May 9, 2012
Filed under: Business Finance,Business News,Small business,Small Business News — Alan @ 1:03 pm
A survey carried out for Pitney Bowes, the communications group, has found that 8 out of 10 small to medium-sized travel firms think that the rise in postal charges this week will have an effect on their businesses. And 1 in 10 think that it may put them out of business altogether.
On Monday, first class postal charges in the UK went up to 60 pence from 46 pence and the cost of a second class stamp rose to 50 pence from 36 pence. 30 percent of the SMEs said in the survey that they will find other ways to send their post or even send less post Half of them said that the impact on their business will be “big”.
Almost 7 out of 10 firms did not realize that the increases were going to be that large and were disappointed in the amount of information available in advance. Franked mail is still cheaper than standard rates. The cost of first class is up from 39 pence to 44pence and second class rose 3 pence to 31 pence.
Phil Hutchison, marketing director of Pitney Bowes, urged SMEs not to panic and suggested folding A4 documents thus reducing costs of the large first class mail which is 90 pence and the large second class which is 69 pence. Another possibility, he said was to send postcards or self-addressed envelopes to customers again reducing costs. He also said traditional print campaigns would now be critical for marketing.
April 26, 2012
Filed under: Business Advice,Business News,Small business,Small Business News — Alan @ 12:39 pm
Small businesses are finding it more and more difficult to secure the funding they need to expand from traditional lenders. This week the debate over where companies should turn in order to find new funding opportunities has taken a new turn.
The government were previously very critical about the fact that the big banks were not lending to small businesses. The government have repeatedly said how important small businesses are to the recovery of the economy and how troubled they are by the fact that banks are resistant to lending to them.
In a change of tactics the government have now said that they are encouraging people to get involved in peer-to-peer lending. This is where individuals can go online and offer money to be lent to a company. Often these businesses are particularly small and are looking for the start-up capital they need. Often they are other sorts of organisations such as social enterprises.
The banks in the UK are also facing an increasing amount of regulation and various proposals have been put forward in order to ensure that banks offer more to small businesses in the future. However, it is understandable that the banks are currently adverse to giving out loans to small businesses.
They are typically a higher risk choice and in these times of general economic decline, banks are not willing to take the risk that a business will fail, and they will not be able to get all of their investment back.
The banks have defended these actions saying that being risk averse allows them to offer products to their customers at a much more affordable rate. Various business lobby groups have acknowledged the statements by the bank however the government has said that it is very important that banks do continue to lend to small businesses.
The Bank of England has stated that in order to keep costs low for customers, they shouldn’t not invest in small companies, but they should focus on paying their board of directors smaller salaries and not giving them such significant bonus packages.
April 25, 2012
Filed under: Business Advice,Business News,Small Business News — Alan @ 12:36 pm
Cisco Systems have recently made the announcement that they are going to be adjusting their portfolio of products that they are offering to small businesses. This change is largely coming because the company realise that many of the small companies they work with are going to be wanting more mobile technologies, including cloud computing.
In order to meet this demand the company are focusing on setting up additional wireless access areas for companies, as well as increasing the number of switches and routers available to them.
The managing director for Cisco Systems in the U.K.’s David Critchley and he has commented, “We are looking to introduce more solutions for small business customers. We want to make sure that their organisations are as productive as possible and are utilising new technologies that are going to be of advantage to them.
This means making their businesses more accessible for use with smart phones and tablet computers. We are also focusing a large amount of effort on allowing customers to make better use of cloud computing.”
Mr Critchley continued, “The sort of cloud computing technology we can offer will allow companies to make use of real-time alerts, detailed reporting and even remote management capability. For small businesses speeding up their technology allows them to speed up their business.
We are keen to provide these opportunities for our customers and we are always working to do this on a level that is affordable for them. The basic service we are offering starts at just $250.”
April 11, 2012
Filed under: Business Finance,Small business,Small Business News — Alan @ 7:02 pm
With all the emphasis on the importance of small and medium-sized businesses in the UK’s economic recovery and growth, the problem of financing for those SMEs has been a subject of much controversy and indignation. SME owners complain that bank financing is too expensive and too restricted; banks are leery of lending money to start-ups and business entrepreneurs.
