Centre for Enterprise
Business Finance Edition
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IMPACT WINTER, 2013
Viewpoint from the Regional Director of Corporate Business for Royal Bank of Scotland, Rob Pailin, on how to build a successful relationship with your bank
Business Finance - North West LEP Areas: Successful small firms tell their story of accessing finance to grow - How to improve your credit rating - Find out how networking can bootstrap your business
Putting knowledge to work to grow your business • Picture by Ade Hunter
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Introduction from the Prof.
UK Business Stats
Hello and welcome to the Winter 2013 edition of our quarterly e-magazine IMPACT. This issue is packed with knowledge, insight, case studies and practical tips around business finance, from MMU’s Centre for Enterprise.
It's not about the money…
Start of 2012
Start of 2013
4,798,000
4,900,000
Private Sector
Private Sector
Breakdown of Private Sector Firms
99.3%
0.6% 0.1%
Small/Micro Firms
Medium Firms
Large Firms
Businesses with no employees in the Private Sector Businesses with employees in the Private Sector
% %
75.3
Or maybe it is? The Bank of England quarterly reports, which map credit flows, show that lending to small firms has increased again this quarter – that's two quarters of SME lending increases compared with six of no change or decreased lending. Evidence from our own research shows marginal or no changes to access to credit here in the North West, so where is all the money going?
• Picture by Ade Hunter
Professor Lynn Martin
Perhaps the lending increase might be related to the increased numbers of firms. Professor of The Office for National Statistics reports an Entrepreneurship estimated 4.9 million private sector businesses in the UK at the start of 2013, an and Director of the increase of 102,000 compared to the start of Centre for Enterprise 2012, continuing the trend of steady growth in the UK business population since the series began in 2000. Most of this growth in numbers is in very small firms that are less likely to access loans or other funds, however, as their possible sources of money include redundancy payments. If you employ more than 50 people you are in a small minority. Only 31,000 of firms (0.6 per cent) were medium-sized (50 to 249 employees) and 7,000 (0.1 per cent) were large (250 or more employees). Those employing between 2-49 people comprise around 24% of firms and are seen as the key to economic growth by politicians of all persuasions. However, the majority are self-employed or sole traders. At the start of 2013, businesses with no employees accounted for 75.3 per cent of all private sector businesses in the UK. If this describes you, you are one of 3.7 million businesses accounting for 16.6 per cent of private sector employment and 6.4 per cent of private sector turnover? It is not just high tech firms that are growing and employing people either. If you look at the case studies on page 6 you will see that the largest growth example is a research and development led company in Warrington, followed by a ‘not-for-profit’ social enterprise in Birkenhead.
Finance is just one factor. So if it's not the extra firms, perhaps the extra funds are specifically to support growth? Well, finance is a factor, but it is only one of many for growth firms. Research from the University of Surrey exploring the characteristics of successful SMEs suggests that these firms and their owner-managers are more likely to proactively monitor their cash flow and liquidity and to use more than one source of finance to both start and sustain their business. But they are also more likely to: ŸConsider direct referrals and search engine optimisation as central to their success ŸBe willing to find new ways of doing things and encourage their employees to think and behave innovatively ŸBelieve that learning gives them competitive advantage ŸBe open to external advice
Despite this, using more than one source of funding is uncommon. For instance, most use one source of finance to start the business, the main source being personal/family savings with a smaller proportion using a bank loan. If some of these points sound like you or your firm, why not explore other routes to finance your business - and check the successful SMEs to benchmark your own practice.
24.7
That's all from me for now, I hope you enjoy the issue and don't hesitate to get in touch with us with any questions, feedback or ideas. We are interested in you and your business, so the first step is to come in for a cup of tea!
• Information from the Office for National Statistics
“Putting knowledge to work to grow your business” The Centre for Enterprise at Manchester Metropolitan University is passionate about turning research into practical knowledge, which can be applied to improve regional businesses. Our areas of expertise are growth, leadership, entrepreneurship and sustainability. We offer a range of programmes around these themes, many of which are fully-funded. Register with us to access our knowledge, our business network and to grow your business.
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Contents 1
IMPACT
INTRODUCTION Lynn Martin, Professor of
Entrepreneurship and Director of the Centre for Enterprise - It’s not about the money... Or maybe it is?
