Pre Packs or Stitch Ups?

Are pre pack administrations a fair way to rescue failed businesses? As the economy continues to slip and slide more businesses are likely to fail in the coming months and years. The concept of a pre pack administration is to complete a complex financial restructuring with minimal adverse effect. Without doubt speed is important in dealing with any insolvent position in order to protect as much as possible but have we gone too far down this road with loopholes being exploited by unscrupulous individuals?

Where a protracted public sales process could damage the business, its reputation and consumer confidence then there has to be an argument for the pre pack as negative publicity can lead to a cash hemorrhage and significant job losses. But how common is this and does this concept still hold water with smaller or niche companies?

The law - whilst now strengthened with the introduction of SIP 16 for insolvency practitioners - is still open to abuse and has too many loopholes. Perhaps we should be asking why a business may not survive and once we understand this then the issue of a pre pack becomes much clearer. There are two key elements to survival - cash and good management. If a company has enough cash then a pre pack is unnecessary and if the management fails then it must be wrong to organise a pre pack with the same managers still in place!

Too often the losers in a pre pack are the small creditors who are forced into acceptance of a poor deal by bigger players and the fear of losing everything. Where the new owner is the original one there must be some mechanism whereby future profits are subject to a "pre pack" tax over and above normal taxation and which gets distributed to those who lose out under the original agreement. Otherwise everyone may as well dump their debt burden and undergo a pre pack.

I still believe in integrity, honesty and fairness in business dealings and pre packs fail to pass these tests in too many cases.

It's time to get in line for an award from the Queen.

Whilst time is tight to get your nominations in I would urge everyone to look at the Queen's Awards. These really are the equivalent of an Oscar in our industry and recognise those companies and individuals who have had a major impact.

What I like about these awards are that you have to prove what you have done as a company or individual which goes beyond the day to day expectations. Introduced in 2004 these annual awards close for nominations on 31 October and so you do not have much time to get those entries in.

All too often we fail to celebrate individuals and companies who have made a real difference and so spread the word and if it is too late for this year make sure that you put a note in the diary for next year!

Just follow the link to www.queensawards.org.uk to learn more. There seems to be a real lack of representation from the East of England in this years awards so let us try and rectify that for next year. We have a lot to be proud of.

Confused, patronised and angry!

Do people in social enterprises actually know that they are running a social enterprise? I ask this question because recently I have read many articles where the writers tie themselves in knots trying to pen a definition.

Too many people have their own vision, which it would seem has to mirror their own organisation, and then seek to dismiss any other business which could quite legitimately call themselves a social enterprise. Some recent examples range from the "Red Tory" Philip Blond struggling on Newsnight to Liam Byrne who seems to suggest that the Labour party reinvents itself as a social enterprise.

How hard is it to create a definition which everyone can understand? Looking at the essential components:

- First and foremost it is an enterprise and therefore needs to be a legal body. If not it is a voluntary or community organisation which is related to but not necessarily the same thing as a social enterprise.

- It needs to trade in the widest sense of the word.

- Profits do not go to shareholders, partners or investors but back into the business for the benefit of the wider community.

Beyond this everything is negotiable in my view. Social enterprise is not the answer to all of our problems and has no monopoly on great thoughts and ideas. However what it does have as a massive "USP" is an ethos which understands that profit at any cost is not always desirable.

I feel fed up with the rather patronising and incredulous reactions from people when you explain that money and profit is not the sole way you measure success. However I place much of the blame for this attitude firmly in the lap of the sector itself. We are fractured, not sure of ourselves, shun success and perpetuate the myths surrounding the industry.

A good example of this is the recent SEEE (Social Enterprise East of England) "inTouch" magazine. Rarely have I felt such despair after reading something designed to help and showcase the industry. Patronising articles on Twitter, business cards and a "problem page" made me angry and realise that well meaning though the people may be that they have no idea of what is happening in the real world. It assumes that its constituents are grant hungry micro businesses with no skills and experience. Well that is not the case at NWES!

If you have not got the skills to run your own business then do not set up a social enterprise - go and work for someone who has or learn them before joining our throng. The overwhelming majority of people in our sector are well meaning but until they (and funders) realise that, by being good at business you will achieve your aims much quicker, we are destined to be peripheral and seen as laudable but insignificant.

I want to be a part of an industry making a real difference. It will have companies of all shapes and sizes which are well run and have a financial vision to match its social vision. At NWES we believe in sharing our expertise far and wide and have helped numerous individuals and organisations in this country and abroad - all for free. Despite this locally we are viewed with suspicion by some because we "are too big to be a social enterprise", "make a surplus on trading", "do not have grant income" - all of these are direct quotes.

What I do applaud is the initiative being run in conjunction with RBS which is the SE100. It is looking for those social enterprises that make and measure social impact, are growing and making a real difference. Have a look at www.se100.co.uk and see what a social enterprise really looks like!

We need more of ideas like this which showcase the best and encourage the rest if we are ever going to make social enterprise clearly understood by all. I am proud to be a "social entrepreneur" but would like to see many more of us around!

So was the NFEA conference worth it?

Without doubt! As always we were treated to an excellent conference, well organised, a good variety of speakers and relevant to the times. It was clear that there were fewer members than last year but those that did attend got more from the time invested, were from the leading agencies in the country and are those likely to survive the turbulent times ahead.

So what stood out? The theme of social ethos and commercial focus was a thread linking all of the elements and was best exemplified by Josephine Fairley founder of Green and Blacks. She was always going to get a great response by giving a bar of chocolate to every delegate beforehand! If anyone wants to know what happened to any uneaten bars ask Emma Chapman! Jo had a great story to tell from the germ of an idea to an exit strategy and the "adoption" of her business by Cadbury. The commercial reality was never far from the surface but this is a business with a social ethos underpinning everything that they did from sourcing to wrapping.

Whilst as always at NWES we are politically neutral the contrast between the two MP speakers at the conference was so marked as to be embarrassing. On day one we heard from Lorely Burt the Liberal spokesman and the general consensus was that she was somewhat out of her comfort zone, had only a fleeting knowledge of her brief, rambled on about a range of unrelated subjects and left everyone no clearer about her party policy on small business. When the party has a respected "hard hitter" such as Vince Cable it is all the more surprising that a "lightweight" was paraded before us. If you are going to speak at an event take the time to understand the audience, be focused and tell the listening delegates something new. I hope that Lorely matures into her brief because as one delegate said to me straight afterwards "god help us all if she ever wields any power"!

On day two we had Mark Prisk the Conservative Shadow. I am not exaggerating when I say that here was the best conference speech that we have ever had from a politician - certainly in my 12 years. Mark is obviously very at home with his portfolio, had taken the time to research the listening audience and gave us all something new. Not everything will have gone down well but we heard an honest appraisal of what can and cannot be done, how it will influence enterprise agencies and what we can expect from an incoming Conservative government. Irrespective of political leanings the audience seemed all in agreement that here was someone that we can do business with.

For the first time in many years I had no responsibility to worry about and it was somewhat liberating which made this one of the most enjoyable conferences ever. The team who attended with me all came back with several actions to put into place and a much better understanding of the industry and where NWES is placed (at the top obviously!). On this showing the NFEA conference has a lot more life in it yet and the non attendees are in danger of falling even further behind the pack. Book now for next year!

In a climate of cutbacks is the conference the first to go?

As we draw towards considering diary commitments for the autumn the mind is inevitably drawn towards the conference season. Over the years I have had the pleasure and misfortune to attend a wide variety of conferences covering many sectors. Sometimes as a speaker, others as a delegate I always make it a rule to look back and consider what it was that I gained from attending.