A relatively new source of funds is beginning to look as if it may take the place of banks, at least for some SMEs. It’s known as peer-to-peer or social lending, or P2P. It started a few years ago as a way for small investors to loan spare cash directly to another private party, usually a friend or associate. The idea was to cut out the fees and paperwork involved with banks and brokers, and make the transaction easier and more profitable for both parties.
The idea took hold in a big way, and by now even the government is getting behind it. In his last budget statement UK Chancellor George Osborne earmarked £100 million in government funds for P2P and other non-traditional lending sources, as part of his ongoing efforts to make more funds available to SMEs.
However, that’s just a drop in the bucket of what’s needed, and FSB (Federation of Small Businesses) says only a small fraction of its members are even aware of the P2P opportunities. Currently, total SME loans through peer-to-peer channels only amount to between £100m to £200m a year.
With the P2P setup, ideally a lender/individual can get a better return than by putting the money into savings, and generally in a much shorter time. The borrower gets faster, easier access to funds at less cost than with traditional lenders (banks). The first P2P company to have an established presence in the UK was Zopa, created in 2005, but at present there are five well established groups and more on the way.
April 10, 2012
Filed under: Business Advice,Business Finance,General,Small business,Small Business News — Alan @ 6:59 pm
SMEs in the UK seem to be in a beleaguered situation, what with the government counting on them to restore the economy to the fast track but with many a small business owner unable to get the funds needed to start up or grow a business. It’s a long and rocky road to success for the great majority of new, small business, but here’s something that may smooth the way, at least in one sense.
Starting in April, Jaguar will be purring at the doorsteps of SMEs with vehicles and leasing programs specially designed for the SME market (which may suddenly have a growth spurt as this program unfolds).
Jaguar’s UK sales director, David Lewis, handles retail and corporate sales, and he says the company has focused too much on private sales. He has instigated a re-training program to educate all of Jaguar’s 90 dealers in the fine points of the SME market and its requirements.
Lewis says that it’s not that businessmen don’t shop for Jaguars, it’s that the company has heretofore dealt with them on a corporate basis. He says the new approach will be more personal and appeal to the typical SME owner, who is almost by definition an entrepreneur and an individualist.
One thing SMEs may be looking for is an attractive leasing package; there is little doubt that the vehicle would clinch the deal if it’s one of Jaguar’s new line of ‘business models’. That’s what Jaguar will be presenting; two new Jaguars based on the XF 2.2 diesel – the XF SE Business model and the XF Sports model.
Mr. Lewis says the latest indication is that the higher powered Sport version is sweeping the field as far as SME owners are concerned – even though it doesn’t lead the field in CO2 emission tax breaks.
April 4, 2012
Filed under: Business Advice,Business Finance,General,Small business,Small Business News — Alan @ 11:02 am
Small businesses in the UK will get a helping hand from the acquisition of Singers Asset Finance by a relatively new lending institution, Shawbrook Bank, which completed the transaction on 22 March.
Shawbrook was created in 2011 as a specialist savings and lending bank committed to increasing the volume of loans made to small and medium businesses.
Chaired by former RBS head Sir George Matthewson, Shawbrook joins the small but hopefully growing ranks of UK banks such as Aldermore and Metro Bank, launched since the beginning of the credit crisis whose stated aim is to make it easier for ‘young’ businesses to get a solid foothold in an economy just now emerging from recession.
These new enterprises offer options that they hope will challenge the country’s lending giants, banks the government has repeatedly taken to task for their hesitancy in loaning money to SMEs. Owen Woodley, Shawbrook’s chief executive, is confident that the merger with Singer will give his company the means to increase its client base and lending capacity, and to provide more timely service than the big banks have been seen to offer.
Woodley told Reuters news agency that the deal would add £350 million to its loan book, bringing it up to around £500 million, and he expects that figure to reach £700 million by the end of 2012, with a combined client base of at least 25,000.