3
INSIGHT from Rob Pailin, Regional Director of
Corporate Finance for Royal Bank of Scotland, on how to build a successful relationship with your bank
4
5
RESEARCH Pull yourself up by your Bootstraps - how networking can help you bootstrap your business
5
• Picture by Ade Hunter
CASE STUDY from David Forrest, Chief Executive of
Compliance Control Ltd, recounts some of the financial pitfalls and triumphs that have helped him achieve growth
6
CREDIT RATING
FINANCE Who uses credit ratings in the UK?
Information that agencies use to rate your company
What you need to do to get the credit rating you deserve
Financials
NORTH WEST LEP AREAS: Successful small firms
Check Experian
Demographics
tell their story of accessing finance to grow
Check your own personal rating via Noddle
Negative News
7
Sort our black marks like CCJs
Trade Relations
PRACTICAL TIPS from Peter Wild, Senior Lecturer in
7
Fill your accounts
you your suppliers your customers and external funders
Accounting and Finance, offers us some practical tips on how to improve your credit rating
The Owners
Tell the Agencies what you are up to
Sector/ Economy
8
INSIGHT from Jonathan Lawson, Enterprise Fellow Head and Heart: Why finance can be more emotional than you might think (or feel)
8
FINANCE ON TWITTER Eleven finance Twitter accounts that business owners follow
9
PROGRAMMES We would love to work with you:
8
why not browse the current support programmes available? Register you and your business now for further information
• Picture by Ade Hunter
200
Manchester City Centre
150 100 50 m
Beetham Tower
C.I.S. Tower
MMU Business Great Northern Manchester & Law Faculty Tower Town Hall
3
CONTACT US Want to contribute to Impact? Each issue of IMPACT carries a central theme, but also relies on contributions from the businesses we work with, our dedicated research team, the wider MMU community and our partners. We always welcome your input so please get in touch. For future IMPACT e-magazine issue themes and to submit a contribution for consideration please email: k.young@mmu.ac.uk 0161 247 3989
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Ask the Prof a question? Questions will be printed and answered in the next issue.
Want to subscribe to Impact quarterly? Visit www.mmucfe.co.uk where you can sign up for our free new event and programme alerts. Join the Centre for Enterprise on LinkedIn
Professor Lynn Martin Professor of Entrepreneurship and Director of the Centre for Enterprise Direct Questions to: 0161 247 3989 k.young@mmu.ac.uk
Follow us on Twitter @mmucfe
General Enquiries? Telephone: +44 (0)161 247 3871 Email: cfe@mmu.ac.uk
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Insight
TUESDAY, DECEMBER 17, 2013
• Written by Dionne Anderson
Viewpoint: Rob Pailin, Regional Director of Corporate Business for RBS owner’s own making, they may not be completely in control, nor have the occupational capacity to manage the business effectively. Ensuring that the business owner has the right management structure in place and is not spread too thinly is also evidence that the right support structures are in place, regardless of whether the owner is physically present in the business day- to- day or not.
• Picture provided by RBS
It could be said that running your own business is comparable to climbing a mountain. Someone that has recent experience in both these realms is Rob Pailin, Regional Director of Corporate Banking for the Royal Bank of Scotland and Centre for Enterprise Advisory Board member. Shortly after returning from a charity bike ride in the French Alps, which raised over £1/4m for Christie's Hospital, Rob Pailin took time out of his schedule to talk to us about the importance of company management structures, the current climate, building a relationship with your bank and business support. Rob says... ‘Emerging into a growth phase can be a challenging time for SMEs, especially amidst the current economic recovery. So what is the successful formula for relationship management? What can you do as a business owner to have a winning relationship with your bank? What does RBS look for, when it is approached by a company?’ Management Structure It's understandable that an owner, who has invested personally and financially in their business, may be sensitive to communicating business risks or difficulties to their bank. Rob clarified that what he always wants to understand when talking to a customer is what their plan is. Has growth been achieved as a result of this plan, and to what extent is growth featured in the plan moving forward? Often, if the growth of a business is not of the
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“Making sure that we can evidence a person is in total control and is capable of handling the growth they are projecting is essential. We never like to discourage somebody with a fantastic idea. Growth can be at all sorts of levels.” “Some businesses go through rapid phases of growth and it's the control through that growth that's massively important. You cannot always be a one-man band.” Current Climate An article in The Independent 'Small Talk: Come on, banks – it's time to start doing right by SMEs, Monday, 14 October suggested lending to growing SMEs may soon become even more accessible, if economic growth is sustained. But what does this actually mean for SME business owners that are considering approaching a bank to ask for finance? Rob says... The fact that banks are lending less is partly due to the fact that the demand to take on more debt has actually been decreasing. “Yes, there might be less demand there at the moment, but the expectation is that as the economy starts to turn, naturally there will be more demand. We need to ensure that we as a Bank are ready to be able to meet that demand and support growth when the confidence returns.” It is important that both the bank and the business owner are able to see threats and weaknesses to the business and not just be blinded by their strengths and opportunities. A business that does not understand their issues, or at least recognise them, whether that be through uncontrolled growth, competitors, market factors or regulation, is going to lack credibility.