When I first started attending conferences I came back disappointed almost every time. I felt that my time could be better spent in the office and that I learned very little from my time away. After a few such episodes I looked at the common denominator linking all these conferences and it was me! Like much else in life you get out what you put in and I was a passive attendee despite always paying my own way.



To change this I knew that I had to play an active part in any conference which I was going to attend. Prior to setting off I have an indication of who it is that I wish to meet, what questions I am seeking answers to, what areas I need to be updated on and what it is that will make a difference to the business when I return.



As such I only attend those conferences which pass the tests above and always come back invigorated, with ideas to implement and new contacts made. How many people prepare themselves for conference attendance? Very few in my opinion. Too often I see delegates gravitate to those people that they know, never widen their circle of acquaintances and use the conference as a whinge session! Why?



Each year NWES takes a small contingent to the NFEA conference. We use this event as a valuable networking opportunity, chance to learn some tricks from other similar companies and gather ideas which may benefit us. I usually take a cross section of my staff to help them gain a wider appreciation of the industry and see how we compare to our peer group.



In the last week I have spoken to a couple of "wise men" in the industry who are probably not attending the NFEA conference this year. They have good reasons (excuses?) for being elsewhere but I would suggest that now more than ever attendance is vital for any agency that is serious about its future. Times ahead could, and probably will, be very hard and it is through continual learning and sharing of experiences that you stand a better chance of surviving intact.



For members of the NFEA the conference is astounding value and should be pencilled in as a must attend event. With 100+ members I would suggest that taking 2/3 people from each agency will be an investment that will pay dividends in the future. However to get that benefit consider the points above and make sure that you speak to as many new faces as familiar ones, that you get answers - or at least suggestions - to your questions and learn something that you will put into place when you return to the coal face. It could be the best money that you spend all year!



For members and non members alike see http://www.nfea.com/ for details of an industry specific conference which could help you.

Short term mentality - long term suffering.

This week we will learn how much profit (or loss) that our Banks will post. To the fore comes comment on bonuses paid to those traders "gambling" in a high risk - high reward environment. Howls of outrage are usually met with protests that it is too difficult to change the culture, that it will lead to an exodus of talent etc.

We have two issues here 1. Should Banks be allowed to gamble on the markets this way and 2. How should traders be rewarded.

On the first point then the answer should be yes however there has to be strict limits placed on the trading related to the strength of the Bank balance sheet and ability to meet obligations should losses be made. It was unlimited gambling on ever more obscure derivatives which caused the downfall of many institutions and yet we seem prepared to let the same mistakes be made. The argument that a bank is too large to be allowed to fail simply means that it is too large.

Reward for traders has a simple solution and yet no-one wants to break ranks. Traders can be paid bonuses according to how successful they are but the bonuses should be in shares and must be held for at least 5 years before they can be traded. In addition if losses are made then entitlement to shares reduces proportionally. This way there is an incentive to look at the long term rather than short term and each trader is tied to the performance of their parent company.

The bleats that this may affect the city in a negative way and drive away "talent" are foundless. Do we really want financial mercenaries gambling with our future? If they have no moral guidelines or sense of responsibility then quite frankly we are better off without them.

We talk about corporate responsibility and it is a real interest of mine but I have doubts if any of our top 250 companies pay anything other than lip service to this.

Reward exceptional work but tie it in to overall company performance and make any incentives long term - do this and we may just have a better society and stronger companies as a result!

So does an Enterprise Agency really make a difference?

When hosting the judges for the Enterprising Britain Awards we were asked a similar question which encouraged me to do some investigation. NWES was set up to combat the mass redundancies due to the closure of the Pye TV factory in Lowestoft back in 1982. Its successor Sanyo recently closed so where does Lowestoft stand now compared to then?

Looking at the figures for the last few years one can see how the town has performed in comparison to the region and country.

Economically Active – in employment – all people:

Date Number Waveney East England Great Britain

Mar 06 47400 70.6% 77.7% 74.3%

Sep 08 54000 78.3% 77.6% 74.5%

As you can see Waveney has substantially outperformed both the East of England and Great Britain rising from a laggard to being above the national average for economically active people in employment.

Economically Active – Unemployed – all people

Date Number Waveney East England Great Britain

Jan 06 3800 7.3% 4.6% 5.4%

Sep 08 2900 5.1% 4.3% 5.3%

Source: www.nomisweb.co.uk


There is a similar story with the latest unemployed figures; whilst there will always be seasonal fluctuations due to the nature of the area it can be seen that substantial progress has been made, bringing Waveney to below the national average from a position 35% above it some 33 months before.

The most recent figures for those people on Job Seekers Allowance, whilst showing an increase, demonstrate that our policy of job diversification is sheltering Lowestoft from the worst effects of the recession. In the period from January 2008 to May 2009 (latest figures available) Lowestoft has seen a 41% increase in JSA claimants. However in the same period the East of England has seen a 106% rise and Great Britain an 86% rise.

These are impressive results and whilst full employment is always the goal it shows how a policy of diversification and broadening the business base has paid substantial dividends over the years.

Lowestoft with NWES at the helm is now looking to the future positioning itself as the UK base for the rapidly emerging renewables industry - housed at the £10m NWES managed OrbisEnergy. Check out our website for great pictures from the top floor of the most easterly building in Britain!

I thought that I would post a blog entry by a judge for the "Enterprising Britain" competition who visited us in Lowestoft. As you can see he was impressed by what he saw and we will know how successful we have been at the national awards in October!

Enterprising Britain: A Judge's PerspectiveBy Maurice Helfgott, Founder of Amery Capital Ltd.Published Monday, 20 July, 2009 - 18:53

As founder of investment and advisory firm, Amery Capital , whose investments include Long Tall Sally, I was appointed a judge in this year’s Enterprising Britain competition has been a fantastic experience.
I have now completed both of my judging visits and each has highlighted how passion and dedication can transform lives and communities. It is great to see projects demonstrating how working in partnership can create new and exciting opportunities.
Each year, Enterprising Britain seeks out the most enterprising place in the UK, somewhere which has improved the local climate for business by creating opportunities for residents to be enterprising.
In these tough economic times, the dedication and vision of the people involved in these projects is a real inspiration. Entrepreneurship is key to our journey out of the recession and will be crucial in building a strong economy for the future.
The project I visited in the South West is run by The University of Plymouth, which is taking a leading role in the area’s social, economic and cultural development. It is fully engaged and working in partnership with a variety of organisations and agencies across the city to ensure the programmes developed are based on real need and are complimentary to partner activity. The university has developed a wide range of projects targeted to create an impact and raise levels of aspiration and quality of life.
Particularly interesting in Plymouth was a groundbreaking new partnership between the university and the Royal Government of Bahrain. It is a great example of private sector investment in the project and signals the creation of exciting international links and potential investment in Plymouth’s science and technology sectors. It is anticipated that the partnership will significantly boost the city’s financial and knowledge economies and its promotion of the vast opportunities available is definitely something I think others can learn from.

