www.xlearning.co.uk

Ocado to deliver on stock market?

2010-07-05T10:29:00.000+01:00

You’ll have probably seen Ocado vans out and about on your travels as they make their Waitrose deliveries. Like most people you probably also thought that Ocado was part of the John Lewis / Waitrose empire.

Whilst Ocado delivers Waitrose-branded products (as well as other brands) the online service is an independent business. Ocado recently confirmed that it will float on the London Stock Exchange with the aim of raising £200m. Shares will be offered to institutional investors, employees and customers who have spent £300 or more so far this year.

Ocado, which was set up in 2002, has never made a profit but they did recently announce a 30% rise in sales, compared with the previous year, in the 24 weeks to 16 May 2010.
Why might shares in a loss making business be an attractive investment? How will the money raised impact the balance sheet? These are some of the issues explored on our finance training and business simulation programmes.

Selling beer at minus £6 a case

2010-06-14T10:21:00.003+01:00

Controversy surrounds the World Cup promotions by some supermarkets, including Tesco and ASDA, to reduce the price of some of their range of beers to less than the amount of duty payable. The Licensed Victuallers Association are quick to point out that pubs and clubs cannot compete when the supermarkets could be losing £6 a case from this offer. The supermarkets can cross-subsidise the cost reductions with many other lines but the options for the licensed trade are much more limited.

This is a bold strategic move, but one which requires a real understanding of the competitive landscape, buying behaviours, and business costs. For a better understanding of the business issues here, have a look at business strategy, business simulations, and business costs. Then decide where you will drink your beer this summer.

The Cost of a Volcano

2010-05-25T16:33:00.002+01:00

It is being reported that the affected Airlines have lost about £1.1 billion as a result of the travel chaos and plane free skies as a consequence of the unpronounceable Icelandic volcano. The head of the International Air Transport Association calculates that at the height of the disruption, airlines were losing £260 million a day. Mr Bisignani said that the final bill to the industry included costs of providing accommodation to stranded customers, feeding them and laying on other modes of transport, such as buses to either get people home, or nearer to home.

“We’ve seen a week without revenue but that has not stopped the costs,” he said.
So, how exactly do the costs impact a business? Just how long can a business survive without any income flowing in? These are just some of the questions we explore on our Understanding Business Costs course; follow the link to read more.

Key Performance Indicators (KPIs)

2010-04-27T09:21:00.002+01:00

How would you feel about driving a car that had no dashboard?

You could run out of fuel without warning, get caught speeding or even suffer an overheated engine without warning.

A business uses KPIs in the same way motorists rely upon the speedo, fuel gauge and temperature gauge on our vehicles. They help us to monitor performance at a glance and if there is anything we don’t like the look of we can take remedial action.

The KPIs a business uses vary from business to business and from industry to industry; they will change depending upon strategic priorities.

Keeping an eye on Gross and Net (Operating) margins are common KPIs as are those that measure how quickly accounts receivable (debtors) are paying or, how quick we are paying our own creditors (accounts payable). Stock, or inventory, turnover tells us how long our stock sits on the shelves and return on capital ratios measure how hard the capital in the business is working.

In fact KPIs can be used to keep track on many many areas of the business. But, avoid the temptation to keep adding measures - keep track of the indicators that will tell you at a glance how the business is performing. Remember its KEY, not MANY performance indicators - contrast the car dashboard with the array of dials and gauges faced by an airline pilot; sure the pilot needs all that info but fortunately we don't need quite so many data feeds to drive our cars. Check out our Understanding KPIs course to help identify the key measures to help keep your business on track.

Bank shares for sale: at what price?

2010-04-26T13:43:00.002+01:00

It has recently been reported that the US government is preparing to sell its 27% stake in Citigroup during 2010. The US Treasury says 7.7 billion shares in the bailed-out bank are to be sold. At Citigroup's opening share price of $4.39 on 29th March 2010, the Treasury's stake is valued just over $33bn, making it $8bn profit, as the shares were acquired for $25bn as part of the $700bn Troubled Asset Relief Program.

A sale of these proportions would mark another stage in the re-building of confidence in the financial markets in general and Wall Street's recovery from recession in particular.

But who will buy these shares? At what price? And what is the effect on the bank's balance sheet? Like any market there is a need for buyers and sellers, both taking a view that the price represents good value.