Build a relationship with your bank Rob emphasised the importance of engaging with your bank early on, throughout the whole process and not just when you are about to hit challenging times. If you want a relationship with your bank, you need to involve them in conversations about risks and difficulties. If the first interaction you have with your bank is to approach them for specific finance, perhaps for an acquisition, a specific piece of equipment or a property, then you would be looking at the bank as being a transactional provider of finance and sometimes it may be too late. It is far easier for the bank to deal with issues relating to growth, if it is involved in the process, rather than if the first interaction it is when you have reached your overdraft limit. “Relationships are a two way thing.” Rob highlights that 'it is impossible for the bank to build that relationship unless that business owner is also inviting the bank into that relationship'. Banks tend not to like surprises, so the more management information that evidences the key metrics, whether that be the numbers in terms of financial performance or the particular KPIs indicating whether the business is performing or not, is always helpful. 'Sometimes we are provided with too much information and it is hard to see the wood from the trees. Understanding the level of information required is useful for both parties.’ It is true that not every customer chooses a face to face relationship with their bank, preferring a telephone based approach, but SMEs, especially those in a growth phase can always benefit from at least talking to the bank. The vast majority of these businesses would have a named relationship manager. “A really good relationship can benefit from the network we have available
Get Involved We welcome any business who has growth aspirations, so please get in contact for upcoming events or to discuss how we can support you. Centre for Enterprise, MMU 0161 247 3871 cfe@mmu.ac.uk Twitter: @mmucfe
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within the bank to support that business. We have recently launched BizCrowd, which is a portal enabling businesses to network with each other for free.” Your Relationship Manager Rob stressed the importance of a business owner questioning their relationship manager, should they feel like they can't see specific benefits to the relationship or if they feel they need more support or guidance. “If that relationship manager isn't adding any value to you, whether that's through advice or proactive instruction, then is it really a relationship?”
the bank. A common misconception is that banks are only a source of finance, but there are lots of offerings a bank has for SMEs looking to grow and develop. With growth comes greater and more complex needs, to which a vast array of products are available just outside the ordinary spectrum. For example, RBS runs a program called 'Mentor' – which p rov i d e s H e a l t h a n d S a f e t y / Employment Law advice. The bank in fact offers a considerable range of products, but the important thing, says Rob, are the provisions that extend beyond the products and services we provide. For example, we can provide networking, introductions to other advisors, opportunities provided by the Goldman Sachs 10,000 Small Businesses programme and the introduction to the SME Club.
“I've often used the expression “a good marriage doesn't succeed without effort;” relationships don't just work – they work because people put effort into it'. What is it that YOU are doing to enhance the relationship with your Manager and vice versa?
“It's not just about the products the bank provides – it's also about adding value to that customer above and beyond”.
Business Support There are many other avenues of support that can be accessed through
Reflecting on the challenges ahead, not only for SMEs but for banks as well.