In the East of England NWES, a local enterprise agency in Lowestoft, was set up to reduce disadvantage by encouraging enterprising activity and self employment. Concentrating predominantly on people who are long term unemployed and facing barriers to work, its aim is to increase the number of business start-ups within the town by offering support, training, mentoring and provision of finance and flexible workspace.
The jewel in the crown in Lowestoft is the newly opened OrbisEnergy centre – an £8.7million investment designed to capitalise on the renewable energy sector. Amongst many other projects, the organisation gave £3million of its own money to fund the Lowestoft Enterprise Park, transforming a derelict industrial area into a thriving community of small businesses. NWES is about finding ways to give real benefits to both individuals and the community so that it is no longer dependant on just a few major employers, but offers a range of employment opportunities throughout the area.
Both projects I visited have successfully created jobs, reduced unemployment and attracted inward investment. The knowledge and experience they have will prove a vital aid for stimulating economic recovery and I wish them the best of luck in the competition.

NWES is proud to be the Eastern area representative in this years competition and are happy to share our experience with any other "enterprising place".

Who bears the brunt of the recession?

Over the last few weeks there appear to be an increased level in the number of stories about the private sector bearing the brunt of the recession whilst the public sector sails on regardless. It is an interesting concept and one which deserves significant time expended on it by the very best political brains for the good of the country.

Is it true? Looking at the facts it is clear that the cuts in jobs and expenditure is falling almost entirely on the private sector. Public sector employment has risen sharply over the last 10 years and shows little sign of contracting whilst the rise in unemployment can be attributed to private sector cutbacks. In general though it is fair to point out that the public sector often lags behind the private sector as it is difficult to implement change and is subject to political influence rather than economic reality.

We are entering a different climate, one which many people are too young to remember -austerity. The post war mentality of save, mend and make do lasted with us until the early 1980's and then an era of spending has changed the way that we live. I still live by a mantra that if I cannot buy it with my own money then I do not buy it. It may be out of favour as a philosophy and yet I have no money worries and live within my means! In corporate life however we need to learn the value of money once again. Political spin where all spending is "investment" needs to be stopped. Capital programmes are investment but current spending is exactly that - spending.

If we do not cut public expenditure sharply then we will return to an era more akin to "Life on Mars" with record unemployment, industrial unrest and appalling public services. We hear that cuts in public spending means a cut in services. This is untrue. Looking at productivity levels in the public and private sector over recent years we see a gap of about 20% - indeed in recent years public sector productivity has fallen!

The cuts do not need to be across the whole spectrum but the increase in productivity does. Thus if a department such as Health is protected from cuts then that is in return for an increase in productivity. In this department alone the waste is enormous and simple business techniques could save billions of pounds which could result in more being done for the sick and vulnerable.

I would like to see ALL public authorities conducting an exercise whereby every service is investigated and is contracted out to the private, social or voluntary sector unless it can be proven that to do so would be more expensive or result in a worse service. Waste would soon be stripped out, creativity and dynamism would result and I believe that we would get a better service for a lower cost. Eventually this would lead to more jobs, lower taxes and an improved social structure.

So will this happen? Maybe, but slowly, as it appears that politicians believe that to articulate this would lose votes. I am not sure that is true but we need a strong leader prepared to do the right thing rather than the vote winning appeasement.

A Brave new World

The world has changed. The pace and scale of the current recession has heralded a new way of thinking about the future of capitalism. Undoubtedly the current basis of our model will not radically change (at least no one sensible is suggesting that it will) but the way in which we do business will do. The settled and safe view of the economy has been shaken and corporate life in the future is unlikely to settle into its previous comfortable position. Industries that are "too big to fail" are simply too big and this opens up a wealth of opportunity for a new breed of entrepreneur.

An unprecedented number of people are looking at new ways to do business. This could be the model of business e.g. a social enterprise rather than solely for profit; or the way in which trade is carried on, with new ways of using existing resources or by consumers changing their buying methodology. All this will happen at a speed not previously seen and so it will take nimble and flexible businesses and individuals to provide solutions rather than the "supertankers" of multi national companies.

Great businesses emerge all the time and innovation, desire and enterprise are found as easily in a recession as in boom times. Barriers to entry are lowered; labour, materials and premises are cheaper. And the motivation is greater - why bother risking it all to be an entrepreneur when you can risk other peoples money as a trader and make enough to retire on by age 30? That is why most people would be hard pushed to name a true entrepreneur who has made it big in the last 15 years.

So the time is right to usher in the new capitalism with less reliance on a handful of banks, retailers and industrialists and more variety, innovation and choice. There will still be casualties but the next few years could herald an exciting new world - perhaps now is the time for governments to get firmly behind start up businesses rather than protecting the few or trying to pick winners.

In my opinion there has never been a better time to start up your own business.

Is it that hard to implement an expenses policy?

I have resisted the temptation so far to comment on the scandal of MPs expenses, however it does raise a much more important question - how are our taxes spent?

What I find difficult is the inexplicable refusal of anyone named to admit what we all know to be reality i.e. they have been caught "with their hands in the till". The answer......in line with the general mentality of the public sector is to have an inquiry, convene a panel, take ages and come up with a compromise.

Is business any different? I would split businesses into those that are owner run and those which are larger e.g. PLC. In the latter there is always an expenses policy and most people lower down in the organisation adhere to them under threat of dismissal if they falsify claims. Higher up some of these organisations are run as personal fiefdoms by individuals who have lost all sense of reality. Just look at the extravagant expenditure incurred by Fred Goodwin or the arrogance of the US car manufacturers flying around in private planes. It is not their money and so they regard it as a "perk" and there are too few people prepared to challenge them. Exploitation in my eyes.

In an owner run company there is a knowledge that every penny counts and so expenses are kept to an absolute minimum and have to be justified. No expense account lunches here - a sandwich during a meeting is the most that can be expected. In NWES expenses are minimal. Staff members understand that we can only spend what we earn and so if we increase mileage rates for example then there is less to pay on salaries.

We have heard so much about "moral compasses" from our politicians over the years but most have been shown to lack these. Forget the rules, common sense should dictate what can be justified and what cannot. There is a simple solution which can be implemented within a week. ALL employees in the public sector should adhere to a single set of rules which apply to all publicly funded organisations. Most businesses could supply a template to be adopted and then there would be no need to hold special committees etc. It would be transparent and those of us who pay taxes would know that our money was being used wisely.

I know that this will not happen because it employs common sense and a quick and workable solution. Also there are too many people with a vested interest in maintaining their perks. Still we can hope!

Do we value work placements?

As we get into the throes of the academic summer term the thoughts of teachers and students in Years 10 & 11 turn to the question of work placements. What should be one of the most important choices of the whole year for school and student alike is so often an afterthought and appears to be a "tick the box" exercise. There are some brilliant exceptions of course but my experience suggests that these are unfortunately in a minority.

One of the key tasks of a school is to prepare their students for a life of worthwhile work (although some teachers disagree with me!) and this - often first taste - of work experience is crucial. Chose correctly and it can be the catalyst for making important career choices; get it wrong and options can be cut or unfairly restricted.

So what makes a good work placement? I have a few simple thoughts which should be at the core of any decision:

1. The student and the placement have to be carefully matched to ensure that both parties benefit from the experience.
2. Pre and post placement reviews are a necessity to agree a learning programme and then assess what was achieved.
3. Placements with employers should all have a full and detailed work plan to ensure that the charge of "unpaid tea boy/girl" is unfounded.
4. Identify what motivates each student and use this in the matching process in 1 above - as any employer will tell you, a motivated employee is worth looking after.
5. The placement lasts for the normal working day whatever that may be. For a student to understand what work entails they need to experience the real thing not a truncated version.
6. Incorporate the work placement into the curriculum and use the experience gained in appropriate lessons e.g. Business Studies

Employers are delighted to help schools with rich work placements but find the bureaucracy and lack of real ongoing engagement to be deeply unfulfilling. Businesses understand the need to look after the workforce of the future but find it frustrating to come up against obstacles when offering to help. A lot of good work is going on but perhaps now is the time to have a radical rethink about how these placements are organised and what they should achieve. With the advent of the new diplomas a different tack needs to be taken so when better than now to think radical thoughts?