Shawbrook, Woodley added, will be opting out of George Osborne’s new credit easing plan meant to make it easier for SMEs to borrow money from the big banks. He feels the scheme will not be advantageous to banks like Shawbrook that raise most of their funds from retail deposits as opposed to wholesale financial markets.
Singer and Shawbrook respectively are oriented towards financial solutions for small business, and combining their resources and expertise should benefit both of them, as well as their growing clientele.
March 23, 2012
Filed under: General,Small business,Small Business News — Alan @ 11:38 am
The Green Deal is a government initiative that has been created to benefit small and medium-sized companies. However, it has recently been revealed that many construction workers for smaller companies are unaware of what the deal actually offers.
Smaller companies are failing to train their employees to be aware of what the Green Deal is because they are afraid that their businesses will be pushed out in favour of larger companies in the same sector.
The survey that has revealed these figures has been conducted by the Green Deal Skills Alliance which has shown that small companies are afraid that they will be unable to offer prices that can remain competitive with a large company such as Tesco and British Gas.
One of the primary concerns small companies have is over the cost of assessments. This is something that larger companies are able to offer for free on the prospect of new business, but something smaller firms are unable to afford. Therefore smaller companies have called on the government to give a set fee for every assessment.
Many of the people who responded to the survey also had other concerns. One of the primary concerns was that the number of new jobs that could be created is not is generous as the government suggest. This is largely because they expect that the workforce currently in the market would be enough to meet even the increased demand from the government. There are also concerns that the boost will only last for a short time as it is not an ongoing project.
Edward Davey is the energy secretary and about the scheme he has commented, “We have been working very closely with the industry to make sure that this Green Deal is going to benefit as many people as possible.
We are targeting areas of the industry that have the demand for our services, but also are most in need of funding. We are strongly encouraging all companies to make their strongest efforts to prepare the businesses for the launch of the Deal, which is occurring later in the year.”
The survey has seen a more positive response from around 20 percent of respondents, who are saying they expect their turnover to increase because of the project. However, a small percentage have said that they actually predict their profits to fall because of the launch of the project.
CITB-ConstructionSkills has recently announced that they are going to be working with the government to provide funding for a programme that is going to train people to install insulation. The Chief Executive of the company is Mark Farrar and he has said, “One of the main reasons we are finding that small companies are not being up to get involved with the Green Deal is because of a lack of training.
We are hoping that this training will increase the number of commercial opportunities for small businesses and we encourage all employers to get involved with skills training.”
Asset Skills is another company that has been working as part of the Green Deal and the Chief Executive of this firm is Sarah Bentley who has commented, “This recent report is accurate in that it shows the concerns surrounding the project. We are continuing to work with our advisers to create a project that is going to be successful.
A key to this is having a well-trained workforce and we are very pleased to be able to be involved in this training programme. We believe that if the scheme is executed in the correct way that it is going to be very positive for the growth of the industry.”
March 3, 2012
Filed under: Small Business News — Alan @ 12:18 pm
The computer manufacturer Lenovo has been increasing its market share internationally for PCs.
The company has also recently stated that they plan to become a significant force in consumer markets, as well as small to medium enterprise markets, in the UK.
In the last month alone, Lenovo have partnered with 100 new companies and it is expected that this number will be growing by around 25 percent in 2012. The announcement has been made by Darren Phelps, who is the channel director in Ireland. He made the remarks at the MicroScope event.
Mr Phelps indicated that he wants to see his company reduce the market share of other vendor’s, he commented, “We need to focus on growing our business and expanding our breadth of reach in the UK.” Lenovo acquired the PC business of IBM back in 2004 and because of this the company has become known for creating high-performance and well built laptops that are popular with companies.
Mr Phelps has commented however, “Our portfolio is evolving so much that people’s perception of our company is going to change. In the past if we had talked about selling computers to small enterprises there would have been seeds of doubt but we’ve realised that by working through resellers, this is a market that we can work well with.”
Mr Phelps also commented about the company’s development of new portable electronic devices saying, “We do not yet consider ultrabooks or tablets to be enough of a volume product for us to fully pursue.