Our finance courses explore the balance sheet impact of share sales, the ‘risk vs reward’ question asked by investors and why confidence plays a part in share price performance.

Pumping up the costs

2010-04-23T10:01:00.002+01:00

The price of oil has hit an 18-month high leading to speculation that UK petrol prices will pass the record levels seen in the summer of 2008. Rising oil prices are likely to hit the wallets of British drivers already suffering from a weaker pound pushing up wholesale petrol costs. Although the Chancellor has phased in the introduction of the “green” duty rise, 1p a litre was added on April 1, with a further 1p rise to come in October.

So if your supplier puts up the cost of your raw materials how easy is it for you to pass this on by way of a price rise to your customers? What would be the impact on your sales and profits if you put up your prices – or even reduced them? How well do you understand margins and their relationship with overall profitability?

These are some of the themes we explore on our finance courses and business simulations. Pay us an on-line visit or call for an informal chat about how we can help your workers make better financially informed decisions.

In administration: what does this mean?

2010-04-21T09:27:00.001+01:00

Rail maintenance company Jarvis has called in administrators as the cash dried up and lenders refused to offer the company further credit. With Jarvis’ creditors no longer prepared to offer it the money it needed to continue as a going concern the company said it had no option but to enter administration, and trading in its shares on the London Stock Exchange have been suspended.

Following negotiations with the company's secured lenders, it has today become clear that sufficient support will not be extended to the company to enable it to continue trading as a going concern. As a consequence, the directors now have no option but to take steps... to place the company, and certain of its subsidiaries, into administration."

But how can the support of lenders and creditors be so important to a business that withdrawal of that support leads to insolvency? Cash is, as ever, King – our finance training programmes put this into context and explore these implications.

Share buy-backs: good or bad indicators?

2010-03-30T16:04:00.002+01:00

Pepsi have just announced it intends to buy back $15 billion of its own shares over the next 3 years. But why, and what does this say about the wider economic situation?

Share buy-backs generally happen when a company has too much cash and cannot put it to more productive use, and so it returns money to the shareholders, who can gain the same return on a lower level of investment (boosting return on equity and often the share price). This move (and Pepsi is only one of many) is seen by many as a good indicator - that companies no longer feel the need to hoard cash to protect against the downturn.

Others however see this as something more pessimistic, and with long lasting effects. Perhaps companies undertaking buy-backs really cannot see any productive growth opportunities in the short term, and so are returning capital to their shareholders.

These are some of the themes we explore in courses like Financial Analysis and Business Strategy.

Motor manufacturers "strengthen their balance sheets"

2010-03-29T11:50:00.001+01:00

At a time of widespread concern in the sector, both BMW and VW have recently announced lower profits, even though there is growth in their domestic market.

Many motor manufacturers are reported to be strengthening their balance sheets during the recession. But what exactly does that mean? There are many things that most companies can do to manage their balance sheets - in essence improving liquidity and reducing the risks associated with external debt finance. Stock management, supply chain management, effective credit controls, balancing fixed and variable costs; all these are ways of improving cash flow, which in turn creates options such as paying down debt, or making wise investments for the future.

Virtually every business can make liquidity and profitability improvements, both in recession and growth years, to build a sustainable business for the future and take advantage of opportunities as they arise. These are some of the themes we explore in programmes such as our business simulation "Apples & Oranges" - which comes in variants for manufacturing, service and retail sectors. Click here for more information.

So what exactly is window dressing

2010-03-26T11:23:00.001Z

Repo 105 has been making the news recently. Repo 105 is a technique used by the failed Lehman Brothers, under advice from Ernst & Young, to temporarily move some items off its balance sheet which it didn't really want there on key dates - the day in each quarter when its accounts are struck and made available to the world at large.

But repo 105 is just one way of window dressing that has been used to make a company's accounts look better at critical times - often on the one day a year that the accounts are produced. The very next day, we're back to where we were, but few external parties will ever know this - perhaps at least not until it is too late.

Understating what goes into a set of accounts, and the scope for judgement in how certain items - especially assets - are valued, is critical in making sense of financial statements. So in programmes such as Financial Awareness and Financial Analysis, we look beneath the apparent numbers and try to work out just exactly what is going on. Click the links for more details.

