Those moments can [...]]]> Have you ever had that moment where you have be awoken to another persons perspective that previously you had never seen? In that moment you had realised you had be wrong all along, not fundamentally wrong, you just didn’t have the whole picture, perhaps you had been too close to see everything.

Those moments can come in all aspects of life and often then can feel a little painful. Sometimes we can be resistant to changing our opinion and the process can be slow. When we run with the wrong idea or half a picture the cost in business can be high. In fact not being able to step back and look at what’s really happening can be the fundamental reason why small firms stall and eventually fail.

Taking time to look at your business is vital, getting a second opinion or sounding your ideas against a trusted colleague can be the difference between being another small business stat and being a successful leader.

Who should you turn to, well obviously we would suggest an advisory firm such as LimeMinds but we also understand not every challenge you face will warrant the investment of a third party solution. It is vital however that you have a reliable network of friends, family, colleagues and other business owners. Their input can often cost nothing more the investment of time into the relationship but the return could be a vital insight or invaluable idea.

So the moral of this article? 1. Take time out of the day to day grind to really look at your business. 2. Build a trusted network of friends and advisors and 3. Keep Limeminds contact details close to hand.

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Whilst the [...]]]> The recent cold snap in the UK has ground many transport links to a halt, closed hundreds of schools and impacted the normal running of day to day life greatly. If economic times weren’t tough enough already this extended period of snow has delivered another blow to business and in particular small firms.

Whilst the full cost of the impact is to be fully calculated (as it’s still rising), the anecdotal evidence highlights a tough environment. Small businesses have felt the impact of workers unable to get into the office because of transport chaos, or issues with child care more so than some larger businesses.  A downturn in the volume of transactions due to customers staying in their homes during the poor conditions, or the difficulty of managing the supply chain due to transport issues have meant few companies have escaped.

Of course if your company imports and retail sledges and skis you might be seeing an unexpected boom. There is also a case for independent retailers and grocers seeing customer footfall increase as consumers ditch the car journey to the supermarket in favour of the 5 minute walk to the local shop.

What level of impact and exposure your business has to the weather conditions will of course vary greatly from others depending on the nature of your business, your communication infrastructure, your geography and that of your workforce.

Whilst it may now seem a little reactive and probably too late, now would be a good time to look at contingency plan for your business. This plan should look at issues such as the recent cold weather but also other problems such as postal strike, power failures or viral outbreaks such as Swine Flu. Now we’re not saying you should have a plan as detailed as a 1960′s government nuclear fallout strategy but it would be worth thinking about some of the following…

1. Supply Chain – do we have a back up if our 1st route to market is lost (ie: Royal Mail postal strike)?

2. Remote working – Are we capable of running our business if access to our premises is blocked and/or our workforce are unable to get here? – access to web-mail, cloud software. etc.

3. Do we have an alternative method of selling our products? Traditional retailers who can’t operate their store may be able to maintain some level of sales via an on-line operation.

4. Can our business operate on a workforce attendance less than 50%? What changes can we make to allow this?

5. What is our recover plan/options? If you can’t operate the business what levers can you pull to get back on track?

Limeminds recommends you take sometime to pull a 1 page document covering these areas and any others that may impact your business. Any areas you feel exposed in should be made a priority.

If you would like Limeminds to work with you to analyse the company’s position and provide a clear solution plan we can be contacted via consultants@limeminds.com

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2010 unfortunately looks to be just as [...]]]> There is no doubt that 2009 has been a tough year for the economy and an even tougher year for small businesses. Reduced consumer spending, increased cost of borrowing, less credit available and political uncertainty have all contributed to making it a tough year for those in business.

2010 unfortunately looks to be just as tough if not worse as taxes look set to rise and credit still remains thin on the ground. Consumer confidence is low and as food prices start to increase, the reality of inflation will start to hurt people’s contracting wallets.

For some businesses however the year will be a bright one. Those firms who position themselves correctly by having a clear strategy, reduced cost base and a determined management team will do well as their competition struggle. History shows that those businesses who invest in tough economic times thrive and grow, often to become powerful companies in the stronger economic period which follows.

Investing in a company can come in many forms, it may represent an upgrade of IT systems or manufacturing equipment. It may mean recruiting some high-caliber personnel or investing in training to enhance your skill base. It can also mean investing in the goals and direction of your business through a strong, clear and focused plan of attack.