Rob admits, “We're learning. We are moving on and taking on board feedback received to implement customer focussed improvements. This is now really about looking at our relationships with customers and listening to their future plans and working together to try and achieve those dreams and ambitions. We have changed the way that we reward our people and they are now behaviourally driven, looking into how somebody goes about what they're doing rather than whether they hit internal targets.” “One final piece of advice would be to consider whether the bank you're with has the right products and services. Delivering the access to finance modules with MMU Centre for Enterprise, has shown that often raising awareness about the other avenues available is truly beneficial - you need to consider what is right for you. There is a plethora of advice and products - a minefield. Even if you work in finance, never mind a small business owner. This is where you need to use your relationship manager to point you in the right direction.” • Picture from www.inc.com
• Written by Dr Sue Baines
Pull yourself up by your Bootstraps Find out how networking can help you bootstrap your business While most new businesses need investment for working capital, many struggle to obtain finance, despite use of overdrafts, bank loans and equity finance. Grants and soft loan schemes have been available under various public and philanthropic programmes but the most often used finance is personal investment, mainly from individual savings and gifts from family and friends. Some social groups experience different barriers to raising start-up finance, with graduates having the least and ethnic minority business owners having the most difficulty in doing so. That's where bootstrapping comes in!
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Anyone who's started a business on a shoestring is probably good at bootstrapping, because bootstrapping means stretching resources as far as possible. And bootstrapping works for existing business owners. Those bootstrapping usually use personal income and savings, family and community contacts and resources to start up. Once started they are careful to keep costs low, chase debts and get the most out of their resources. Although some of the largest global companies bootstrapped at the start (Apple and Coca Cola amongst them), startups worldwide still bootstrap.
So, if you need to bootstrap you should also think about networking. Research showed that access to social networks enabled new entrepreneurs to bootstrap and that bootstrapping was directly related to success in the early stages of business creation. Networking and bootstrapping skills are crucial in improving the prospects for survival and growth without conventional debt or equity funding.
Get Involved Read the full research article here. Are you a small or medium-sized business looking to grow? We would love to work with you. The first step is to get in touch with us: cfe@mmu.ac.uk or 0161 247 3871
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Case Studies
TUESDAY, DECEMBER 17, 2013
• Written by Dionne Anderson
Financing, Forecasting & Future Growth David Forrest, Chief Executive for Compliance Control Ltd. and graduate of the North West Goldman Sachs 10,000 Small Businesses Programme recounts some of the financial pitfalls and triumphs that have helped him achieve growth. based in Manchester. The owner – Lloyd Payne, was a fellow alumni member from the programme. It's great to be able to reinvest in other SMEs. It's essential that businesses connect and rebuild the North West's economy.
Compliance Control Ltd. is a leading specialist in regulatory compliance services, with more than 30 years experience in the IT industry. Taking part in the 10,000 Small Businesses Programme in 2012 presented him with some challenges he hadn’t ever considered before beginning the learning process. Here David recounts some of the financial factors that have helped him achieve growth.
David says... Prior to joining the programme through the MMU Centre for Enterprise, I had a steady consultancy business, that was dependent on project work and available staff. It was an unpredictable business and I wanted a steady revenue stream. I decided to apply for the programme, to “get me away from the day job”, giving me a chance to focus on getting my business plan and vision into words. It was an exciting opportunity. I found that the Specialist Workshops, Networking and Peer Learning throughout the programme gave me greater confidence in terms of how to grow the business in a structured way, which was something I previously did not have a clear idea on – particularly in terms of how to pitch and draw up a successful funding proposal. I also appreciated the advice and feedback from my mentor about how to seek more funding in order to grow the business. I was provided with the opportunity to speak with many beneficial people from advisors and industry leaders to business angels and financiers. With this support, I successfully received funding from the Technology Strategy Board. I also secured
• Picture from www.compliance-control.com
some additional Venture Capital Funding from the North West BioMedical Fund. It was the networking and coaching that moved me forward. The funding has enabled me to expand my team (we have recently added more office space and employed an additional six members of staff) and to develop the software product, without which I would not have been able to continue the initial prototypes I created. Business turnover is currently around £400,000. Significant monies are being invested in the continued development of software solutions, infrastructure, sales and marketing, advertising and search engine optimisation. I have also been able to establish a contract with Euprotec – a specialist contract research organisation
If there is money available, SMEs should look at it seriously. I was fortunate enough to get a grant, which was a bonus. The VC Equity funding meant that I had to give away some shares, but I look at it as though I'm giving away a small piece of a small cake, in order to get a share of a bigger cake in the future. I would also stress how important it is to have a very detailed business plan, and know it inside out. You will be grilled about every aspect of the plan. Be tenacious, there is money out there. If you are prepared to go and look for it and willing to fight for it, it's achievable. It won't come easy, but there is money for businesses with good management and good ideas. We are now considering raising some additional funding to speed up our global ‘Go To Market’ strategy. As a result of these on-going developments, I'm incredibly optimistic about the future success for Compliance Control Ltd., however, this is only the start of our company's long journey. Three Top Tips: 1. Always have a plan. 2. Be tenacious. Persistence is key. 3. Consider alternative avenues to access finance.
