As well as the issues of cultural and language differences, there are also challenges of positioning yourself successfully among competitors and marketing your brand so that it stands out. However, the main issue that you will have to address is that of your budget. It might be easier than ever to expand your business reach, but that doesn't mean that it comes without costs. Knowing the cost of international expansion makes it easier to get right, and keeps your business safer. If you're considering international expansion, remember to factor in the following expenses.
The Budget Big Three
There are going to be many costs to take into account, but the big three should be your priority. Make sure that you understand:
Take the time to understand how the big three work in your new geographies and your financial planning will be more realistic and much healthier. Never assume that everything is the same from country to country. In some nations, costs will even vary by municipality, so you’re going to need to dedicate some time to some serious and in-depth financial planning.
[ymal]
Physical Requirements
While it is possible to start selling your product around the world from your existing office, many countries will require you to have a physical outlet in their country. Knowing the local laws and getting your premises organised before you even start to sell is essential. Renting a property can be a big cost so you need to know if it’s needed. You will also need to decide whether you’re going to hire local workers to run your international branch. That will mean knowing the laws regarding wages and working hours. Look for help from those that can assist you. Companies like INS Global can make sure that you have got your budgeting right when it comes to paying the right minimum wage in China, which can be made very complex very quickly due to different municipalities having different minimum wages. Always find people, services, and resources on the ground and you’ll make it easier to leverage your position in a new market.
Your Exit Plan
One of the main cost considerations that many first-time entrepreneurs overlook is the cost of closure. Not every new business expansion is going to be a success, and it’s not good practise to simply pack up and head elsewhere. A budgeted exit plan is essential, even if it’s something that you end up never needing. You might find in some countries that closing a business is a lot more expensive than opening one, so your research is going to be essential. The last thing that you want is to lose more money than expected through the exit process. That can affect your already established brand security at home, and that’s an unnecessary risk that can be avoided with some simple foresight.
From e-commerce companies that are working from a home office to mega-corporations extending their reach further than ever, accessing the global audience has never been easier. However, as with any business growth, there are inherent risks. Budget is going to be a major factor in terms of your success, so make sure that your research is robust and that you have the finances needed to cover every aspect of your predicted expenses. Get your bottom line right and your international growth will be safer, more natural, and more profitable.
The analysis suggests that businesses typically agree 45-day payment terms from completion of work or delivery of goods. Despite this, almost two-fifths (39%) of invoices issued in 2019 (worth over £34b) were paid late, an improvement on 2018 when 43% of invoices were paid late. However, the number of days an invoice was paid late in 2019 has doubled to 23 days from 12 days in 2018. Invoices paid late were typically larger in value (£34,286) than those paid on time (£24,624).
Long payment vs Late payment
There is a distinct difference between these terms. Long payment terms refer to the time contractually agreed between parties when invoices will be settled for goods and services provided. Whilst sometimes lengthy, they are a reality of doing business. Businesses can plan to cover these cash flow gaps and manage their working capital using either cash reserves or finance tools like invoice finance. Late payment refers to the additional time taken to settle invoices, outside of those contractually agreed at the point of purchase. This is an unknown and unexpected element which can significantly impact cash flow, business plans and even in some cases paying staff or creditors.
Bilal Mahmood, External Relations Director at MarketFinance, commented: “It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long as in 2018, up from 12 days to 23 days. Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency. Separate research we’ve conducted highlighted that 87% of businesses are prevented from taking on more orders because of the cashflow constraint owing to late payments. Overall it seems who you are doing business with and where they are based is important to know for a small business if they need to forecast cashflow”.
“Government measures such as the Prompt Payment Code and Duty To Report have helped create awareness but need more bite. Until this happens, there are ways for SMEs to fight back against the negative impact of late payments, from having frank discussions with debtors that continuously fail to adhere to agreed payment terms, to imposing sanctions on those debtors, or seeking out invoice finance facilities to bridge the gap.”
Sectors
Professional and legal services businesses suffered the most with late payment in 2019. Seven in ten (70%) of invoices were paid late, up from 30% in 2018. Manufacturers (57%), retailers (49%) and creative industries businesses were also heavily impacted by late payment of invoices. Interestingly, late payment practices improved for companies working in the utilities and energy sector with only a third (34% of invoices being paid late in 2019 compared to two-thirds (66%) in 2018.
