insight spring/summer 2012

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News and comment from HW Fisher & Company

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  • Spring/Summer 2012

    Building the framework for growth top business tips for tough times

    Post Budget round-up will you be caught out?

    Don't let your business suffer from Olympic Fever a guide to managing the impact

    InsightNews and comment from HW Fisher & Company

  • But it can be done and is being doneby many businesses in a wide varietyof sectors. Here we look at what ittakes to survive in these turbulenteconomic times, with some top tips tosupport you along the way.

    Current climate

    It is tempting to see the almost dailybarrage of bad economic headlines asan omen of impending financialapocalypse. Certainly there is clearevidence that the economy is doingmore than simply struggling. GDPgrowth was stagnant for much of lastyear, and even shrank in the finalquarter of 2011. And both businessand consumer confidence remain atrock bottom.

    A January survey of senior economistspredictions for 2012 by the FinancialTimes read like the minutes of adoomsayers convention. Even theusually upbeat governor of the Bankof England, Sir Mervyn King, haswarned that the economy is likely tozig-zag this year.

    Despite the rate of inflation sliding,the high cost of living is still eatinginto peoples disposable incomes. Andunemployment is steadily creeping upas businesses fold and the publicsector cuts bite.

    In the face of such difficult economicheadwinds, many businesses arestruggling to make ends meet. Eventhe best run businesses can find ithard to maintain a steady cashflow.

    Quality customer service

    We work with entrepreneurs and longestablished businesses and whatever acompanys plans for growth, if itscustomers experience tails off, so willthe profits!

    The tough economic climate meansthat competition is more intense thanever, and if a client feels let down bythe service received, its the easiestthing in the world for them to switchto a rival whos already offering themincentives to win their business.

    Following a number of commercialchallenges a few years ago, thecompany was struggling to survive butthanks to quick and clear advice fromHW Fisher our business is nowthriving. They advised us and helpedimplement radical change which hasensured our business has gone from apoint of weakness to one of strength.Having a mobile, alert and decisiveadviser with a clear head with all thestakeholders interests in mind madeall the difference. Since then we havebeen leaner and more agile, betterprepared to take maximum advantageof opportunities that come our way.3Sixty, Brian Keegan, Managing Director

    Cashflow and funds forgrowth

    In March the Government launchedthe National Loan Guarantee Scheme,a 20 billion initiative to boost lendingto SMEs.

    But the fact remains that bankslending criteria are stricter than ever,and few businesses can rely on bankcredit or overdrafts alone as a meansof ironing out their cashflow peaksand troughs.

    Often a companys cashflowproblems are caused bymismanagement of client payments.Accounts departments can help byinvoicing earlier and agreeingpayment dates up front.

    Alternatively they can realise themoney theyre owed more quickly byselling on their invoices through aninvoice trading website.

    There are alternative sources offunding for SMEs who are looking togrow too. Private, or angel investorsare one source of capital. Otherfirms seek investment throughcrowdfunding pitching tothousands of small investors via the web.

    Listening to your clients

    Another critical piece of advice intimes of economic hardship is neverstop listening to your clients,responding to their concerns andtailoring your company processesaccordingly.

    Building the framework for growth top business tips for tough times

    Businesses today are facing a tough and unforgiving set of economic conditions. With somany companies battling just to stand still, the idea of growing a business in the currentclimate may seem more than a little optimistic.

    2 | Insight

    Even the best run businessescan find it hard to maintaina steady cashflow.

    www.hwfisher.co.uk

  • www.hwfisher.co.uk

    www.hwfisher.co.uk

    Used correctly, this feedback shouldhelp you improve customersatisfaction and identify the aspects ofyour service that your clients do notappreciate or want.

    You must be flexible and responsive,and avoid the temptation toovercomplicate your companyprocesses. If something is not addingvalue to your bottom line or improvingthe customers experience, cut it out.

    Cost control

    Clearly you must also take a long hardlook at your costs, and trim themwhere you can do but withoutdamaging the fabric of your business.

    When times are tough, anything thatis not directly contributing to thebusiness must be called into question.