Get Involved David benefited from the Goldman Sachs 10,000 Small Businesses programme - find out here if you and your business could too.
#asktheprof: Questions and Answers Professor Lynn Martin, Director of the Centre for Enterprise, answers your questions:
Cassons Accounts @Cassons_acc “Interested to hear what @proflmartin considers entrepreneurs need from their accountants?”
Lynn Martin @proflmartin “Practical understanding of how small firms work, and grow. Specialist knowledge in tax, credit etc. to help growth happen.”
Landmark Group @LandmarklnvsGrp “Do you feel the word “entrepreneur” has been ruined by the number of people who bestow the title upon themselves rather than earn it?”
Kathryn Young @kyoungcfe “Which entrepreneurs in the UK do you admire and why?”
Lynn Martin @proflmartin “It is often over-used, often devalued by TV stereotypes such as ‘The Apprentice’. But it still means energy, talent, courage and commitment to me.”
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Lynn Martin @proflmartin Professor Lynn Martin Professor of Entrepreneurship and Director of the Centre for Enterprise
“Many different entrepreneurs... Doug Richard & Sahar Hashemi for their honesty re. failure and resilience in the process of success”
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Small firms grow in the North West In challenging times, small firms are still growing in the North West LEP regions. Successful small firms tell their stories of accessing finance to grow. Greater Manchester Hartshorn-Hook Productions, Brian Hook, Creative Director Hartshorn-Hook (H&H) is a modern theatrical entertainment company with bases in London and Manchester, producing commercial theatre in the West End and throughout the UK. H&H also offers general management services for medium to large scale and international productions in the UK.
Private investment - £1m
What was the process involved for accessing this finance? ŸEIS - this is a comprehensive application process with HMRC. ŸArts Council - application process. ŸPrivate - contacts, networking, interest in company and a double page spread on the new company How has your company accessed in The Stage in 2012 attracted huge interest and investors. finance? We originally set up the company What tips would you give to other independent of any grants, companies considering accessing bursaries or public funding. We finance in the same way? accessed private finance mixed with commercial investment and Doing your research carefully is very Know your costs, profits were fed back into the important. company. As we grew, we otherwise investors will pull you developed a web of small investors apart. Be well prepared and know and later on some of the shows the investors and their interests. Be came with their own interested very respectful of the investors’ investors. In 2012 we approached investment e.g. we do not spend the Arts Council to launch some money on taxis etc. They are small/medium scale shows, which investing in you and your ideas. then attracted private investors. They care about something and you We now tend to get first need to take just as much care about performances Art Council funded them. They are good business then take the show to London to get people and will respect you, if you commercial investment to make the show business knowledge as well show sustainable. H&H have also as passion. been involved in crowd-funding, with the high-profile Eric Whitacre musical, Paradise Lost. This project will access a combination of more traditional funding via the government Enterprise Investment Scheme (EIS) and investors.
Any other comments? People don’t talk to each other enough. You need to have a dialogue with peers. On the government funded Knowledge Action Network programme we are talking to people outside our sector, How much finance has your which is also very useful. company successfully accessed? Public funding - £56k
Cheshire Arcis:Altos Group, Jan Rogers, Chief Scientific Officer, Warrington Arcis:Altos Group is a research and ŸGovernment funds via R&D tax development led company with credit submission and through the expertise in the development and TSB grant funding process commercialization of a wide range What tips would you give to other of innovative, effective anticompanies considering accessing microbial application technologies. finance in the same way? How has your company accessed Investors generally invest in the finance? quality of your management team, ŸEquity investment from business coupled with the underlying angel network and via Enterprise proposition. Focus less on the Investment Scheme (EIS) and detailed nitty gritty and more on the Venture Capitalist (VC) funds macro strategic direction the team ŸGovernment funding via R&D tax will drive for. credits and TSB grant Any other comments? How much finance has your ŸBank funding has been zero. As an R&D led business we will struggle company successfully accessed? C i r c a £ 4 . 5 m f r o m e q u i t y to gain bank funding until we are participation and £200k from profitable and highly revenue generating (the time when we government don’t need it!). What was the process involved for ŸEven new initiatives like an accessing this finance? Enterprise Finance Guarantee ŸInvestor presentations to EIS/VC (EFG) require reasonably attractive funds (mainly based in London) revenue and profit figures rather and also to high net worth than accessing the value, of the business angels (via our retained core science and the teams ability corporate financier, Zeus Capital) to commercialise and exploit it.
