Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Monday, October 27, 2008

Don't Quit ...

Something to perhaps help motivate those running businesses that are beginning to find life a little more challenging!!

Don't Quit

When things go wrong, as they sometimes will,
When the road you're trudging seems all uphill,
When funds are low and the debts are high,
And you want to smile but you have to sigh,
When care is pressing you down a bit,
Rest if you must, but don't you quit.

Life is queer with its twists and turns,
As every one of us sometimes learns,
And many a failure turns about,
When he might have won if he'd stuck it out.
Don't give up, though the pace seems slow -
You may succeed with another blow.

Often the goal is nearer than
It seems to a faint and faltering man;
Often the struggler has given up
When he might have captured the victor's cup,
And he learned too late, when the night slipped down,
How close he was to the golden crown.

Success is failure turned inside out -
The silver tint of the clouds of doubt,
And you never can tell how close you are -
It may be near when it seems afar;
So stick to the fight when you're hardest hit -
It's when things seem worst that you mustn't quit.

Author Unknown


However ...if you need some constructive help, with no obligation, a call to Insight Associates on 0800 180 4265 may be more helpful!!

Monday, October 20, 2008

Fiddling whilst Rome burns?

Well apparently it's nearly official - we are in recession! According to a report from Ernst & Young's ITEM Club today, which forecasts the UK economy will not bottom out before the second half of next year and expects only a weak recovery in 2010.

It predicts that UK GDP is likely to drop by 1% next year – the first year of negative growth since 1992 and growth is forecast at only 1% in 2010. They warn that the supply of credit is likely to remain restricted and corporate profitability will suffer, with the consequential impact on investment and employment.

This is serious stuff for the UK's smaller businesses, and the time to act is now!

What is quite staggering is the initial political response. Mr Cameron seems to think reducing Employers National Insurance Contributions by 1% for six months is part of the solution - saving employers with four or less staff a whole £600 - WOW! That will really help I don't think! And not wishing to be politically bias, our incumbent Government believes not introducing further flexible working requirements will help too ....really!!??

What smaller businesses will need is some real help, not this petty fiddling around the edges. They need help to ensure their cash flows are not shot to pieces by draconian actions by the banks, or customers dragging out payments. A good start might be extending the Small Firms Loan Guarantee Scheme to cover existing lending so that businesses can support the funding they need when their own security is weak?

Businesses do not need hand outs, what they need is the reassurance that they can operate profitably in this climate, and the help and support with the funding they need to do that. I don't think £600 will go very far!

This is really going to impact everybody, so review where you are at now! A good start may be our new "Nine Lives" guide from our friend "Kitty" who helps promote our Outsourced Finance Department.


While you're running your business in a recession, who's watching your kitty?



Monday, October 13, 2008

Will things change?

In the past week I have heard directly two stories of where bank lending has been withdrawn at very short notice just as happened in the early nineties. Fortunately neither of these were Insight Associates clients, although we have had this happen to one situation we have been working on - but that was to be honest not a huge surprise. There can be no doubt that banks are getting tougher and money is harder to find.

Then as if to confirm it, last Wednesday I heard a senior manager with HSBC's Special Situations Group (where their problem customers end up) tell a meeting of the Turnaround Management Association ("TMA" - of which I am a director in the UK) that their referral rate had trebled in the last three months, and they were expecting much more to come.

I have been saying recently that businesses should make their bank manager their best friend! This may seem odd, but if you want to avoid getting on your banks target list surely a good start is to get close to your manager and make sure he/she has everything they need. Are you up to date with providing information and are you complying with all of the conditions and covenants in your bank lending. If you can make your manager comfortable about your business, then there is much less chance that they will focus on you.

But ..the title above is "will things change". Today (13 October) has been an historic and momentous one for the British economy. In effect two of our biggest banks have been part nationalised to save them from their past misdemeanours if you like. However part of the deal is ... to quote Robert Peston from the BBC:

"RBS and Lloyds TSB/HBOS have promised to the government that they'll maintain mortgage lending and small-business lending at 2007 levels - which is massively more than they are currently lending (this is hugely significant - given that a shortage of credit is to a large extent behind the economy's deceleration into recession levels)."

Mr Peston went on to say this evening that this cannot mean a return to the reckless personal mortgage lending that we have seen in recent times, but it should be good news for smaller businesses concerned about their credit lines.

Let's hope so, as more than anything a return to the situation of the early nineties where bank lending was withdrawn from so many business causing them to fail will make the recent events just the beginnings of our troubles.

My concern is, it is all well and good the banks making this promise (they, it appears, had little choice if they wanted the Government to bail them out - and it is a perfectly sensible condition to make on the deal) but how and who is going to police it?

These are difficult and interesting times and more than ever you need to ensure your business is in good order. We are happy to meet and review your position free of charge and with no obligation. Get in touch.

Tuesday, October 07, 2008

How the stockmarket works ... a little light humour!

A little light humour from my old friend and associate Steve Shepherd ....

Once upon a time in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort. The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one. The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf. While the man was away the assistant told the villagers, "Look at all these monkeys in the big cage that the man has bought. I will sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up all their savings and bought all the monkeys. They never saw the man nor his assistant again and once again there were monkeys everywhere.

Now you have a better understanding of how the stock market works!

Saturday, October 04, 2008

Banks putting on the squeeze ...

Keith Steven, Managing Director at our good friends KSA Company Rescue has highlighted on his Blog an article in the Telegraph Online on Thursday about the banks lending policies.

In a survey produced, significantly, before the events of the last couple of weeks the UK banks stated that they would aim to reduce the amount of credit they would offer businesses and consumers. Reporting that losses and defaults were already on the rise, they indicated that lending criteria would be tightened and they would look to improve their margins through higher charges. This predates the recent turmoils, so undoubtedly it will be even more the case than it might have been.

This certainly confirms our recent experiences, where propositions that would have been relatively easily fundable a year or so ago are now proving to be very difficult indeed to get any interest in. We have also seen changing attitudes with credit insurers, which will not help matters either. It therefore is critical that you keep close to our bank contacts and manage carefully any existing facilities so that it is not at risk at renewal time, or even before. The common reaction is to fear the bank, and whilst there may be reasons to do this, most often not keeping your bank in the picture only gives them good reason to be concerned and pull their facilities.

Keith points to the need to ensure you are in control of your business, and he is absolutely right. Now more than ever it is critical that your business has good quality up to date financial information (like timely monthly management accounts that allow you to make good quality decisions about your business), and that the focus is on cash management and preservation. Given this it continues to stagger me how little attention this is given by directors, who are often far too complacent about the information they receive - if any at all!!

We at Insight Associates are expecting to get increasingly busy over the coming months as businesses wake up to the fact that their financial management and control is weak and they need to do something about it - and fast! Now more than ever services such as our Outsourced Finance Department are an essential ingredient in running a strong business that can weather the coming storm. It is going to get tough undoubtedly, and only the strong and prepared will survive.

If you want to look at the full Telegraph item you can find it at http://www.telegraph.co.uk/finance/economics/3125502/Banks-plans-for-lending-cutback-will-tighten-the-screw-on-businesses.html

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