Regions
The number of invoices paid late to companies by region was fairly evenly split. Notably, businesses based in the South East (56%) and Northern Ireland (55%) had the highest number of invoices paid late in 2019 and late payment practices worsened from the previous year.
The biggest improvements 2018 vs 2019 in late payment practices were in North West (63% vs 37%), North East (60% vs 40%), Scotland (62% vs 38%) and the South West (61% vs 39%). Additionally, businesses in the North East (25 days vs 11 days) and South West (33 days vs 10 days) had more than halved the number of days an invoice was paid late.
Countries
The analysis looked at invoices sent to 47 countries by UK businesses. US companies were the worst late payers, taking an extra 51 days to settle invoices from agreed terms in 2019. German firms took a further 32 days and businesses in China took an additional 10 days. Interestingly, French, Spanish and Italian businesses halved the number of days they paid late from 24 days late in 2018 to 12 days in 2019.
Bilal Mahmood added: “SMEs owners have come to expect long payment terms but late payments are inexcusable. For every day an invoice is late, it’s more time spent chasing payment. This means less time for business owners to focus on growing their business, coming up with innovative ideas and hiring more people, or just paying their staff and bills. Things need to change quickly.”
“We want the UK to be the best place in the world to start and grow a business, but the UK’s small-to-medium-sized businesses are hampered by overdue payments. Such unfair payment practices impact a business’ ability to invest in growth and have no place in an economy that works for everyone.”
Challenger banks such as Monzo, Starling and Revolut are built to scale, evolve and improve their offerings easily and quickly, and are doing great extending their customer base. According to Ian Bradbury, CTO for Financial Services at Fujitsu UK & Ireland, they are also now beginning to slowly move towards becoming a full service bank for their customers, as well as branching out their offerings to SMEs.
The way banks make their money is by keeping administration costs low, managing the lending risk and investing wisely to receive good returns. Other income avenues include offering “added-value” services, such as payments, for which they take a handling fee (particularly useful when market returns are under performing, for example in the case of low interest rates).
Four digital-led factors to disrupt banking
Four interrelated digital-led factors are fundamentally transforming traditional financial services: new distribution models; cloud native computing; data enrichment in a hyper-connected world; and exponential increase in the rate of change. These four factors create new ways for banks to operate, to do business and to enhance their offerings for consumers - but they have not fundamentally changed their money-driven banking business model – yet!
Regulators have recognised the value that can be bought by these four factors to banking customers, and have sought ways to encourage the uptake of them – often also encouraging new digital-native entrants into the marketplace. Regulators have also sought to ensure that high-margin services can be “unbundled’, allowing new competition to compete in these areas.
In theory, it should not be difficult for banks to not only survive the arrival of these four digital-led factors – in fact with their financial backing, existing customer base, technology assets and regulatory status they should be able to thrive in this competitive landscape.
This is especially true as other potential non-banking competitors have to overcome complex regulatory challenges – besides not being set up to offer the basic banking business model.
Legacy problems
In reality, traditional banks are struggling to keep up with how the market is moving. The reason for this can be summarised in one word – legacy. Legacy culture, legacy skills, legacy controls, legacy distribution models, legacy systems.
Slowly, this is changing, but until these legacy bottlenecks are removed, banks will struggle to keep up. Those that do not move quickly enough to deal with this challenge are unlikely to survive.
Assuming that traditional banks can overcome these legacy challenges and become the truly agile, low-cost, open-driven, customer-obsessed, data-powered, highly automated businesses promised by the digital-native challenger banks then their traditional banking business model may well also change.
The banks of the future
Banks currently operate a fairly simple two-sided marketplace – they take money from depositors and give it out to borrowers, generating trust in the process. But what they really do is provide a two-sided marketplace for ‘value’ – which is currently focused on money.
Digital transformation potentially allows for other ways to exploit this value-based marketplace, with the data-insights and enrichment coupled with new distribution models creating potentially new services.
Besides this, the notion of value is changing in the digital age, with areas such as data, identity, reputation, authenticity and even perhaps social purpose falling within it. These types of values can potentially be digitally stored, secured, exchanged and exploited in a marketplace - just like money. Maybe for example the banks of the future will become the custodians of your valuable data, both protecting it and helping you generate benefits from it.
So, how will the 2019 general election affect business? We take a look at the predictions and what they could mean for commerce.
It’s an election that prime minister Boris Johnson had been chasing for weeks in an attempt to break the Brexit deadlock, but the vote has come sooner than expected for business leaders and the public.