In Norfolk "The Exchange" is the place to go for advice on placements www.norfolk-exchange.org.uk and any company wanting to know how to participate should contact them as the first point of call. I know that The Exchange is looking at many exciting innovations to come in over the coming year so keep watching!

One final thought ......perhaps ALL teachers should also undertake a two week work placement EVERY year in the private sector - it would help them understand the importance of placements, provide material for lessons, re-invigorate "tired" teachers etc. Could it ever happen?

When to ask for help

I was chatting to a business acquaintance recently when the topic turned to how and when an entrepreneur should expand their management team. One particular company was discussed as we both knew and had some knowledge of the principal and their business. As is the case in so many fledgling enterprises the business was doing very well, had built up an enviable customer list, was growing steadily and yet the owner seemed to be doing everything himself. One minute on the phone to a supplier, the next in the warehouse moving on to discussing finance and then dealing with an advert.

An entrepreneur has to be many things but they also need to know when to expand the top team to allow them to build the business rather than run the business. Too often a good business stalls because the owner cannot physically do more and they then become a bottleneck holding up all growth - the very thing which they should be concentrating on. A good example of how to bring in people at the right time is Karan Bilimoria the founder of Cobra beer. Despite being an accountant Karan still understood that the role of CEO meant that he had to delegate and this he did in 2001 with the appointment of a Financial Director.

"He was a godsend. He came in and took a huge weight off me. By taking on the FD role he freed me up. It shows the huge impact that a new member of a team can bring."

Whatever the size of business and the skills of the owner there comes a time when a team has to be built at a senior level. Leave it too long and the business stalls and can crash, too early and the costs may be a limiting factor. It is a skill to determine the right time and that is where an external pair of eyes can help. Getting some independent advice from a trusted advisor can help the owner of a small business to see the problems that they are too close to identify.

An entrepreneur needs to get their hands dirty but not to the extent of being a "Jack of all trades". Concentrate on what you are good at and expand your business through strategic thinking - it works. Just ask Karan Bilimoria!

Is football a business?

One of my passions is following Norwich City FC who have just fallen into the third tier of English football for the first time in my lifetime. Much has already been written about their demise but I thought that I would look at it from a business perspective to analyse the problems that the club faces.

The Board: With any business a period of sustained decline over a number of years has to come down to the failings of the Board of Directors. A Board has several duties and responsibilities but its major role is to set strategy, empower and monitor progress. Under all of these measures the NCFC Board has spectacularly failed to deliver. There has been no published strategy other than a few meaningless platitudes such as "Prudence with Ambition" which point to a preoccupation with a marketing spin rather than any solid and workable business plan. There is an argument that the Board abdicated responsibility rather than empowering which has resulted in the current run down of its assets. Monitoring of progress should have been the easy bit but unfortunately there has been a weakness in not making the appropriate decisions at the right time - resulting in delay, confusion and a demoralised workforce. It would be easy to blame Delia Smith for all of the woes of the club but this is patently unfair. She has invested heavily in the club and recognised that she is not a natural Chairman and so did not take up this post. The mistake that she made was not to build a strong Board around her. Instead she has a decidedly substandard team which has been unable to meet the demands placed upon it. To rectify this Delia should be insisting that the Board is replaced with credible business people and a smattering of football experts that can take the club forwards to the next stage. Change is needed at this level before implementing the next stage in the clubs recovery.

The Executive Team: This is actually a hard one to call because apart from Neil Doncaster, the CEO, the rest of the senior team are almost invisible to the public eye. Any CEO who has overseen such failure must be at risk and Mr Doncaster is no exception. Unfortunately we have become used to carefully constructed "non phrases" emanating from this direction which amount to more spin rather than any desire to rectify the obvious failings within the club. Allowing key members of staff such as Andy Cullen to go without any adequate replacement has contributed to the spiral of decline. A club has to live within its means and as such every aspect of the business has to be looked at with a view to efficiency and unfortunately this does not appear to have been the case at NCFC. A strong team needs to be built to run the club with clear direction from the Board and the resources required to live within its means. Now is not the time for tinkering - the Canaries need major surgery.

The Manager: A strong manager is required at any football club. However their scope and remit should be clearly defined. Budgets provided, facilities made available and time allowed to implement change. A manager needs a strong team around them - people who fill the gaps in knowledge and ability and who can work together for the benefit of the club. As in any team a mixture of youth, experience, desire and proven success is preferred. Bryan Gunn our current manager has many of these skills in place and his desire to do well can probably never be surpassed. However is the support team up to the job? If Bryan can be mentored by an experienced and respected football figure then he could be the man to take NCFC back up into the Championship. Without a guiding hand the passion alone would not be enough but the club must stop the revolving managerial door which is destabilising and the reason why we are in our current position. This is the Boards fault. It is not my place to suggest who should fill this post - I am sure however that the track record of the current Board points to the fact that they cannot be trusted to get it right.

The Fans: In case anyone at the club had forgotten we are also known as CUSTOMERS! The support given has been stupendous despite the mediocrity that we have become accustomed to. The fans have done all that they can for the club and now it is time to repay this loyalty. I would estimate that the fans are worth £10m+ to the club in gate receipts and club related sundry expenditure alone - hence we are the most important part of the equation. No business can count upon the loyalty of its customers forever if it continues to disappoint them with the quality of its offering. Football is entertainment and discretionary expenditure even allowing for the tribal bond that links the fans to the club. There are many examples of well supported clubs losing their fan base through years of neglecting their needs. the fans are realistic - we do not expect Premiership glory but we do require commitment, entertainment and the odd moment of glory. (The average fan accepts that NCFC has one good year in ten!)

The Players: These are the employees of the club. Much has been written about how and why football beats to a different economic drum but this is patently not true. There is no need to run a football club any differently than any other business. Employee wage inflation should be halted, contracts rewritten to allow clubs to dismiss under performing players and to stop the disgruntled player seeking to leave at their whim. The culture of win bonuses should be dropped with say an end of season target resulting in a one off payment relevant to the clubs financial benefit. The argument would be that no players would want to come to Norwich if we insisted upon such contracts. I do not believe this is true. We would attract players who are keen to make their mark, can see significant reward for success and with a desire to achieve. It only needs one club to start the process and the rest will soon follow.

Relegation should be a wake up call for everyone and an opportunity to implement the tough decisions for the long term future of the club. No more talk of "sugar daddies" riding to the rescue with riches galore - despite the spin few clubs have this fallback position - indeed most would be delighted with the investment made by Delia. Run the club well and success will follow, build the right team on and off the pitch and the fans (customers d not forget) will support them forever. The first step has to come from Delia though to build a strong Board. The very best of luck Delia from all City fans.

On the ball City.

What do you learn from a conference?

Yesterday I attended the Institute of Directors Annual Conference. This is always an interesting affair and attracts speakers of the very highest quality. Reflecting on the day I wondered what delegates thought about the conference and what they will change when they get back to running their companies.

As is to be expected, the speakers provided a wide variety of views and opinions and some were of course contradictory! When I attend any conference the major selling point for me is "will I learn one thing that I can implement to improve my business"? If the answer is "yes" it is a success, if not then perhaps it was not worth it. Sometimes the learning points come via networking and casual contacts others through some inspiring or thought provoking comments made by a keynote speaker.