    But becoming more competitive israrely as simple as just wielding theknife. While streamlining and costsaving are important, there may beareas where you need to spend morein order to increase income.

    Investment in improving your productor processes is seldom money wasted.Ditto a marketing campaign thatdelivers measurably better salesfigures. The greater revenuegenerated should offset the cost andthe extra cash should be reinvested tohelp with future growth.

    Confidence and the willingness to aimhigh are crucial too. While thebusiness environment is tough, it isvital that you stay positive and enjoywhat you do. This is about more thanjust maintaining staff morale. If youlose your own self-belief, its very hardto recover it.

    Any business owner will tell you,running your own business in thesetesting times can be difficult toachieve. Making tough decisions is allpart of the trials and tribulations buthaving an adviser to act as yoursounding board can really make adifference to success or failure. HW Fisher are always available toprovide expert advice which helpedme take those difficult decisions andgave me the confidence an d focus tomove the business forward.Roger Belcher, Director, Countryliner

    Use your contacts

    Never be afraid to ask for adviceeither, or to discuss the challenges youface. Your business contacts may wellhave reserves of knowledge andexperience that you can tap into,simply for the cost of a phone call.You can learn from both theirsuccesses and their mistakes.

    Running a business in a toughenvironment can feel lonely, but thechallenges you face have beenencountered and overcome bycountless others. Talking to someonewho has been through the same millcan be a great source of inspiration.And at the most basic level, a problemshared is a problem halved.

    While these are far from boom times,businesses that concentrate on theircore strengths, keep on top of theircash flow and actively chaseopportunities should be able to boththrive and grow.

    In this issue...

    Building the framework for growth

    Post Budget round-up

    The good, the bad and the pre-pack

    A decade and more of LLPs

    Seeing the light

    Looking to the future

    Being carbon-efficient boosts thebottom line

    HMRC set to GAARd itself against tax avoidance

    Charities scrapbook

    Striking the right balance

    In the spotlight... Liz Barclay

    Kingfisher Collections is launched

    Get the BIRs in!

    Beating down the door to the UK

    Dont let your businesssuffer from Olympic Fever

    Named and shamed

    Underinsured and overchargedconsolidation is key

    Auto-enrolment to create a seismic shift

    News in brief

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    Insight

    Insight | 3

    David Breger, Audit PartnerT 020 7380 4943E dbreger@hwfisher.co.uk

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    Take a long hard look at your costs. Anything unnecessary, CUTIT OUT

    Ensure your service levels remain high - if not higher than ever

    Listen to your customers/clients, so you are offering them exactly what they want

    Investigate your funding options cash is king

    Dont immediately switch off marketing. It is often the one thing that can make a difference in a difficult economy

    Ask for advice from other businesses you know, especially those who have survived hard times before

    Keep on top of cash flow

    Stay focused, stay cheery, stay positive.

    Top tips for tough times

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  • Uncapped reliefs

    It has been suggested that certain taxreliefs, mainly relating to losses, interestrelief and charitable donations are beingabused by overly aggressive packagedschemes. The rules regarding the offsetof trading losses have already beentightened by degrees over recent years in response. The proposal is that from 6 April 2013 the tax saving for thosereliefs not capped by absolute limits willbe restricted. The proposed limit is thegreater of 50,000 or 25% of a personsincome. The charitable sector has beenparticularly vocal in its opposition tothese proposals since the Budget. Theconsultation process beginning in thesummer is likely to see some softening inthis area but it is worth reviewing whatwill not be caught.

    Reliefs which are subject to absolutelimits, such as the annual 50,000 limitfor pension contributions or the1,000,000 for Enterprise InvestmentScheme investments will not be affected.Business losses which are set against theprofits from the same business, either bybeing carried forward against future

    profits or by carrying back will also remainunchanged. It is the uncapped reliefssuch as sideways relief for trading losseswhich are now in the spotlight, togetherwith certain rental losses or gifts of landand quoted shares to charities.

    www.hwfisher.co.uk4 | Insight

    Residential property - The Devil is in the detail

    The key phrase used when introducingthe new rules for Capital Gains Tax (CGT)and Stamp Duty Land Tax (SD