be made without a hearing. If the Debtor does object to the matter it will be transferred to the Debtor’s home court.