Football club finances: the gap widens

2010-03-25T09:46:00.000Z

Portsmouth enter administration and face relegation, whilst Manchester United's income grows as they progress in the Champions League and the Premiership. The gaps grow on and off the pitch. Where does all the money come from? In the recent Delloitte's annual Football Money League, Manchester United rank behind Real Madrid and Barcelona in the table of biggest money earners. For clubs like these, only 25-30% of the income comes from matchday ticket sales. 40% or so is from broadcasting rights, and the rest from commercial sales (hospitality, replica shirts, etc).

Football club finances are a real anomaly - players appear as assets - unknown in virtually any other company's balance sheet, the financial year-end reflects the football season and is related to contract dates with TV companies, and as clubs enter and exit the listed markets, more or less financial information becomes publicly available. In our financial courses we look at a range of different business types and help participants to understand the key drivers and influences in a business's finances. Have a look here at a sample programme.

The cost of an iPhone

2010-03-23T12:48:00.002Z

The cost of components and assembly of a 32GB iPhone 3GS is $170.70 (source: The Economist, January 2010). Based on current retail prices you can probably work out how much profit you think Apple makes on each of these. However, the company still needs to cover its costs of research, product development, marketing, patent fees, retailer costs, etc. An understanding of fixed and variable costs, and how these costs behave, is critical to the running of any business. A number of our finance courses develop an understanding of business costs. Have a look here at a sample programme, or visit our Business & Finance Courses page to see a wider range of programmes.

Whats the point in a SWOT without the ANALYSIS?

2009-11-13T10:14:00.006Z

Most business people know what a SWOT (Strengths, Weaknesses, Opportunities, Threats) grid looks like, indeed mos will have actually filled one in.

But completing a SWOT without any analysis is little more than recording on a 4 box grid stuff you already know.

So, what is the ANALYSIS all about then? Antone's Business Environment consists of three areas:-

The External Far - these are things that will have an impact on you, you cannot do much about them but you need to be able to react to them; think of the impact the smoking ban had on pubs and restaurants.
The External Near - these are a bit closer, you can influence these but not control them. An example could be your customers; how you price, position, market your offering are examples of how you can influence their spending habits
Finally, there is the area you do have some control - Internal. Examples here are the culture of your organisation or the skill sets available within your business.

Breaking down the SWOT - the Strengths and Weaknesses come from the analysis of your internal resources take a critical look at your:-

Style and Culture
Skills and Resources, and
Systems and Processes

The Opportunities and Threats come from your analysis of the External factors, a good structure for looking at the External Far is PESTLE (other variants include PEST, STEEPL):-

Political
Economic
Social
Technological
Legal
Environmental

And a tried and tested model for looking at the External Near is Michael Porter's '5 Competitive Forces':-
Where does the 'power' lie? Ask yourself about your level of vulnerability, is it HIGH, MEDIUM or LOW? For example if you rely on one supplier for a particular product then they, the suppler, has all the power and your level of vulnerability (to price rise or shortages) is HIGH.

Having done some detailed analysis you can now complete a SWOT and as likely as not there will be factors you would not have thought about had the analysis bit been missing!

the SWOT could be quite busy so its now all about prioritising,

what Opportunities can you exploit with your Strengths
do your Weaknesses make you vulnerable to any Threats
neglect a Strength and it could become obsolete, or a weakness
can you realistically do anything about your weaknesses or do you need to continually remind yourself about them?
could a Strength or Weakness be tweaked slightly to enable you to pursue an Opportunity?

Can something be both an Opportunity and a Threat? Yes, it can - think back to the earlier example of the smoking ban. sure it was a threat to pubs where people liked to smoke but it was also an opportunity to attract new customers who may previously have been put off by the smoky atmosphere.

Mike Newman
07899 728 628
mikenewman@xlearning.co.uk
www.xlearning.co.uk

Finance is incredibly dull and boring!

2009-11-06T16:07:00.005Z

Do you agree with this title? There is a good chance that a large proportion of you will agree with it. You are therefore, likely to start turning off now if we go into the nitty-gritty of finance, just like you do when faced with the monthly budget figures or having to go into the ghastly planning round. So we are not going to do that. Instead, we are just going to explore why you might feel like you do and put up a little bit of a defence for “Finance”.

Your response to the initial statement will be determined by a number of factors. Not everyone finds numbers stimulating. It may be that your logical mathematical intelligence is not the strongest and that you find figures harder, less exciting than those who are stronger in this intelligence. This is fine. No one has an equal strength or preference for each of the 7 intelligences (1).