Pundits are calling it a once-in-a-lifetime ‘Brexit election’ and, given those stakes, the impact on British business could be seismic.
Navigating major change from inside the C-suite is rarely a smooth ride. It means creating a backup plan for your backup plan, then running the numbers for each.
Fortunately, corporate speakers and expert journalists were on-hand to offer their insight just as the possibility of an election descended on the City of London at a night aptly called ‘Preparing for Unprecedented Change’.
At the event, former BBC business correspondent Declan Curry stressed that Brexit is just one of the big changes Britain could face in the fallout from the election.
The business and economics speaker said executive teams are also busy making plans for the possibility of a Corbyn-led Labour government.
“Businesses are hearing the commentary that we’ve had since 2017 – that polls indicate that he has absolutely no chance whatsoever of being the next prime minister,” he told the crowd of corporate guests in Barbican, central London.
“But then they remember the polls running up to the Brexit vote were wrong, the polls running up to the 2017 election were wrong, and in 2015 they weren’t exactly models of prediction either.
“And business leaders like to be prepared,” he adds. “So in most major companies there will be someone somewhere – an executive in an office with the door closed – drawing up the plans for ‘what if’.
“What if John McDonnell is the chancellor, what if the idea of having trade union representatives forcibly on boards is enacted? What if there are bans and restrictions on bonuses?”
As we speak, many businesses are preparing for this possibility just as they are preparing for Brexit. Declan added: “This is being mapped out as a theoretical enterprise.”
The event was organised by international speaker bureau Speakers Corner, whose 7500-strong portfolio of orators and experts have already been called on many times to help businesses navigate the uncertainty of Brexit.
In fact, Declan Curry revealed he himself takes professional guidance on the levels of Brexit fatigue in a given audience before taking to the stage.
He was also keen to point out change can bring opportunities as well as risk. Near the Irish border in Donegal, people are “excited for the return of the ancient art of smuggling,” he joked.
[ymal]
“Brexit will throw up opportunities, too,” said Declan, pointing to law firms currently profiting from all the uncertainty. The former On the Money radio show host said economies are suffering and pondered the idea that another financial crash could be looming – something that could magnify the risk to British business.
This speculation comes as both major parties enter a public spending bidding war that the Institute of Fiscal Studies has said may be undeliverable.
General elections often make markets unstable, but the combined uncertainty around Brexit and the UK’s economic direction is heightening the impact on shares – especially for companies like BT, which could even be partly nationalised under Labour plans.
Still, some business leaders see the vote as an imperfect path to preventing the damage of a hard Brexit. Sonia Sodha, chief leader writer at the Observer, also spoke at the Knowledge Guild event – and she is sympathetic to this view.
“You can see a path to a Labour-led coalition government with Lib Dem and SNP support if Boris Johnson loses a significant number of seats,” she said, but feels an election is not the best way to deal with the Brexit question.
Business owners and C-suite executives have expressed concerns about the risks of a chaotic Brexit since 2016 – and despite continued delays, the risk of no deal remains. The implications could include increased taxes on imports and exports, supply chain delays and staffing supply problems.
“We are going to be talking about Brexit for years to come, whichever outcome,” Sonia told the crowd of central London executives.
For executives concerned with risk management, the turbulence runs in many directions. The only certainty is the election result will spark significant change – whatever the result.
Using Single Sign On (SSO) technology, Xero users will have direct access to NatWest’s Rapid Cash service, which provides businesses with a flexible line of credit to cover unpaid invoices for up to £500,000, offering greater flexibility and a fast solution to temporary cash flow difficulties. Rapid Cash will be the first working capital product to have this level of integration with Xero in the UK.
The move is part of the bank’s intention to introduce broader connectivity between its suite of digital banking services, and other major providers in the business banking sector.
New Zealand based tech company Xero provide cloud-based accountancy software targeted at small and medium sized businesses. Born-in-the-cloud, Xero is an easy-to-use platform for small businesses and their advisors around the world. In the UK, Xero provides 536,000 businesses with connections to a thriving ecosystem of 800+ third-party apps and 200+ connections to banks and financial service providers.
NatWest launches the new feature today having also introduced a similar level of functionality with its accountancy software business FreeAgent several months ago, which over 100,000 UK sole trader and small SME customers now use. The bank acquired the Edinburgh based fintech in 2018, which continues to operate as an operationally independent entity.