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Lancashire PTS International Ltd, Tony Sewell, Owner, Adlington predicted cash flows, how many jobs it will create and a series of face to face meetings. The process ends in the hands of solicitors who draw up the final contracts and explain How has your company accessed the small print. finance? We heard about the Rosebud Fund What tips would you give to other at a preview event for the Goldman companies considering accessing Sachs 10,000 Small Businesses finance in the same way? programme and then went through Think carefully about the reasons a rigorous application process and why you require the finance as the were awarded the loan. The whole set up costs are considerable. For process took about four months so cash up to 25k per application an careful planning is required. unsecured loan is the cheapest form of borrowing and the process is very How much finance has your quick, literally days, and if you have company successfully accessed? numerous directors then multiple £250k loans can be secured. This is my What was the process involved for preferred option with repayment terms between one and five years. accessing this finance? A combination of application forms backed up with 3 year’s accounts, PTS operates, both in the UK and abroad, in two distinct areas: Pavement Engineering and Materials Testing.
Merseyside Moneyline, Diane Burridge, CEO, Birkenhead Moneyline is a 'not-for-profit' social enterprise operating in the nonstandard credit sector. The company lends substantial volumes of small loans (averaging £500) and provides an opportunity to save alongside lending to customers. Moneyline now has 20 secondary high street branches throughout England and Wales. “There was a transition period to make the business sustainable but also investment ready, so that we could say, “We are sustainable but also we can make a significant
social impact if you invest in us,” she said. Burridge started pitching to investors whilst on the Goldman Sachs 10,000 Small Businesses programme and since finishing, has raised £2.5m through major investors in the social investment space, which she says will enable her to grow the core business by 40%. She wants to raise a further £10m through a second round in 2013/14 to open more branches and expand other ways of delivering the products and services in the next 18 months.
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Practical Tips
• Written by Peter Wild
Don’t let your credit rating get in the way of your plans CREDIT RATING
FINANCE
Who uses credit ratings in the UK?
Information that agencies use to rate your company
What you need to do to get the credit rating you deserve
Financials Check Experian
Demographics Check your own personal rating via Noddle
Negative News
Sort out black marks like CCJs
Trade Relations
Fill your accounts
you your suppliers your customers and external funders
The Owners Tell the Agencies what you are up to
Sector/ Economy
• Picture provided by MMU
MMU Senior Lecturer in Accounting and Finance, Peter Wild offers us some practical tips The truth is, the credit ratings of most SMEs are seriously flawed... but the even sadder truth is those ratings play an important role in company funds. Your customers may use them, your suppliers may use them, and your external funders will certainly use them. So, just who are the people behind these ratings, how do they rate you, and how can you change what they think of your business? In the UK, the main credit reference agencies include Experian, Equifax and Dun & Bradstreet. There are others; your own bank may even have a credit-checking service, but they essentially use the same data collated by these main agencies. The infographic above, is a guide to what information the agencies look at, and how it is weighted when they come to rate your company. Financials Information filed by your accountants at Companies House is most important and very heavily relied upon. Try looking at that information yourself - (http://www.compan ieshouse.gov.uk/). See just how hard it is to get an accurate and fair view of your company from what is there, but that's what the agencies use… unless you supply them with better information. Demographics How long has your business traded (the longer the better)? How many changes have How to change your profile: Call their Credit Review service 0844 4818 888 and check out a few of the offerings they have for SMEs. http://www.experian.co.uk/small-business/own-companyreport-credit-review-service.html For £250 they'll let you send them management accounts, business plans, details of new business, and up to 3 trade references (from tame referees!)… and they'll use this to completely review your rating. You can even join CreditPal and let them have online access to your management accounts to ensure the accounting information at the heart of their rating is never out of date.