I have learned that it is unlikely that I will gain insight from a politician of any colour as they are all scared of making a definitive statement - a sad albeit understandable reflection. You can be entertained and informed by these individuals but will it change what you do? Not in my experience. The best speakers are usually those with less to lose in terms of career prospects etc and hence for me the highlight was Tim Smit the founder of the Eden Project. He articulated many of my values and was a resounding champion for ethical capitalism. It is not all about maximising profit but optimising profit and taking a wider view of impact on local areas. This is true sustainability. Those organisations that show scant regard for their customers or employees have a limited life - when it comes to the crunch they will be the hardest hit.

I noted three points which I think are good lessons for anyone in business:

1. Optimise profit not maximise profit
2. Do not shy away from the hard decisions
3. Stay away from the negative people - wherever they may be found

Nothing earth shattering but points that are all too often forgotten in the day to day operation of a business. Follow this guidance and you will most likely run a good operation.

There was a mood of underlying determination in the audience to prosper despite the mess that we are in through no fault of our own. I still maintain that this is an excellent time to start or grow your business and this view is shared with many commentators at the conference. I just wish that our political rulers could follow the guidance above and then we could all move forward with confidence.

So what did the Budget do for enterprise?

Rarely have I approached a budget less optimistic that anything would be done to stimulate enterprise - the good news is that I was not disappointed! Once you look behind the political "crowd pleasers" there is nothing to cheer anyone in business or indeed considering starting one.

We all appreciate that the public finances are in an unprecedented mess but real action to address this would in itself be good news for business. What companies need is:

- faith in a governments ability to accurately forecast growth (or decline) which the Treasury seems spectacularly unable to do. They have stretched the bounds of credibility too far this time and it begs the question of the Treasury - are they political "spinners" or public employees providing unbiased opinion based upon fact?

- a clear medium and long term strategy to eradicate the record levels of debt which we currently see. This was no-where to be seen. History will treat very harshly those who play politics with the future of millions of people. In the last 18 months the government has mortgaged the future of the next generation for the next 18 years.

- incentives to reduce unemployment by taking on extra staff. Unfortunately the tax on employment for businesses is so high that to increase your work force at the moment is actively discouraged. A holiday on employer NI for all new employees taken from the unemployment register would be enough to sway some business towards employing new staff, thus saving unemployment benefit and increasing the tax take.

- belief in the fairness of the system. Small businesses cannot afford high powered tax advisors and so in general pay full tax on profits earned. Big business pays a fraction as they employ tax avoidance advice to minimise their contribution. If you analysed profits announced by FTSE100 companies and then the corporation tax paid there would not be a high correlation! Tesco announced £3billion in profits recently - what is the size of the cheque that they will be writing to the Treasury?

Simple measures to encourage enterprise could radically improve our economy, revitalise industry and capture the innovation that exists in this great country. But we see nothing. Some nods to the lobbying by big business which will do little for the economy. Does anyone truly believe that offering a £2000 part exchange on a 10 year old car which you must have owned for at least 12 months will make people rush out to buy a brand new car?! If you ride around in an old banger the chances are that you do not want or cannot afford a new car.

The debt fuelled boom has ended with the biggest bust ever seen. The future is based upon saving and investment (not the euphemism used by government in lieu of spending), reducing and eliminating debt so that future generations can benefit. Delaying this strategy by even a few months condemns us to years of misery - this is no time to play party politics.

Can The Apprentice teach us anything?

So we are in the throes of another series of "The Apprentice" and I am still undecided - is it a good thing for encouraging enterprise or not? Without doubt it is compellingly entertaining and "good television" but is it giving prospective entrepreneurs the wrong impression of what it takes to start up in business?

In favour:

- There are good lessons to be learned from the exercises and "one liners" from Alan Sugar
- It highlights personal characteristics and the importance of teamwork
- It forms an excellent training aid on how NOT to do things!
- It raises the profile of business

Against:

- The participants are selected to represent the most divisive in society to engineer conflict
- Without exception the candidates are self deluded as to their skills and abilities
- Sir Alan is not looking for an "Apprentice" but a competent manager
- The programme is unclear as to its purpose - is it seeking a leader, apprentice, manager or entrepreneur?

I believe that the viewing public are generally astute and can see from an early stage those who are out for a "media career"; Z list wanabees; nasty personalities and hopeless inadequates. Once these are eliminated there are few if any credible candidates left to assume the mantle of a true business person.

The tasks are appropriate to determine any potential leadership qualities but as each candidate is solely out to destroy their competitors the result is usually determined by who can wriggle their way out of any blame the best. Perhaps if Sir Alan was to fire people who portrayed an obvious aversion to teamwork, truth, hard work and intelligence we would see someone win who was worthy of the title.

Think back - how many of the candidates would you want to employ or work for? None probably!

So The Apprentice is probably best watched for purely entertainment purposes and as an example of how NOT to behave in business. Then it may play a useful role.

You've got to be in it to win it

I was talking to one of our tenants last week about the effort involved in entering business competitions and if it is worth it. They are a successful business and indeed won three awards last year but were questioning the point of entering more at a time when maximum effort is being put into growing the company.

Applications to the various competitions advertised can be time consuming and it is easy to overlook or ignore them in favour of more pressing items; however I believe that this is a mistake. The issue at hand is not about time available but one of strategy. Why are you entering the competitions? If it is solely for personal vanity then perhaps it is a low priority but if it forms an integral part of your marketing and business strategy then there is a compelling argument to pursue these opportunities with gusto.

At NWES we have always considered the entering of appropriate competitions as an important activity and on analysis I would categorise the following as sound reasons for incorporating this into your plans:

1. It amounts to low cost marketing and advertising. In a time when every penny counts it is vital to account for every penny of your marketing spend. Competition entries take up time but not money (usually) and assuming that you make it to the final short list can provide valuable publicity on a wide scale. A good example is the Barclays "Trading Places" awards which are currently looking for entries. Here previous winners are featured on national publicity, there are articles in heavyweight papers and trade magazines and all for free! This level of exposure would be beyond all of the winners and can only accelerate the growth in their businesses.

2. It improves staff morale, retention and recruitment. A little thought through by product of winning competitions is the effect that it has on staff members. Everyone likes to be associated with success and feel pride in working for their company. At NWES we focused on a particular category for three years which was the EDP "Staff Care" award sponsored by the Learning and Skills Council.. After being in the final three for two years we won it on the third attempt in 2008. In essence this was won for being the company in the region which does the most for staff through induction, support, training and reward. We have always felt that we care about every member of staff who works for us but winning this award demonstrated this to the outside world. In the current climate staff loyalty is key and by winning this we have shown that NWES is an excellent company to work for - it makes retention and recruitment much easier.

3. The "feelgood factor". Winning is addictive! Without doubt it engenders a lift within a company and an added "spring in the step" when going about daily duties. At a time when all around seems doom laden this is a quick and easy way to lift spirits. This should never be underestimated. I am a great believer in that the general tone of a workplace is reflected in the work produced. A demotivated or unhappy workforce are not productive and can spell the end for many companies. Happy people work better!

4. It leads to more business. Everyone likes to be associated with success and the same is evident within the business community. At a time when supply chains are crucial, businesses will wish to ally themselves with "award winning" companies. The publicity from my first point and the added prominence within your sector can lead to new business. We use our award winning status in bidding for new contracts to establish our credentials and demonstrate our ethos. I cannot say for certain that it leads to new business but I would like to think that it plays its part.