Andy Ellis, Head of NatWest Ventures, said: “We’re pleased to be able to begin offering our innovative new services, such as Rapid Cash, to users of Xero from today. Businesses increasingly tell us that they want simple, easy access to our products and services. By offering our solutions directly through the platforms that customers use to manage their business day to day, we’re making it easier for them to get the support they need - whether that’s funding, products or our expert advice.’
Edward Berks, Director of Platform Business, UK & EMEA, Xero, said: "Small businesses have historically fallen behind larger firms in accessing the best financial services. This means they often struggle to access capital which can threaten their very existence. So it's great to see the playing field level out through innovations such as NatWest Rapid Cash."
NatWest is a sponsor at this year’s Xerocon event, taking place at the London ExCel between 12-14 November, where the bank will be exhibiting its key digital ventures with attendees.
It is forecasted that mobile banking is set to be more popular than visiting a high street bank branch within two years. And as the banking industry continues its digital journey, Mark Grainger, VP Europe at Engage Hub, says consumers are coming to expect more control over their data, greater convenience, and “anytime, anywhere” accessibility.
Mobile-first consumers
So far, most banks worldwide have handled the mobile era in exactly the same way, simply shrinking down traditional bank accounts and putting them on a smartphone screen without offering real innovation or engagement.
But simply pouring millions into innovation hubs and piecemeal digitisation strategies isn’t going to deliver the kind of results that will win over those tempted by the challenger banks. Traditional banks need to shift gears and use the valuable information they already have to provide customers with seamless interactions across different channels.
At the same time, banks need to understand that the digital banking revolution is more than a mobile app. It’s about creating an entire experience. The implications of failing to facilitate a seamless cross-channel customer experience – one that lives up to growing customer expectations – is huge. Today, consumers have more choice than ever before, thanks to the rise of fintech start-ups and digital-only banks, and if they do not get the level of service they’ve come to expect, they will not hesitate to take their business elsewhere.
Subscription service model
Using a service model patterned after Amazon Prime or Netflix may seem odd to many retail banks, but challenger banks are already experimenting. Would consumers pay a subscription to get the same service they do with Amazon and Netflix? The answer is yes.
Revolut is already showing itself as a front runner in subscription-based banking. The challenger provides a ‘freemium’ model, which gives users a free UK current account and a free euro IBAN account that offers no fees on exchanging in 24 currencies, up to £5,000 a month. Revolut also provides monthly subscription plans with higher thresholds for no fees, as well as instant access to crypto-currencies, cash back, travel insurance, free medical insurance abroad, airport lounge access and priority support.
Research shows that in the UK 57% of people would be willing to pay an extra monthly fee for additional services from their banks. Most consumers – 45% – would like additional media services such as Netflix and Amazon while 40% prefer earned cashback and 37% would pay for overdraft facilities.
Considering that at present, 72% of customers don’t pay any monthly fees to their banks it’s fair to say that there is a great potential for financial institutions to leverage these services and elevate their game when it comes to competing against challenger banks and unconventional financial services.
[ymal]
Trust and value
Furthermore, traditional banks have a crucial asset compared to challenger financial institutions, and that is trust. Traditional banks have a much longer and seemingly more robust security record.
The paradox is that many people trust their primary financial provider but distrust the financial services industry overall. Therefore, banks that want to persuade their customers to adopt new models and pay a potential monthly fee have to prove that they have customers’ interest at heart.
One way to achieve this is through transparency. The financial services industry still lags behind other sectors when it comes to transparent policies, costs and customer data. This needs to change and they need to show that they are keeping pace with the market trends and customer expectations.
Another crucial aspect banks need to keep in mind when it comes to monthly subscriptions is the added value they would bring to customers. If they agree to additional costs, consumers will also expect extra benefits and not just the same things they used to get for free. Without additional value added, it will seem that banks are trying to simply make some extra money thus confirming customers’ distrust in financial institutions.
If they agree to additional costs, consumers will also expect extra benefits and not just the same things they used to get for free.
Bank of America, for example, learnt this lesson the hard way when they wanted to charge their customers a $5 fee for using their debit cards for purchases. The backlash was swift and strong, and the bank had to cancel the plan within six weeks.
To avoid such situations, banks need to focus on their customers’ financial health and create personalised and holistic value propositions that will provide a competitive edge against challenger banks and convince millennials that they can provide safe and innovative solutions for life’s complex challenges.