Another reason for this perception could be that the way Finance has been traditionally taught does not lend itself to peoples preferred communication style. You know the scenario don’t you? An ex-Accountant stands up and talks at you about Accounts for a few hours. This may be very pleasing to the ear, but does little for those who have either a visual or kinaesthetic communication preference.

This style is even less pleasing for those with an activist learning style. In fact, it does not fit naturally very well with the other 3 learning styles either – reflector, theorist and pragmatist.

This all leads to the perception that Finance is dull, boring and hard. Therefore, it is hardly surprising that Finance has got such a terrible, and in our view, unjust reputation.

So why do we think it is unjust? Well, its simple. Believe it or not, there is a direct link between you and the finances of the organisation. Everyone, everywhere within your organisation is impacting the finances somewhere. Therefore, the more that you understand the basics then the better informed your day-to-day decisions are likely to be.

This provides the last point in understanding your perception of Finance, the one of “relevance”. Knowledge is one thing, communicating it is another, but understanding its relevance is another. We are going back to the traditional training syndrome here – good on knowledge, wavering a bit in terms of communicating it, absolutely no thought to relevance.

So what does this mean for you? Well, nothing mentioned above are insurmountable problems – all can be tackled so that you can become even more effective than you already are. Developing a thoughtfully put together programme will pay dividends both in terms of personal knowledge, changes in attitude and a tangible improvement in organisational profits.

If this is achieved then how could anyone say that finance is incredibly dull and boring?!!

Mike Newman
www.xlearning.co.uk
07899 728 628

(1) ‘Frames of Mind’ by Howard Gardner

Expenditure or Investment?

2009-09-03T11:53:00.007+01:00

Possibly the two areas of expenditure that get closest examination in troubled economic times like these are Marketing and Training. Is that because they are two of the easiest budget lines to remove?

There must be a reason, but attacking spend here is surely short sighted. With the customer / client base constricting is not marketing (in its various guises) the way to promote yours as the business to buy from?

Similarly with Training, in the absence of training people to do the right thing more often they are likely to keep practising bad, or inefficient, habits.

What is the cost of the lost opportunity compared to investment in training?

As someone once said;

"if you think training is expensive, try ignorance"

Measuring the return on training is essential but unless those doing the measuring understand the relationship between Risk and Reward, and how Return on Investment impacts profitability then it could be a case of garbage in, garbage out!

So, if we don't understand the finance terminology we cannot make any conclusions about the health of the organisation or a particular product or service. Speaking the same language enhances the chance of making the right diagnosis and reaching the right conclusions for the business.

If a doctor takes your temperature and it reads 39° then you know you should stay in bed because you are ill. But what if the Finance Director says the profit margin is 13%? What does that mean? Is the business healthy or sick?

Understanding Business Finance = Informed Business Decisions

You Do The Math

2009-08-10T09:21:00.006+01:00

This is the title of an article in the Chartered Institute of Personal and Development's July People Management magazine.

Basically the article is promoting the fact that it is no longer "possible to be a credible HR professional without knowing your numbers". True. But especially in today's climate knowledge of the numbers has to extend and permeate the entire business. Financial literacy, to a greater or lesser extent, is crucial for everyone in the organisation to understand that EVERY decision they make will impact the finances somewhere.

How can the workforce understand the management's seemingly obsessive behaviour about cost containment, (a euphemism for 'cutting'), unless they can see clearly how these actions can make a difference to not only business profitability and survival but even to them keeping their jobs?

The People Management article is informative, but sadly dull. It is kind of preaching to the converted in that if you are interested in the numbers you will already know this stuff. If you have made a career out of avoiding finance and accountants then you will quickly turn the page and skip to the next article, and miss out on some essential knowledge.

Financial awareness amongst staff is only going to increase if the environment is created for them to create their own learning, see the relevance, and address the "what's in it for me" stance.

If you are not a numbers person but appreciate the importance of the organisation's finances then i challenge you to get to the end of the aforementioned article.

If you would prefer interactive, enduring and fun learning then talk to us!

"When times are tough, you need people to think constructively and act decisively"

2009-07-27T15:09:00.008+01:00

Celemi have announced that Performance is now officially released!