5. Awards ceremonies are fun! Do not underestimate the restorative powers of a good night out - especially when someone else is paying! Enjoy it you have worked hard enough for it.

In summary a carefully planned awards entry strategy can have many benefits to your company. Next time you see an appropriate competition enter it because "you have to be in it to win it"

Do we really have "Solutions for Businesses"?

The government has recently launched its "Solutions for Businesses" product portfolio which is the result of much consultation under the Business Support Simplification Programme. On reading the proposals it is difficult to see much to argue with; the product range is rationalised, it hits the main elements of support that a new, growing and maturing business will need and it is simple to understand. So why is it that I still retain some element of doubt that we will see real change?

Perhaps it is because the path of history of successive governments is littered with good intentions. So often we see attempts to improve the way that things are done in many areas but unless you alter the mindset of those charged with administering the delivery then little will change for the end user other than the "spin".

In "Solutions for Business" we have a good framework from which to start really building a business support arena worthy of the ambition to make the UK a leading place to start and grow a business. The big test is can different government departments resist the urge to add pet projects, create new streams and smother with bureaucracy? Already the initial portfolio has had an addition with the advent of a "Support for the Automotive Industry" product. Why this funding could not have been added to an existing strand such as the excellent Manufacturing Advice Service (MAS) I do not understand. The desire to create a headline with something "new" overrides the common sense approach every time. Hence my concern and doubts.

To make this work we need real leadership at the top in government with a firm pledge that no new products will be launched for a given period at which time the portfolio will be reviewed to assess the impact and need for change. Of course there will be times when it is right to support a sector or industry undergoing change but this can be done within the existing framework. An announcement of extra funding into an existing product may not gain the attention as much as a "new" launch but it is what business needs and wants and if government is to retain any scrap of credibility it is a change in the mindset of policy makers that is required.

Solutions for Business needs to be seen as the government vehicle for all help and not just a BERR initiative. Perhaps the Treasury could "fine" any department/authority that announces an initiative which does not fit any funding stream into the existing portfolio and that creates a new "brand". A fine equivalent to the amount pledged should concentrate the mind! As we have finally got to the stage where there is a credible support package it would be madness not to give it wholehearted backing for a given period to determine its impact.

Full adherence to the scheme is envisaged from 2010 onwards but I would hope that all delivery programmes are matched as soon as possible. We do not have the luxury of time in the current climate - what is needed now is immediate action.

That's the way to do it!

Last week I encountered the two extremes of customer service - exemplary to diabolical. It was interesting that three examples of service to the highest level were from private companies and that of the lowest level was from a monopoly.

How to get it right - Lesson 1: I stayed in London at the Chesterfield Hotel which is part of a small chain (Red Carnation). I was first alerted to them via the Tripadvisor website which I have used for many years in deciding where to stay in the world (millions of reviewers cannot be wrong) and have never been disappointed. The hotel is a model of how to treat its customers well and ensure loyalty and recommendation. It is the little things such as a pre-stay questionnaire to determine your needs and preferences which will make your stay more enjoyable e.g. duvet or sheets. The hotel exuded service at every juncture. From the chambermaids who always had a cheery smile and the highest of standards to the front desk who remembered your name, from the restaurant who would accommodate any request ( I overheard an American family order their breakfast and apart from being amazed at what they wanted I was impressed as the hotel delivered without raising an eyebrow!) to the slick service at the bar. Congratulations to a group who deserve to thrive.

How to get it right - Lesson 2: Have afternoon tea at The Lanesborough. Perfection. Enough said!

How to get it right - Lesson 3: For a special occasion we had dinner at Le Gavroche. As you would expect the food was of the highest order and presented with elan. Once again though that was probably to be expected at a 2 star Michelin restaurant but the service stands out. The waiting staff are trained to the highest standards but performed with a smile and refreshing mixture of professionalism and friendliness which sets them apart from the often stuffy and detached service seen in other top restaurants. A team at the top of their game led by Michel Roux who was there on the night and took time to visit every table.

How to get it wrong - National Express East Anglia step forward as a company who do not care about their paying passengers. I could go on for pages with a diatribe of their shortcomings but to mention a few; Filthy train, overcrowded (just how safe is it for trains to be packed with standing customers?), no catering, no conductor, no policing of some passenger behaviour which was appalling and whilst not the fault of National Express, if they had a conductor going down the train it may have helped curb some excess. I have always found the service on this line to be bad ever since Anglia Railways lost the franchise. I know that National Express will take no notice of mere fare paying customers as they could not care less about us or they would change the way that they do business. It just goes to show that competition (especially in a recession) raises standards and monopolies lower them.

Good luck to Red Carnation, The Lanesborough and Le Gavroche - you deserve to succeed. National Express I hope that when the day of reckoning comes that you are held to account for your greed and failings.

Where history can help the future

Can we learn from history? That we are in difficult times is obvious to all but apart from policies designed to meet day to day problems as they occur has anyone given much thought to how we will extract ourselves from this recession? We are entering a new world - one far removed from Whitehall and I believe that the ruling classes have misunderstood the prevailing mood "on the street". Even today, from very senior personnel, I have heard predictions that we will all be back "to normal" in 18 months time. But exactly what is normal? Certainly not the unrestricted consumer borrowing and spending of the last 10 years. That was an artificially created boom built on sand and which will take far more than 10 years to correct.

Patterns of behaviour are changing as jobs are lost and more importantly the fear of losing your job increases. This caution and desire to restrict and repay borrowing will - hopefully - lead us back to a more sustainable way of living within our means. But who is it that will lead the comeback; be the driving force for future growth and job creation? Not, in my opinion, the large multi national firms. Many of these resemble the last days of the dinosaurs - large, unwieldy creatures unable or unwilling to adapt to the quickly changing climate. Real growth will occur from the small business sector, new start ups and enterprising individuals with the ideas, passion, belief and knowledge to exploit the rapidly changing market.

So what are we doing to encourage these future "white knights" to ride to our rescue? Not a lot as far as I can see. Central government still fails to understand the significance of this sector of the business community and caves in to sophisticated lobbying by "big business" with handouts remarkable in their size. As usual politicians want an immediate headline, an easy solution and fail to show the leadership and vision necessary to safeguard our future.

History can teach us lessons and help us in determining our future. So let us look back 30 years to the recession of the early 1980's. Then an innocuous, low cost and unheralded scheme had perhaps the largest influence on providing 20 years of prosperity. The Enterprise Allowance Scheme. Much derided, it acted as the catalyst for literally tens of thousands of new businesses to be created, hundreds of thousands of new jobs and lifting millions out of disadvantage.

A simple scheme it offered a meagre allowance of £40pw to unemployed individuals to start up in business. Combined with training and support it spawned an increase in entrepreneurial culture at a rate not seen before or since. Of course some people played the system just to get an increase in benefits but these were a minority and due to the amount of work required to start up in business were soon identified. But it gave just enough support to encourage those who would otherwise have not taken the plunge and started their own business, it allowed the family to survive in those first few crucial months as the business was created and more importantly than ANY other benefit it gave the prospect of helping others with no cost at all as employees were taken on by these fledgling businesses.

The time is right for a new Enterprise Allowance Scheme to combat what may become the worst downturn in living memory. Taking into account inflation since 1980 offer say £100pw to anyone who is unemployed undergoing training to start in business. Guarantee this for 12m and watch the number of starts rocket and revenues increase. Without putting exact figures on the benefit to the UK it can be seen that this is a true "win-win" situation. Jobs are going to be harder to come by and so people will sit on unemployment benefit for longer without this positive action. Whilst the allowance would be c£5k pa extra the number of people coming off benefits will increase as they start up in business, making a positive contribution by paying taxes and creating more jobs via their growth.