By understanding these strategies and embracing the changes in consumer buying behaviours, financial institutions will be able to create new ways to generate recurring value for their customers and new sources of predictable income.
Key skills
However, in order to transform their approach to digital transformation and subscription models banks will also need the right skills and capabilities.
A new CBI/TCS report highlights the UK’s rapidly accelerating digital talent gap as new technologies transform the way we live and work. Currently, the UK is losing out on £63bn a year as companies struggle to find people with digital skills. Areas of banking that need to be a focus for investment include the use of AI in customer profiling, money laundering detection and improving customer services. All of these investments require emerging technology to be implemented, and employees with the skills to manage it. Banks will need to implement training programmes, smart hiring strategies, and strategic digital transformation programmes to attract tech talent and implement a customer experience to rival challenger banks.
And whilst providing subscription services to their customers might require considerable resources and a significant shift in strategy and policies, engaging the new generation of digital-first customers is paramount if traditional banks want to remain relevant and fend off challenger financial institutions. Harnessing this opportunity will provide a critical competitive edge, inspire loyalty and make customers feel valued.
Many industries have already adopted this system and have reaped significant benefits already. It’s high time for traditional banks to challenge the current status quo as well and reap the benefits of a subscription model.
In its latest report Late Payments: The Cost to Business and Our Health, Hitachi Capital UK has investigated the mental health impact of late payments on the UK’s SMEs and freelancers. The research finds that there is an urgent need for action to alleviate the emotional and financial burden of the issue, acknowledged by Government as an inhibitor to the growth of the UK economy.
From a sample of 1,000 SMEs and freelancers based in the UK, a sizeable 11% of surveyed freelancers have been diagnosed with a clinical condition due to clients failing to pay invoices on time. This figure equates to over 200,000 freelance employees in the UK₂, with the most common conditions anxiety (61%), stress (45%) insomnia (41%) and depression (27%).
In addition to highlighting the harmful effects of late payments, Hitachi Capital UK’s research outlines the prevalence of late-paying clients for freelance businesses. Two-thirds (65%) of respondents have experienced at least one instance where a client has failed to pay within an agreed payment period.
The research has exposed the drain of late payments on productivity and resource among freelancers, who are now spending an average of 77 minutes each day chasing clients. Almost half (49%) of freelancers are spending 1-4 hours each day chasing late payments, losing valuable time to grow their business and service existing customers.
The majority of freelancers surveyed were unfamiliar with the preventative measures available to them, with over a third (35%) unaware that interest can be claimed on late payments from clients. Similarly, only 15% of freelancers are aware that late paying clients can be taken to the Small Claims Court.
Robert Gordon, CEO of Hitachi Capital UK, said: “The current focus on Brexit has detracted from some of the most pressing issues affecting SMEs. It is high time that we hold poor payers to account for failing to pay on time and in full, acknowledging the effect that cash flow shortages can have on the wider health of the economy.”
Hitachi Capital UK’s extensive research has already found that that late payments are costing almost a third of SMEs at least £10,000 a year; with 40% of SMEs having used their own money to close cash flow gaps within their business. An overwhelming majority of these respondents (80%) invested their own savings to cover operational costs and keep their businesses afloat.
Commenting on the findings, Simon Blake, Chief Executive, Mental Health First Aid England, added: “Being self-employed or working in an SME can present a number of challenges to our health and wellbeing - including the pressure of managing a consistent cash flow. The link between late payments and mental health issues is a worrying trend and requires quick action to ensure that people are not left to suffer in silence.
“This is one of the many reasons why we are working towards a future where people in every type of community have the training and resources to support their own and others’ mental health. People from all walks of life - whether working as freelancers, in SMEs or in larger businesses – should be empowered to seek and offer support if they are struggling with their mental health.”
It's best to look for other sources that can help you reach your business goals, so take a look below at some of the alternative methods of fundraising you can do.
Consider the Assistance from Angel Investors
These retired business gurus or successful entrepreneurs can be your ticket to salvation when you need funding. They are people who take a keen interest in your work and activities, making them huge supporters who want you to succeed and grow. Also, they can offer their advice and business expertise to make you a better player in the market.
Not your Average Loan
When people think about loans, they consider personal or business ones, but no one would ever expect to get funding from your inheritance money. Some owners have a lot of money coming in but the probate process gets delayed and drags. That's why loans for heirs can be very appealing when you want quick funding for your startup or company. You get a considerable amount of the money entitled to you, and you can pay the debt off when the courts finally issue your money.
