Asking about the state of the local economy
in 2006, or the outlook for 2007, of somebody who spends
most of his time assisting the rescue of businesses from
failure, is likely to produce a rather depressing response.
It has certainly been a very tricky one for businesses in
general – maybe not so for those in construction or
the better parts of retail, but for the rest it’s been
very challenging, requiring all management skills working
at optimum levels – itself a balancing act to ensure
products and services meet market expectations in quality
and price, motivating staff, managing the supply chain and
containing costs. At the same time investing for the future
and keeping an eye on competitors - wherever in the world
they are located!
A recent survey showed that the average business proprietor
spends 28 hours a month managing the red tape that showers
down from on high, so is it any wonder that companies need
my assistance at times like this?
The problem is that most of the ‘regulation makers’ seem
to underestimate the worth of small businesses to the economy.
They seem to forget that ‘big business’ has shed
1.5 million or so jobs in the past five years and it’s
the smaller business that’s been picking up the slack.
It’s the smaller business that accounts for 60% of
commercial innovations, 50% of GDP, and that they employ
58% of the private workforce. As a consequence, laws are
written for big businesses and small firms get the short
straw when new legislation is passed.
So in the small firm, without a legal or HR department, the
proprietor has to take his eye off the ball 4 days a month
to work for Whitehall and cope with the 4700 or so new laws
and regulations that have been put in place over the past
10 years.
So what’s the answer – plans to reduce red tape
by 25%, announced by the Government at a recent CBI Conference
sound good, but unless 25% or more of the bureaucrats that
make them are removed, we will see little change in 2007.
But maybe this is where your accountant or business support
adviser can assist you, to find efficiencies to free up your
time to enable you to manage the business, as well as the
paper, and find you some spare time to think about the long
term, rather than muddle in the short term.
But regulations are not the only matters that interrupt the
running of a business – the growth of the Internet
and the effects of globalisation are now really starting
to bite on those companies that haven’t moved with
the times and embraced the new trading world. The retail
price index is held down by the availability of quality products,
yet cheap, from China and India and unless you are adding
value to the products and services you produce, you might
find the coming years more difficult than they may be at
present.
So 2007 looks like being another really challenging year
for local business – and I haven’t touched on
interest rates, the US dollar rate, greenhouse taxes, congestion
charges, corporation tax, the price of oil, pressure on consumer
spending, house mortgage rates, pension problems, the balance
of payments, a change of prime minister………..
So visit your accountant and allow him to help you draw
up your business plans, or speak to me if you want some
help
with collecting your debts, finding finance for expansion
or some help in reviewing your financial processes. Together
we may be able to assist you to expand or survive in these
increasingly difficult times.
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