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Wednesday, December 31, 2008
It is very easy in these extremely troubled times to write reams on this blog about all the doom and gloom and the countless issues that businesses are going to face in 2009, and there will be many … the biggest of which is probably just pure survival! However, as the New Year approaches lets just stop for a moment and consider what is needed for an optimistic outlook.
Optimism is a state of mind. You decide if you want to feel optimistic no-one else does it for you. So, if you decide to be optimistic it is likely to make you more cheerful, less stressed, and healthier for starters! Also, and most importantly you will be undoubtedly then be better equipped to deal with the turmoil that is coming your way in 2009. It is going to be very difficult make no bones about it.
I am not for one minute suggesting that you should not be realistic about the outlook, far from it. You need to act according to the conditions that we all now find ourselves in. However, doing it through optimistic eyes may just make all the difference.
Look for opportunities and new ways of doing things, for the positives that are there to be had. Many people and businesses prosper in difficult times …make your mind up to be one of them! Blow the dust off the old business plan and make it a new years resolution to rethink you business objectives both short and long term given the current market conditions. Have a brain-storming session with your team and work out what you are going to do differently in 2009 that will ensure you survive. Maybe even look at having a JUST ONE DAY session with us at Insight Associates!
Do however also leave some time for reviewing how you can make your business more robust and able to weather the storm you would be foolish not to, but look at all angles not just the retrenchment ones.
Optimists see setbacks as temporary, minor blips on their path to success. They focus on all the good things, the positive things, their successes and not on the negatives. Failures are isolated occurrences and opportunities to learn from in order to move forward. Optimists believe success is permanent and universal in that it filters through everything and brings more success with it.
A few months back I read a book called “Man’s Search for Meaning” by Viktor Frankl, it left a profound and lasting impact on me. The book describes Dr Frankl’s experience as an inmate in Auschwitz and the unimaginable things that he lived through. Alone it makes you very grateful for everything we have. However, what was so inspiring is his tactic for survival which was based on the premise that no matter what was physically done to him and the conditions he endured no-one could take away his freedom to decide how he responded to that. This one liberty could not be stripped from him, or any human, for at the end of the day however difficult it is you decide how you respond to the factors that are around you.
So … resolve for 2009 to be positive and optimistic and face the adversities that the business environment will throw at you - remembering you decide how you will respond!
A very Happy New Year to you.
Saturday, December 20, 2008
"You may trust a person's honesty - but can you trust that person's intelligence? This may have some relevance to the current credit crunch or banking crisis. We can pick out at least five factors contributing to the problem and reflecting habits of thinking.
- If everyone else is doing it - it must be alright. Who wants to be left out?
- If you spread the risk among a large number of people that reduces the risk. Probably true but not if all the people fall into the same bracket (sub-prime borrowers). That is no longer a diversified risk.
- A mortgage is usually a very safe loan because there is the real value of the house that is being mortgaged. But if the mortgage is securitised and fractionated, no one knows who owns which assets.
- Once a market starts to decline in value there is an incentive to drive it further down in order to buy at a lower level in a market that is sure to recover one day.
- Bonuses and incentives for short term performance tend to ignore long term risky behaviour.
It is certainly true now that anything that used to be considered certain should now be viewed with scepticism at best!
Thursday, December 18, 2008
That HM Revenue and Customs now have a Business Payment Support Service?
This could really help your business …
In the Pre Budget Report delivered by the Chancellor Alistair Darling on 24th November 2008, he said “at this time of real difficulty for many small businesses, they need ‘time to pay’ when meeting their tax bills. I intend to meet this need. From today HMRC will enable firms facing difficulties to spread their tax on a timetable they can afford. This will cover not just VAT, as some have suggested, but all business taxes. VAT, corporation tax, income tax and national insurance. And not for six months but for as long as they need.”
What does this mean?
That you now have a real alternative to getting into difficulty paying any of your businesses tax bills over the coming months. If you are going to struggle with your cash flow and have some payments to make to HMRC then make use of this service – now.
They will not make any surcharges for late payment as they would normally do, but there will be an interest charge.
The Business Payment Support Service however only applies to amounts that are about to become due, or are just overdue. They cannot deal with outstanding overdue payments where HMRC have already contacted you about payment.
More details are available at: http://www.hmrc.gov.uk/pbr2008/business-payment.htm
What do I do?
Call 0845 302 1435 and talk about your circumstances to one of the advisors. They promise to give you a decision in about 10 minutes for straight forward cases.
What do I need?
You do need to do a little homework first. They will need your tax reference number, details of the amounts that you will have trouble paying and in their words “basic details of your businesses income and outgoings”. This really means you need to have done at least a basic cash flow forecast.
Before you call, spend a bit of time forecasting your cash flow out as far as you need to, so you can see with a good margin how quickly you will be able to repay the amounts due. There is no point in agreeing a deal that you cannot achieve, so spend some time beforehand getting to grips with where you are.
We can help!
We have already had experience of dealing with this service on behalf of clients, although it is very early days yet. HMRC have directly admitted to us that apparently the staff handling the calls are newly recruited and inexperienced. However, they do have a mandate to resolve all calls within 4 days, although their aim is to deal with them when you call and put in place a ‘time to pay’ deal. It is critical that you are prepared before you call as this will give you the best chance of getting a deal that works for you.
Get in touch with us now to help you through this!
If you don’t use our help, but do use the HMRC Service we would really like to know how you get on!
Please e-mail your experiences to me on firstname.lastname@example.org.
Thursday, December 04, 2008
Businesses now more than ever before need to understand their Balance Sheets and their Working Capital. At the end of the day a Profit and Loss Account is just a load of sums, and it can be manipulated to give a number of different answers. But cash is real and it is really what could kill you if you don’t understand it and manage it. To do that you need to absolutely understand your Balance Sheet and make it work for you.
If you don’t understand your Balance Sheet, then you are in good company. Most business leaders don’t. That ignorance is no longer an option, get to grips with it and make it work for you. Hidden in there is the key to unlock your cash flow.
Yes, of course you still need to protect and build your sales, manage your margins and control your costs. But the first thing you should consider is the cash impact in doing that, and actually in everything you do.
So, stop focusing on the sums, focus on the reality. The real cash in you bank account!