Have You Thought About Crowdfunding?
This is a good way to utilize the digital world to your benefit. There are several reputable platforms with different investors that can provide you with the money you need if your business activities pique their interest. Countless investors are on the lookout for decent companies that offer something special and useful to the community, so investing in your company can be beneficial for them, too.
So, if you are looking for such crowdfunding, arrange a Meeting of investors and venture capitalists at a club. This will be really fruitful for you
You Could Go for Factoring and Invoice Advances
This can be very handy when you find a provider that can front you some money on the invoices that you’ve already billed out; it's good for companies that constantly provide products and services to customers, and you will pay it back once your customers have paid the bill in full. It's a simple method that keeps your business running and projects operating without waiting for long periods of time for consumers to pay up.
Consider CDFI Assistance When Nothing Else Works
This stands for Community Development Finance Institutes. They are private financial organizations that deliver affordable lending options, making it very easy and advantageous for many businesses that are in need of quick funding to save them from tight situations. Many businesses don't get a chance to thrive or grow because of restricted money-raising methods, so this can be the answer to their capital needs to fund their business.
Managing your finances can be a little tricky, but with the right mindset and the willingness to find better and reliable sources for funding, you can make a huge difference in your company's success. You can't just sit there and wait for your company to crumble; choose the right path for you and get the best funding that suits your needs and goals.
Below, Michael delves into business loans and the most important things you need to be mindful of when applying for one.
When you make the decision to apply for a business loan, the first thing you will notice is the vast amount of choice available to you. This can be extremely confusing if you are not sure what type of loan is suitable for you and your business. Thankfully internet comparison sites can offer a fast and simple process to compare loans and match them to your specific criteria.
Before you begin you must decide:
- What is the purpose of the loan?
- The amount you would like to borrow.
- The period of time you can comfortably pay it back.
- What annual percentage rate (APR) are you comfortable with?
- That you have taken into account any additional fees.
Once you have nailed down these specifics, it is time to start looking.
Reputation
Taking out a loan is a big commitment. Make sure you are borrowing from a reputable lender. A background check is a good way to start. You can typically find customer reviews online that should help inform your decision. Obviously, the best and most efficient method is to use a respected online comparison site to ensure the hard work is done for you.
Clear and simple language
Applying for a loan is daunting enough given the huge number of lenders offering finance at different rates. Then you have to make sure you pick an appropriate payment schedule. Once this is all done, then you will have to check the terms and conditions to make sure you haven’t overlooked something that might come back to haunt you. It is the duty of a loan provider to make sure the information you receive is clear and accessible. If you don’t understand something, make sure you ask for clarification.
Trouble-free payment
Different loan providers offer different payment schedules and lending terms. Traditional loans are paid over a set period of time on a daily, weekly or monthly basis. However, there are now a variety of lending options that are more tailored to the specific needs of borrowers. Merchant cash advances, for example, are calculated as a percentage of a business’s daily card taking and automatically repaid. Invoice finance is another form of lending that can quickly increase business cash flow. A lender can pay you a percentage of the value of your business’ invoices upfront, in return for a cut of their worth.
Hidden charges
Look out for hidden charges such as early, late payment or even processing fees. If you are not careful these can substantially add to the cost of your loan repayments. If a fee was not explained to you by your lender, make sure you contact them to challenge the charges via the Consumer Rights Act. This legislation protects your rights and makes it easier to contest hidden fees and charges. If this fails you can always seek redress with the Financial Ombudsman Service (FOS).
To find out more, visit: https://www.quotegoat.com/business-finance/
It’s been an interesting three years since the 2016 referendum, with the next ten years promising more of the same. Below, Erica evaluates Boris Johnson’s Withdrawal Bill and its implications for UK businesses as well as the society we live in.
1. Diversity of thought is key to long-term success moving ahead
Narrow bands of interest and self-interest don’t create a vibrant society, nor a thriving business. Diversity has to include different thinkers, different ethnicities, ages, gender, problem solvers. Those companies, authorities and organisations who can’t embrace and harness this will become moribund. And rightly so.
2. Digital and real-world complementarity is critical
At the moment we have no idea what any post-Brexit trade deals will look like. Developing aligned business models and associated revenue streams is vital. With entertainment, retail and business services moving increasingly online, reducing trading frictions by evolving new digital services and products from real-world trade is vital. And for those only online, there is a rich opportunity to consider how an IRL leisure or experiential offering can enhance your bottom line. After all, there is space in abundance available in every single UK high street.