The benefits include:

Creating broad, shared understanding of the key issues and factors that influence the business
Highlighting the fundamental importance of customer focus, and understanding customer needs
Illustrating how small improvements can have a big impact on the bottom line
Inspiring people to focus on what can be done, even when business conditions are tough

In this simulation, a case story featuring Fenix Inc. is used to drive the learning.

In three steps, the participants help Fenix Inc. to

“Get the basics right”,
“Create competitive advantages”, and finally, to
“Win the business”

The seminar, highly suitable for the current financial climate, brings a feel of “back to basics”, whilst being thorough enough to drive new learning.

At the outset, Fenix Inc. faces tough market conditions with decreasing demand and sharp competition, (sound familiar?), similar to conditions companies all over the world are facing as a result of the economic downturn. In times like these, it is especially important to encourage people to see the possibilities (what they CAN do), instead of focusing on limitations (what they CAN’T do). Throughout the seminar, participants draw parallels to their own reality, defining what their own company is up against and gaining insights about the way forward.

Celemi Performance runs over 3.5 - 4 hours, including time for participants to focus on their own company’s issues. Performance and can be used as a platform for a high-level strategy discussion with a management team, or similar group of decision makers. It can also be used as a vehicle for communicating corporate strategy to a wide audience, for instance all employees.

Up Up and way with the FOOTSIE

2009-07-23T10:54:00.006+01:00

The FTSE 100 index registered its longest winning streak for 16 years, in an eighth straight day of gains up to 22nd July 2009. A rise of almost 9 per cent since July 12, has added £90 billion to the value of leading companies.

Why do investors part with cash to speculate? What exactly is Shareholder Value?

The answers to these questions, and much much more, are key elements of our Finance Programmes where people explore how their actions when aligned with Corporate Strategy tick the boxes for Shareholders, delivering the much sought after value.

When the Workers are Shareholders too the factors delivering value are of even more interest!

BA Cash Boost

2009-07-22T16:21:00.001+01:00

British Airways have announced a couple of deals to bolster its cash balance and, as reported in The Times give it enough cash to continue operating until at least the end of 2010 despite heavy losses.

The BA Pension fund trustees have forgone £330m in guarantees – effectively tying up this amount in BA’s credit lines – in exchange, it is reported, for alternative securities later this year to reduce the fund’s growing deficit.

Additionally BA’s institutional investors have weighed up the Risk / Reward and shelled out £350m through a convertible bond.

Will it be enough? Time will tell.

BA to seek Investment

2009-07-17T09:53:00.002+01:00

Yesterday's blog mentioned British Airways and suggested that one way businesses can buy time to trade through difficult times is to seek investement. Looks as though BA are going down this route from today's news.

Easier perhaps for the likes of BA to go down this route but the principals apply for any size of business;

Can you find someone willing to take the RISK of investing in you because the REWARD, or Return, is a Risk worth taking?

Cash is King (and Jack and Queen too)

2009-07-16T16:40:00.005+01:00

Cash is always important, but sometimes its more important than other times.

Take the present economic climate; some businesses are finding their own customers are taking longer to pay, meaning, unless they are cash rich, they face a lack of funds to pay their own suppliers and overheads. The Bank overdraft may, or may not be available to plug the gap, if it is then its likely to be expensive. If that option is not available then pleading poverty has implications. Next time you need materials will your supplier want some cash up front? Will the employees morale be adversely impacted by their wages being delayed or cut? Given the state of the economy the staff are unlikely to leave – there is hardly a plethora of jobs around for them to walk into. So, falling morale, resulting in lower output can only exacerbate the issue; all because of a shortage of that valuable commodity – CASH.

What can we learn from a big hairy corporate like British Airways feeling the pinch? Between 31st March 2008 and 2009 BA’s balance sheet shows a reduction in the total of cash, cash equivalents and interest earning deposits from £1864m to £1381m. That’s £483m flowing out of the business as the 2009 figures reported a pre tax loss of £401m. BA’s management are taking action, they recognise that income is not going to recover quickly so costs have to come under the microscope. In June this year they announced that some 7,000 British Airways employees have volunteered for schemes in support of the airline’s cost reduction programme. Their actions are expected save the company up to £10 million. In early July BA’s pilots voted to accept a 2.6% pay cut . Redundancies amongst cabin crew and administration staff may follow, the former voting recently to reject plans to cut jobs and freeze pay.

So what should businesses feeling the credit pinch be reviewing?