The benefit to society would be immense and I would estimate that the cost to the public purse would be negligible. What is there to lose? If no-one starts in business then there is no cost to the exchequer, for every business that does start there is a £5k pa cost but savings on benefits as they come off these quicker than would otherwise be the case and the added benefit of new jobs being created. This is the kind of solution that we need in these troubled times, but who has the vision to make it happen?

One for all and all for one.

For many years I have been a part of a small peer review group that meets up a few times each year to assist each other on a variety of different subjects. I rate the importance of these meetings extremely highly and they have proved to be of immense worth to each of the participants.

So how do they work? I would venture that for a successful group to operate there needs to be a few clear ground rules:

1. Each of the participants is from a seperate region to bring differing viewpoints to the debate and ensure that there is no competition issues.

2. The participants need to be of a similar mindset to enable appropriate open discussion.

3. You need to be prepared to be entirely open about all aspects of the business - from finances to people, systems to service.

4. You agree to rotate meetings with the host dictating the agenda as relates to their company and any specific problems they are facing.

5. You meet 3 or 4 times a year.

Our group has consisted of 4 or 5 agencies with a core of three ever present members. As you would expect there are some changes which occur as people move on but the guiding principles remain unchanged - a desire to learn, assist and support without passing judgement. It is no co-incidence that the members of this group are amongst the very best agencies in the country and have grown at a rate far in excess of the average. Where others have declined and failed we have prospered due in no part to the advice and support that we can call upon from each other to make the most of opportunities that are presented to us.

A visit typically lasts two days - starting at lunchtime, working right through dinner and finishing in the early afternoon the next day. At our early meetings we learnt about the general position of each agency and the issues which they were facing; this is vital background information which assists as we have moved on to helping solve specific problems identified by the host.

The range of topics discussed over the last 5 years is wide and varied and includes staffing; financial control; service offering; diversification plans; strategic direction and succession planning. In visiting an agency I get as much as I would as host. I learn someting new, get a chance to compare important issues and potential solutions, understand the thinking behind decisions and perhaps most importantly come back keen to implement what I have learned.

Our review group is a source of expert consultancy advice, available free as and when needed and perhaps most importantly it is objective, based on experience and cuts straight to the point! No allowances for ego's or sensitivities made!

Our experience has inspired other such groups to set up, from gender specific to role specific, and it has provided a ready source of help for our staff on any specific issues that they may face. A most useful network to tap into and a real example of collaborative working with no hidden motive.

I would exhort others to follow this example if you are serious about improving yourself and your business. The model can work in any industry and at any level. The most important thing is trust - do you still have the capacity to trust and be trusted?

Can we get back to common sense banking?

Exactly a month ago I wrote about the banking crisis and I was suggesting that we need to rebuild trust between bankers and their clients. Looking over the last four weeks many initiatives have been announced, record losses are in the public domain and we are on the third (I think!) banking bail out. All of this but we do not seem to be learning from the mistakes of the past. This is so frustrating and leads me to believe that some people think that a political solution is more important than a real solution. We have an excellent opportunity to reign back the credit culture fuelled by the "must have now" demands of people who do not know what it is to work and wait for something.

Perhaps I am showing signs of old age but I was brought up to appreciate the need to save and avoid the misery of too much credit. My background is very much blue collar working class but we never lived beyond our means - yet I never felt deprived in any way. The country would have a much sounder platform from which to grow and thrive in the future if we started to choke off the easy credit culture so prevalent.

What frustrates me is that Banks and others are being pushed to maintain historically high levels of lending and, for example, it is made easier to get 100% finance on a new car just when we need to stop and return to normal.

If we laid down in law that a deposit of at least 10% was required for a new house and no mortgage lender could exceed these levels then house prices would normalise and people would not be faced with a desperate need to jump on the roller coaster ride for fear of being left behind. It would reduce the numbers of repossessions as people would only take on a mortgage when they have shown an ability to save. Undoubtedly some speculators would be unhappy but we should not base a housing market upon the gamble of potential capital gain. Similarly with say a 25% deposit on any new car.

The same is also true of businesses. Whilst I have sympathy for workers at LDV, the truth is that the company has not made a profit in four years and if it needed cash to stay in business then its owner need only sell one of his yachts - not appeal for a government bail out. Businesses need cash to survive as I have previously pointed out and banks have an important role to play with short and long term lending - but only to viable businesses. The recent story about a pampered celebrity chef left me very annoyed. Here was someone wanting the bank to put in 100% of the money needed to keep his restaurant chain going but refused to place any of his own wealth at risk either in cash or security. Exactly why does anyone think a bank should take this action? If the chef in question was confident of success then he should have backed his feeling like any good entrepreneur with his own cash. Not to do so and then go on a public whingeing session is doing a disservice to real business people.

So I am advocating a return to good old fashioned lending combined with a savings culture. It will mean a perod of decline whilst the markets readjust but in the long term it is the only way forwrad for the country. Whilst we are at it perhaps we could cap the ability of governments to borrow too! It saddens me the levels of debt that our children will inherit through the selfish actions of our generation.

The lonliness of the long distance runner

Being an entrepreneur, running a business, is inherently a lonely existence. Whilst you are at the centre of everything that is happening in your company and aware of changes within your industry, all too often there is no-one to turn to when making vital decisions. I equate running a business to completing a marathon – it is a long journey; at the start there are high levels of enthusiasm, excitement and anticipation; difficult challenges to encounter and overcome but there is always a goal in sight and the sense of achievement in reaching it is difficult to describe to anyone who has not run the race.

Any serious and dedicated athlete realises the need for a coach and mentor to help them reach their goals and yet in business so few entrepreneurs follow the same path. No doubt without a coach you could run a marathon but will you ever realise your true potential? Why is it, when it has been proved that businesses which take advice and support fare better than those which do not, that there is an inherent reluctance to access these extra “tools” which may give you a competitive advantage?

Perhaps it is the popular hunt for instant success that makes many people treat business like a sprint. I would argue that, in business, long term sustainability is far more important than short term glory. The current example of many banks should highlight the damage that can be done by the lack of long term planning – learn from their mistakes.

So how can you help combat the feeling of isolation and tone your entrepreneurial abilities ready for the marathon ahead? Accessing help is easier than you would expect – finding quality support is slightly harder.

Firstly do not get hung up on the definitions of advice, mentoring, support, incubation etc – let the academics worry about such minutiae – most people want a combination of all of these at different points in their business life. You need your own personal “coach”. Source someone who you can trust; they should be independent, impartial, experienced and most of all approachable.

The next step is to use them effectively. They are not there to run your company but to help you develop your skills, hone your decision making and to bounce ideas off. Their role is essentially passive and most of the effort should be made by you but through their guidance you will develop solutions to business issues.

So being an entrepreneur can be lonely at times but those who seek out help and support along the way will develop faster and most importantly reach their goal before their competitors beat them to it.

How do you start such a search? Scour your networks to find someone who meets the above criteria or contact a leading independent business support organisation such as NWES who can help you.

A hive of ACTivity?

I was intrigued to read about the latest initiative from the National Federation of Enterprise Agencies (NFEA) - ACT a network for enterprise support individuals. Drawing from their website ACT is "Especially developed for individuals working within the enterprise sector....... a unique network for like-minded professionals who offer services such as advice, coaching, mentoring and training to those starting and running small businesses".