We do think that they are going to play a more important role during this year and at the end of it we will reconsider the options. Our Edge notebook devices are the main ones that we are hoping to sell to the smaller enterprise market as we feel this is the perfect solution for their needs”.
Filed under: Small Business News — Alan @ 10:27 am
Two of Britain’s newest banks have criticised a new government scheme which aims to ensure that small businesses will never again be starved of credit, as many were in the aftermath of 2008′s financial crisis.
Shawbrook Bank and Aldermore, themselves founded in the months after the credit crunch, claim the project will not meet its targets for lending to small businesses, following in the footsteps of the failed “Project Merlin”, another coalition programme which was supposed to force High Street banks to lend a certain amount to small-and-medium-sized enterprises.
Chancellor George Osbourne had hoped to launch the £20 billion fund for small businesses which had struggled to get financing over the last three years by the time the next Budget came around, towards the end of March. Aldermore Chief Executive Phillip Monks claims that as the scheme stands it actually does nothing to make more credit available to small firms; it only makes the credit a little cheaper once it has been secured.
In essence, the same companies will be struggling for cash once the project is up and running as they are the ones which have had, and will continue to have, the most difficulties persuading a third party to lend them money.
The Chief Executive of Shawbrook Bank, Owen Woodley, feels any fund to provide credit for UK business will not work as long as it is only the same old faces that are involved in the deals. He called for banks like his and Aldermore to be more involved in these schemes alongside the four main High Street banks; the very institutions whose mismanagement of debt lead to the crisis in the first place.
Both men were extremely critical of the decision to hand over this latest fund to the “Big Four” when it was those same banks that failed to make a success of Project Merlin. Royal Bank of Scotland, Barclays, HSBC and Lloyds were the targets of that particular scheme which was an attempt by the government to encourage, and even force, the banks to increase their lending to small businesses, in an effort to stimulate the economy.
Months later, and many business experts are reporting that it is just as difficult to get credit out of these institutions now as it has been at any time since the credit crunch.
February 15, 2012
Filed under: Small Business News — Alan @ 10:22 am
In the past two years, the number of businesses that are taking out a loan, or a bank overdraft, has fallen.
This revelation has come out of a survey that was conducted by the Federation of Small Businesses.
It was recently shown that in the last year, bank lending shrunk in every quarter and many people see this as an embarrassing failure of the government’s Project Merlin.
The largest banks in the UK failed to meet targets that have been set about how much they should be lending to small businesses. The figure was missed by over £1 billion, however, the amount of money lent to businesses, big and small, did grow overall by just under £25 billion.
RBS was the main reason there was a shortfall in the amount of lending to small businesses. The other four major banks in the UK, Barclays, HSBC, Santander and Lloyds all managed to meet their targets. This is despite RBS being over 80 percent owned by the government.
Stephen Hester, the chief executive of RBS, has defended his bank saying that the amount of lending they did was similar to what all the other banks lent when combined. The banks previously agreed to increase lending to small companies to nearly £80 billion and also increase lending to all types of businesses up to £190 billion.
11,000 members of the FSB took part in the survey and it found that only around one in three used their overdraft facility last year. Around 10 percent took out a secured bank loan with even less than that taking out one that was insecure. This is a significant drop in the amount of lending that was taking place in 2009. A similar number of businesses, again around one in three, said that they used savings to fund their businesses.
The use of savings was especially true among companies that had recently started trading, with 70 percent saying they turned to this form of funding. Furthermore, nearly 35 percent of companies said they borrowed money from family or friends and only 25 percent use the bank overdraft.
The chairman of the FSB in the Wessex region is Ken Moon, and said, “The amount of money being lent overall is bigger than the target but it just goes to show that more money is being lent to bigger companies. We need more money to be given to smaller firms so they can take advantage of growth opportunities. Research has shown that credit is being refused to small companies and they are being forced to find other means of funding.”
The British Bankers Association commented that the large banks do have a commitment to lending to businesses which is shown by the figures. They also pointed out that information from the Bank of England has shown that the demand for credit from small companies actually fell during three out of the four quarters of last year. The government stated that they will not be repeating Project Merlin in 2012.
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