3. Environmental responsibility – get with the programme
In the current Withdrawal Bill, climate and environmental alignment with the EU has been shifted to future trade agreements. That might be fine to discuss then, but your clients and customers will be expecting it from you now. This is not an option.
Responsibility has to be taken at every step in the commercial process and, increasingly, will be an influencing factor in every personal purchasing decision. Get your supply chain to sign up to sustainability/ethical mandates now to gain early mover advantages and positioning to enable trade within even the strictest global environmental trade frameworks. Sustainability should be as important to your business and as measurable as profitability.
[ymal]
Sabzproperty has a highly skilled technical team of professionals at work with a strong desire to ensure client satisfaction through excellent service delivery. We have a vibrant and engaging property market which offers a large property inventory accrued by competent property agents and developers from different neighborhoods. This has attracted teaming property audience over the years and has birthed the responsive value rewarding network we have today.
4. Uncertainty is the new certainty
Nothing is certain over the next few weeks… who will be in power? The next few months… in or out?
So you need to understand what deep uncertainty means for your business, your customers and your own personal circumstances. Be prepared to pivot, to take advantage of short term opportunities, to revel in the unexpected. What could this uncertainty allow you to unlock in your relationship with your past/present clients? Where will it allow you to find future clients? What could you develop with or for your competitors? And where might you find new buyers in differing marketplaces you had not looked to before?
And if you are not in the D2C world – look out of the window to ask what you can sell to that person walking past? Thinking the unthinkable has to be part of your new strategy.
5. Tough trading breeds new opportunities
The British are inventive people. Everyone who lives in this wayward nation contributes to its determinedly individualistic approach. We lead the world in creativity – in fact it makes up £101.5bn GVA, the second-highest sector in the economy. In times of economic retrenchment and difficulties that may lie ahead, there will be the potential for green shoots to force their way through, for businesses to grow and develop in unlikely sectors and unexpected ways.
In the 2007/8 recession, people delayed big-ticket purchases and cut back on eating out. This saw a rise in small spends - cupcakes, lip-sticks, feel-good treats. Home baking and entertainment surged with businesses that could supply this ‘batten down the hatches’ mood benefitting. The emergence of shows like The Great British Bake-Off first screened in 2010 after 18 months in development and production captured this back-to-basics mood. Now a highly profitable global tv format sold across many countries, it illustrates how there are opportunities in even the most trying economic circumstances.
As the next few weeks and months unfold, focus on these five points in both your business and personal dealings. Keep your mind alive to opportunities, inventive thinking and potential pivots. Living with uncertainty is something we’re all getting used to within our own lives, the UK economy and planet as a whole. So embrace it and turn it into positive actions build a commercially inventive road ahead.
About Erica Wolfe-Murray:
Cited by Forbes.com as ‘a leading innovation and growth expert’ Erica Wolfe-Murray runs innovation studio, Lola Media Ltd. With creative head and FD experience, she focuses on auditing intellectual assets/IP to evolve new products & services from a company’s existing business.
She is also the author of ‘Simple Tips, Smart Ideas : Build a Bigger, Better Business’ aimed at the UK’s 10m+ micro business & freelance sector to help build greater commercial resilience in this dynamic but often ignored part of the economy.
Part of the reason for this is a series of falsehoods which have taken root in the collective conscience of investors, including the belief that responsible investing somehow underperforms compared to alternative investment styles. Another popular one is that there is simply no place for being responsible when it comes to investing.
However, the rise of companies such as Beyond Meat, which are displaying clear signs of success, are helping to change some of these ingrained biases, according to Ryan Smith, head of ESG research at Kames Capital.
“There have been many theories over the last few decades about responsible investing and how it fails to offer as good an opportunity broadly to investors,” he said. “However, the facts are very different. Companies which do not give any consideration to their responsibilities to everyone beyond their shareholders are increasingly in the spotlight for the wrong reasons.
“Nonetheless, many myths still abound about responsible investing which must be dispelled.”
Below Smith looks at some of the most common myths around responsible investing, and reveals the reality of the situation behind them.
Myth 1: There is no place for ethics in investment
"Gordon Gekko didn’t do lunch and wasn’t strong on ethics."