It is certainly an interesting development from the NFEA which is aiming at the individual rather than the organisation, which it has traditionally represented. I do believe that there is a gap in the market for such a venture. I was an outspoken critic of much of what the old "Institute of Business Advisors" provided but without doubt there was a role there which needed to be filled. From my perspective since the merger of the IBA with the Chartered Management Institute the needs of the sector have taken a back seat.

Anecdotal evidence would suggest that there is some dissatisfaction amongst previous IBA members so perhaps the NFEA has stumbled across a real opportunity. However there is a danger that they are entering a crowded marketplace without the resources to achieve market share.

Again according to the NFEA website - "ACT members will be able to benefit from a full programme of dedicated activities including training events, CPD, locally-based networking as well as an annual conference." Using its organisational member base the NFEA has access to many hundreds of business advisors and so if this is exploited well there is a potential for real momentum.

I have previously expressed my frustration at the lack of bespoke support for my trainers and advisors (c30 at NWES alone) and so if the NFEA can produce a compelling programme of events we will certainly participate. So what would I like to see? I do not want a repeat of what is already out there so relevance is of prime concern. Regular bulletins are of use as would be some form of formal induction for people new to the profession. Local networking is always welcome but again it needs to be appropriate. High quality speakers that can enthuse and impart knowledge are vital at any event. Most importantly I would like to see the standards in the industry raised with some nationally recognised and policed qualifications.

With the advent of BSSP some industry focus is welcome and so we will be at the inaugural conference in Nottingham on 28 April. Perhaps we are seeing the beginning of a major new force in the industry. Sign up for the conference and you will find out!

www.nfea.com

Where has all the cash gone?

Cash Flow - two simple words but they are probably the most important to any business wanting to succeed. In dealing with hundreds of aspiring entrepreneurs every year we see many who are passionate about their product, the exemplary service to their clients or the impact that their idea will have on the community. Few, if any, ever talk about cash flow and yet it is the single most important reason why businesses fail.

Too many people confuse cash with profit and they most definitely are not the same thing. There are many profitable companies who have gone into insolvency through lack of cash flow. If your customers start to delay the flow, through late payment or bad debts, then the money that you have available to pay your creditors is of course reduced. If the creditors will not wait for their money then you may have to enter insolvency if your bank will not step in to inject funds via an overdraft.

Whilst some businesses will produce budgets few compile a cash flow forecast (CFF) and yet in most cases this is just as important. We hear many stories about banks not providing short term finance but this is sometimes due to any lack of information provided by the borrower in the form of a CFF or budget - you have to at least give the impression that you will pay the bank back at some point!

By comparing what actually happens with cash flow against the forecasts it is a useful tool for business owners and can aid planning decisions. It also acts as an early warning system for potentially difficult times ahead. When combined with an analysis of debtor and creditor control it should enable a business to overcome any temporary constriction in cash coming in to the company.

So far, so easy! So why do businesses continually fall into the cash trap? I believe that it is poor planning; effective financial control should provide time to address the issue at hand - too often the first time that a business takes it seriously is when the cheques are being bounced i.e. when the cash has run out. Cash is the oxygen which allows a company to breathe; restrict this and the company will suffer and eventually die.

The old adage that "Cash is King" will always remain true. Perhaps in our credit obsessed culture we have forgotten this but it will be those businesses which adapt quickest that will survive. There are many ways in getting cash to flow. We see it every year in the shops when the sales start - this is merely a cash generating activity designed to overcome traditionally quiet periods. Much stock will be sold at a "loss" but this can be acceptable if margins overall are maintained and it frees up much needed cash.

The High Street is very adept in understanding the importance of cash flow and always quick to react (unmoving stock is "dead" money) but some other sectors have been caught cold by the sudden slum into recession. A good example is the car manufacturers. All have huge stock piles of cars which they cannot sell, expensive work forces to maintain and yet none has taken the bold step of really seeking to reduce this stock level and promote demand by vicious price cuts. There are bargains to be had if you know where to look and how to negotiate but each manufacturer wishes to maintain a price position and yet asks for government help to ease their cash flow!

We need to protect a quality manufacturing industry but if I was in power then I would want to see what the companies are doing to help themselves. Cutting costs is one side of the equation but cutting prices is the other side. Profitability may stall for a year or two with this approach but better that than shutting down completely or saddling the general public with debt for generations to come. I know that if say Land Rover, Jaguar or Nissan were to offer a new car at 50% off then I would be in the queue to buy!

The laws of cash flow and supply and demand are closely linked so why have these basic rules been forgotten in so many struggling companies?

Can you work with the public sector?

I am often asked if it is worth - as a small business - trying to gain business from the public sector. It is not an easy question to answer as it comes with many caveats. I thought that I would outline a few of the main considerations:

- Are you credible? The public sector is very conservative in its procurement and you will not even stand a chance of winning a contract unless you have a credible story to tell. A sole trader is unlikely to make it past the first sift of tenders for say the cleaning of a hospital if they have only ever cleaned domestic properties.

- Why is the tender being publicised? Do your research and find out why the work is being put out to tender. Is it merely a cosmetic exercise done every two years where the existing contractor has been continuously employed for say 10 years. If so you need to carefully work out your chances of succeeding before spending a lot of time on drawing up your bid.

- Is TUPE involved? This element is often overlooked when bidding for a contract. It is a vital consideration as you could end up with a huge extra overhead which is not needed. The rules on TUPE are reasonably clear but do not forget to include this contingent liability in your calculations.

- What is the history of the tendering organisation? Not all public sector organisations are the same and they certainly do not all work in the same way. Has the tenderer a good reputation for working with its chosen contractors or are they constantly re -tendering as business finds it difficult to work with them? This is no different to working with the private sector - there are good and bad people to work with!

- Can I deal with the bureaucracy? Do not underestimate this element. There is no doubt that the public sector has a different way of working which is definitely different to the private sector! It is dangerous to generalise and again good research should help you to determine the reputation of the tenderer. Be aware that decision making is often slow, unclear (try and get someone to admit to being a decision maker!) and frustrating! If you are successful in winning a tender the documentation will be onerous. Before signing any contract ensure that you have had the best advice possible to understand your rights and obligations. Be prepared for interference! Do not expect to get a contract, deliver it accordingly and then get paid! The public sector is notorious for "monitoring", "reporting", "liaison meetings", "interim reviews", "steering group meetings" etc. Factor this into your bid. It will happen so you need to be prepared for it.

- The effect on your cash flow. This is a vital element for any small business. However with a few notable exceptions the public sector is notorious for taking a long time to pay. We have several contracts paid quarterly in arrears which can mean up to 5 months before receiving funds due. Whilst there may be profit in a contract can your business afford the cash implications? Try and negotiate more regular payments. We have found some organisations to be excellent in realising the impact on small businesses and if they trust you there can often be payments in advance or at least "profile payments".

- What is the impact on the remainder of your business? Do not put all of your eggs in the public sector basket. Political changes can mean radical rethinks and so you must retain a balanced portfolio to minimise potential risk. I have seen several companies "crash and burn" due to over reliance on one income stream. Spread your risk!

It can be very rewarding to work with public sector bodies but you need to be aware of the potential impact on your business. As I mentioned it is wrong to generalise but the above points are things that you should consider when an opportunity presents itself. If the conclusions are that it is still worth it then go for it with all you have as it can be a great boost for your business. NWES has many contracts with the public sector and we are delighted with how it has worked for our business. We have had one or two issues with some bodies but the overwhelming majority have been and are a pleasure to work with.

So do your homework and the risk is reduced.