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you made (too many name changes, too many year-end changes, raises too many questions)? Where is it based (Knightsbridge ranks better than Moss Side)? Negative News The Registry Trust gives them information about court proceedings such as CCJs. Trade Relations Your customers and suppliers may provide extra information on you (particularly those that use the Credit Agencies themselves). Phone & Utilities companies share information almost routinely, so take care with them, pay by DD, and don't stop payments even if in dispute. Agencies also take note of your trade profile, so appearances in trade directories may help. The Owners They will check the personal credit rating of your company directors. Call Credit is the main agency for individuals, and you can see how they rate you personally on Noddle (https://www.noddle.co.uk/). It's free, and has pop-up boxes that allow you to amend the information held about you. And take care with Directorships in other companies, your rating may be affected by those companies too. Sector/Economy Your business sector is also considered, within the context of the overall economy. A restaurant is a risky prospect at the best of times, and during a consumer spending squeeze it's even riskier. Get The Rating You Deserve If the Agencies have the wrong rating for your company… frankly, it's your fault… so: 1. Get your rating Company ratings can differ between Agencies, but check Experian as a minimum (some accountants do this for free), and check your own personal ratings via Noddle. Tidy up any errors (they happen more often
that they should) and sort black marks like County Court Judgements 2. Get your accountant on board The fuller the accounts you file at Companies House and the quicker they are filed the better. Full accounts are by far away the best, but Accountants will file as little information as late as possible… it's the way we are… but it's not good for your rating. 3. Get going Tell the Agencies what you're up to and how things have gone since your last year end accounts. If you're growing, then last year's accounts won't reflect how you're doing, and neither will your rating. All Agencies will take a call and have procedures for challenging & changing the information they have on you and some have 'products' to help improve your rating. I've recently worked with several firms who've lost major sales opportunities or been crippled by cuts in supplier credit limits due to poor credit ratings… and firms who have opened up new export markets or raised money with the help of well managed credit profiles. It isn't rocket science, or a dark art… but it's one of those areas firms don't bother about until they need to… and then it may be too late. It can take up to 60 days for any changes to hit your score so don't let your credit rating get in the way of your plans. Deal with it now.
Get Involved If you would like to hear more from Peter, why not get in touch to see if you are suitable for our fully funded growth programmes? Peter offers invaluable support to SMEs in all areas of Finance. Centre for Enterprise, MMU 0161 247 3871 cfe@mmu.ac.uk Twitter: @mmucfe
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Insight 11 Finance Twitter Accounts Business Owners Follow
1
@FinancialTimes
2
@BizFinanceMag
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• Written by Jonathan Lawson
Head and heart: Why finance can be more emotional than you might think (or feel) Jonathan Lawson, Enterprise Fellow at the Centre for Enterprise, explains how emotions can be a barrier and a motivator to achieving your business goals your business every day, to suppliers, to customers, to banks and funding providers, and that in many cases you aren't managing that story...well... then we see the excitement, the worry and the passion come to the fore. Moreover, if that means you go and do something about it, as I have seen so many businesses do, then that seems like a positive outcome.
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When I am not found angering people into getting to grips with the financial story of their business, I am often to be found helping people to prepare for seeking finance on the Fast Forward Funding programme. Surely, there can be no emotion here, at least, in the cold, hard world of investors and debt providers?
@ericabiz Erica made her first million in her mid-20s & wants others to find the same success. Focus on small business finances & she is very chatty!
@business_angels Envestors Manchester advise ambitious entrepreneurs and invest £20k-5m in high growth NW businesses
@trenttsd After suffering a financial breakdown, Trent Hamm set out to analyse exactly what happened & how to prevent it for the average person
@GetRichSlowly The exact opposite of a get rich scheme! This feed is all about growing your worth over time. Good for business and personal finances.