Any business with strong leadership and a clear goals always outperforms one without but often taking time to evaluate your position and future direction is the last thing on your mind when the day to day challenges consumer all your time. Help is at hand…

Limeminds are offering the best value investment you can make in your business through our recession busting Business Report E-Package where we will evaluate the health of your business and most importantly provide a clear strategy for 2010 and beyond. This fantastic offer is only £66.00 including VAT and is available until 31/01/2010.

The E-Package contains:

• 5 Page Business Report – evaluating current sale and financial performance and provides a suggested plan for success in 2010. The report will highlight the strengths and weaknesses within your business, areas to make cost reductions and high growth opportunities you can utilize in 2010.
• 2 months of free E-consultancy to help implement the plans in the Business Report
• Future discounts on a range of our services and products

As an E-package you will not have any consultants spending weeks walking around your business which can often interfere with the day to day running. Information required to complete the report can be submitted when you want rather than needing to arrange meetings during your busy working day.

To access this package please email us at consultants@limeminds.com before 31/01/10, you will then be sent a business questionaire to complete and receive a call to discuss your current position. This package can also benefit those businesses in the pre-startup phase just as much as a business which has been in operation for 20 years.

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For those who watch the [...]]]> For many small business owners and entrepreneurs external investment is required to help them develop their business and whilst gaining that investment may not take on the appearance of that seen in the BBC program now in its seventh series. You can certainly take some key lessons from the show.

For those who watch the show the criteria the Dragons are looking for in potential investments are very clear and more importantly consistent.

Here are the top 4 things to consider when looking to raise investment straight from the Dragon’s mouths…

1. Know your business – Understand how your business works or will work, know your numbers – turnover, profits, margins. Be able to communicate what your business does clearly and succinctly. If you can’t explain what your does does in 30 seconds you don’t have a business.

2. Don’t stick your finger in the air when valuing your business – Your business valuation should be be based on sound reasoning; sales performance, comparisons to similar companies and products. Don’t use the 1% rule or £1 million, both just highlight the lack of research and planning you have done and will scare investors off from the start.

3. Give the investors some thing to get excited about – Demonstrate why your expertise or your product are different from the competition and why you are better placed to be successful. Maybe its your experience or a list of achievements you have made, or maybe its a patent you have secured on the design of a new product.

4. Give them a clear exit strategy – At the end of the day all Investors want to make money out of their investments and if you provide a clear plan for them to make their money back (and then some) within 3-5 years they’ll much quicker to invest.

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If the company you are looking at is [...]]]> We’ve listed a few of the quick financial measures you can run on your customers (or suppliers) to check their business health. We’re sure you’d agree that in ths current economic climate any insight into the long term viability of your customers and suppliers is fairly useful.

If the company you are looking at is listed on the stock exchange you should be able to access these measures through a number of financial websites online without needing to employ any maths, (our favourite is www.advfn.co.uk) but don’t worry if the company isn’t listed as you can work these measures out with just the company’s annual reports logged at Companies House (for those based in the UK) and a calculator.

Current Ratio

Current Assets (CA) Divided by Current Liabilities (CL)

Current assets divided by current liabilities i.e. the ability (in theory) of a company to meet its short term debt on demand, for instance, if it went into receivership.

Strictly speaking this ratio should be greater or equal to 1, although in practice a much lower value is widely accepted (one of the effects of Just-In-Time).

Quick Ratio (acid test)

Current Assets (CA) – Stocks Divided by Current Liabilities

Current assets less stocks divided by current liabilities.

The rationale here is that stocks cannot be quickly converted into cash in order to meet short term debt on demand, and hence they are deducted from current assets.

In theory, a company’s quick ratio should be greater or equal to 1, or it is insolvent. However, a much lower figure is generally accepted today, provided that the company is considered to be financially stable.

Return on Capital Employed (ROCE) %

Net Profit before taxation x 100

Fixed Assets (FA) + Current Assets (CA) – Current Liabilities

Net profit (profit before taxation) as a percentage of the capital tied up in the business i.e. the company’s profitability.

The higher the ration the more profitable the company. Relate this to net margin and capital turnover.

The percentage return must be compared with alternative investment opportunities, such as returns offered on bank accounts.

If investment in the bank can yield a guaranteed 7 per cent plus (depending on interest rates at the time), a company should show a return of around 20 per cent in order to justify using those funds at a higher level of risk.

Debtor Period (days)

365 X Debtors Divided by Turnover

The average number of days credit given to customers i.e. how long it takes the company to get its money in.

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