Gordon (as they say) would sell his granny. In contrast, we think there is value in judging a company on the sustainability of its products or services. Industries or companies that perform no social function are inherently unsustainable. They impose costs on society and ultimately, it is highly probable that such activity will simply be regulated out of existence. The sustainability of a company’s products or services is therefore vital to its long-term strategic success. Strategic positioning and vision can be a long-term tailwind or headwind. An unsustainable product (e.g. coal) is a huge strategic headache for any management team, just as a sustainable one should create a tailwind of opportunities.
Myth 2: Thinking sustainably is a downside risk tool only
"It’s all about avoiding controversies and disasters."
True. Thinking about sustainability, combined with other risk metrics can provide investors with powerful downside protection. However, risk is a backward-looking measure. Thinking sustainably promotes a longterm focus, helps us to avoid short-term distractions and can also be useful for identifying sources of competitive advantage. In the Kames ethical and sustainable strategies, we look for growth stock investment opportunities and typically find that these disruptive, innovative growth companies are more likely to provide responsive investment opportunities and be willing to engage and improve.
Myth 3: Just invest in the best
"There are an increasing number of ESG products being launched, many of which use off-the-shelf third-party ESG ratings to construct their portfolios, or indices."
In most instances, they adopt a ‘best-in-class’ approach; because the best ESG companies must be the best investment right? Maybe, but in our experience, it’s often a bit more nuanced. ‘Best-in-class stocks’ according to these ratings also tend to be large-cap, well-known and well researched, and hence provide less opportunity for mispricing opportunity to capture alpha. Which is fine, because our focus is on the small and mid-cap space, where we believe better investment opportunities often occur. And to provide our clients with the breadth of negative screens that they seek, our ethical funds are always actively managed. Then, once invested, we take our stewardship responsibilities very seriously; meeting with management, challenging them and if we need to, selling our position.
Myth 4: Profits vs. principles
"Investing responsibly means giving up returns."
Actually, academic studies increasingly disprove this. Empirical evidence supports the premise that thinking carefully about sustainability as part of an investment process can enhance investment returns. Ultimately, investing is about employing an effective set of tools consistently in order to tip the odds in your favour. Sustainability analysis is one of these tools and it fills a key role in our toolbox, but it’s one which many investors still don’t consciously utilise.
It’s not just UK residents that would be impacted. While experts predict that a full-blown recession could be on the cards, it’s also believed that it will negatively influence various regions within the EU, with Ireland, the Netherlands, Belgium, Germany, and France most likely to feel the consequences. Indeed, even countries as far afield as America could be adversely impacted.
This means that it makes sense to have a plan in place – preferably, one that includes a financial safety net to combat any uncertainty or financial difficulties that come on the back of the UK’s exit from the EU.
With this in mind, here are a few handy tips to turn you into a post-Brexit super saver.
Draw up a preliminary budget
Budgeting is considered essential to good money management, but not everyone puts this theory into practice. There are very few of us who cut our costs as much as we feasibly could, but with the possibility of a no-deal Brexit looming, you’ll want to not only reduce your immediate expenditure, but identify any additional areas where you could decrease your outlay even further should this become necessary. With this in mind, we recommend that you spend some time drawing up a table of your incomings and outgoings, so you can work out what you could go without well in advance of it becoming a necessity.
Keep an eye out for more economical alternatives
Although UK PM Boris Johnson remains adamant that the UK will leave the European Union before the end of the month, the reality of Brexit remains little more than academic, but it’s unlikely to stay this way forever. Recession is a very real possibility, so even if you don’t want to go the whole hog immediately, you should already be looking to make small savings where you can. This doesn’t mean going without entirely; rather, it means swapping your Heinz baked beans for own-brand alternatives, and visiting comparison sites; for everything from travel, utility bills and iGaming. For example, in regards to online casinos, with a generous multistep welcome package, Dunder is a solid choice, giving you the chance to play the games you enjoy without breaking the bank, or sites like Compare the Market for insurance, and Trivago for travel.
Review your interest rates
One of the big difficulties with Brexit is that nobody can truly predict how it will affect the economy. This means that interest rates could do almost anything, either remaining low if the financial landscape worsens or rising along with inflation. However, there is one way to know for certain what your future spending on credit products will look like, and that’s by fixing your interest rates. Experts suggest that to safeguard yourself against what’s ahead, your best bets are to either switch to a lower rate or consolidate your debt so you can accurately plan ahead.
Isn’t it time you started making some changes?