@FARNOOSH Finance Expert, Author, Host of Financially Fit, the webs #1 personal finance series with some great tips
@BIYourNomey The latest personal finance news from the Business Insider, with some good links
@nwfund The North West Fund is a substantial fund investing in start up and established SMEs
@MarcoCarbajo Owner of Business Credit Insiders Circle, Marco provides great links around how to build your business credit separately from your personal credit
@smallbiztrends News conduit for all things small business, from a variety of authors, discussing all sorts of topics including finance trends
erprising o Collaborative
• Picture by Ade Hunter
"Are you ok there?" my teaching colleague asked a business owner as his session drew to a close. "You've gone a bit quiet." “It's fine," she replied, through partially gritted teeth. "This is just the way I deal with anger." The anger, I hasten to add, wasn't directed at my fellow academic, but at the business owner's own accountant, who, she had just discovered, hadn't really been doing a marvellous job for her. Making the small businesses who take part in my programmes angry is rarely something we seek to achieve, but it can, on occasion, be a force for good. I know that this emotion will be a driving force and that this Managing Director will have better advice, a better credit rating and a stronger financial profile in just a few weeks. And that, of course, is very much something my MMU colleague, Pete Wild, and I, do seek to achieve on programmes such as 10,000 Small Businesses and the Knowledge Action Network, where we explain the inside track on how the world judges your accounts. Emotion about the numbers, which I have seen not just in this one business owner, but in hundreds of owners on the programmes I deliver, seems to be a uniquely inspiring thing. Everyone thinks about their accounts, of course, but often this can become a dry or even daunting exercise, to be endured once a year. However, once you realise that your accounts are busy telling a story about
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Would an investor pass up a great opportunity simply because he or she didn't like the business owner? Can a sceptical bank be won over by the passion and enthusiasm of an entrepreneur? Will a business angel take a punt on the person, even if they do not believe the business model? As a semi-professional cynic, I am constantly surprised when I see those examples where the answer is "yes"… but see them, I do. Now, that is not to say that this is the norm, or that you would not be doing yourself a disservice in relying on an emotional connection over a strong business plan, solid track record and doing your homework. Nevertheless, finding a good finance provider is, for me, about finding a good match. Where a business match is complemented by an emotional match, a values match, even a personality match, the result is so much the stronger. Seeking finance and seeking a fiancé are only a typo apart, but there is more truth to the comparison than you might think. So whether you are looking for money, or managing the money you have got, don't ignore the emotional element - it can be a motivator to improve, a barrier you should acknowledge or an added tool in achieving your goals.
Get Involved We welcome any business who has growth aspirations, so please get in contact for our upcoming events or to discuss how we can support you. Centre for Enterprise, MMU 0161 247 3871 cfe@mmu.ac.uk Twitter: @mmucfe
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CENTRE FOR ENTERPRISE IMPACT
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TUESDAY, DECEMBER 17, 2013
Join a Programme? To find out more, why not get in touch for a chat? “It has been like having your own Mastermind group - it can help you identify and define a problem, then discussing around the issue helps you to a greater understanding. The best thing about it is that you take time out to think about the problem from the outside”
Knowledge Action Network Uncover your business challenges and develop solutions through a network of like-minded peers. This is a fully funded programme, aimed to support small businesses in the North West to grow and innovate. If you would like to be considered for the next intake please express you interest here
“I’ve been supported all the way by my coach who helped me with some crucial decisions, even giving me phone advice outside of sessions. We are in a very exciting place at the moment”
10,000 Small Businesses This programme is a unique, practical programme designed to help the leaders of established small businesses and social enterprises define and achieve their business growth aspirations. Applications are open now for the next intake why not register your business here
“The 10,000 Small Businesses programme has made me recognise my strengths and it has helped me put processes in to place”
Fast Forward Funding Fast Forward Funding gives you all of the knowledge and skills you need to give your business the best chance of raising finance and investment. The next intake is January 2014, so why not register your business for more information here
“Anybody who is serious about raising finance must have a look at the Fast Forward funding programme”
Managers2Leaders Prepare for the future by developing the leadership skills of your senior staff. For more information on the next intake, starting on the 22nd of January, please click here
“Managers2Leaders has helped me gain a network of colleagues and friends that are facing similar issues as mine and can understand me”
• All pictures by Ade Hunter
Register with us for updates on support & events Centre for Enterprise, MMU 0161 247 3871 cfe@mmu.ac.uk Twitter: @mmucfe
erprising o Collaborative
We would love to work with you. The first step is to get in touch with us and tell us a bit more about you and your business. Why not arrange a visit and perhaps we can tell you a bit more about the options available to you.
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Contact us: Website: www.mmucfe.co.uk Telephone: +44 (0)161 247 3871 Email: cfe@mmu.ac.uk Twitter: @MMUcfe Address: Centre for Enterprise Manchester Metropolitan University Faculty of Business and Law, All Saints Campus, Oxford Road Manchester, M15 6BH, United Kingdom