Can you re-negotiate terms with the people you owe money to?
Can your customers pay you quicker? Is it economic to offer discounts for early payment, or accept stage payments to get some cash in quicker?
What about asking for discounts, that includes your staff, will they work for less to help you through any crisis? Is a lower paid job worth more to them than no job?
Do you have any obsolete stock that you may be able to offload to generate some cash (and save some storage costs)?
Do you have any liquid funds of your own to invest? Be cautious about throwing good money after bad. The Channel 4 series ‘GERRY'S BIG DECISION’ gives an idea of the due diligence involved in deciding if an investment is prudent

A certain amount of financial literacy is key, every decision everyone in the business makes has a financial implication but the truth of the matter is people rarely appreciate this. Finance training has a dull and boring reputation and is considered by most as best left to the accountants. Ignorance is no defence; www.xlearning.co.uk

Finance for Non Finance Managers

2009-07-14T16:38:00.011+01:00

The following article appeared recently on the 'Goals and Achievements' blog; http://tinyurl.com/lbc25m.

These Myths are more than that, they contribute to the mystique that surrounds Finance in the Business World and frighten people away from a subject that they will impact every time they go to work! Effective Finance for Non Finance training courses will dispel these myths and even make the topic interesting. Enduring learning can be achieved by making this - like any other training - interactive, engaging and relevant. The Celemi Business Simulation 'Apples & Oranges' http://tinyurl.com/krdtgx busts these myths as do our own programmes http://tinyurl.com/lqojc4

Would you expect a Dull and Boring Finance course to look like this? We prefer the 'Fun but Deadly Serious' approach!

"Finance for Non Financial Managers: 3 Common Myths

Myth # 1: You need to be good at maths
People often say to me when speaking about Finance that they need to be good at maths. Nothing could be further from the truth. Provided you understand simple arithmetic, things like addition, subtraction, averages, percentages and multiplication you have the base knowledge interpret financial information.

Myth # 2: Finance is complicated
Actually it is very simple. The vast majority of managers get a budget statement that will tell them:

Whether they are on target?
Whether they are behind target?
Whether they are doing better than target?

The key thing is to compare the budget (expected position) with the actual position and take action accordingly.

Myth # 3: Finance is for specialists
The recording of financial information, the creation of the systems for planning and management of finances is led by specialists. Financial management is the responsibility of every manager.

So what other myths have you come across when it comes to Finance?"

Strategy; Its a Mystery

2009-07-10T16:38:00.003+01:00

Just look at the many job descriptions you see in large organisations – isn’t it surprising how many contain the words “strategy” and “strategic”? Why does this happen?

Somehow the word “strategy” has taken on a meaning of self-importance. It implies gravitas. And the output from all these strategists does indeed involve the production of lots of strategies – marketing strategy, HR strategy, compensation strategy, reward strategy, pen utilisation strategy and lunch component prioritisation strategy, to name but a few.

What is going on?

Over-use of the word “strategy” is diluting its real meaning. Ask most employees what their business’s strategy is, and they probably can’t tell you. This dilution and lack of awareness has a detrimental impact on what the business is there to achieve – creation of shareholder value.

What does “strategy” actually mean?

The word is derived from the Greek strategia, which means generalship, and in particular the art of directing military movements. This strategy determines the broad thrust – how the war is to be won. Activities to support strategy are called tactics – from the Greek taktika – which means the art of manoeuvring military forces.

There is a very clear difference between a strategy – providing direction – and tactics – doing something.

So why does this distinction matter? In the corporate world, organisations need a strategy – one strategy – the business strategy. And they also need to know how to go about achieving this purpose, and how to organise and mobilise the corporate resources to do so.
And if everyone knows what the strategy is, then it will not be misunderstood, and it may lose its mystique.

What is a Pensions Black Hole?

2009-07-07T16:43:00.003+01:00

Regular stories appear in the news these days about organisations with Pension Shortfalls. Recent names in the press in this bracket have been The Royal Mail, British Airways, the BBC and ITV, but there have been loads of others.

Shortfalls have arisen because we are living longer and the funds, which pay our pensions, don't have enough money in them.

The crisis has its roots back in the Thatcher years when then Chancellor Norman Lamont restricted the amounts companies could put into their pension funds - the Government thought profits, and thus taxes, were being suppressed by over generous pension contributions! That coupled with the fund actuaries getting their sums wrong on our life expectancy have contributed to the void - the current recession and devaluation in equities has not helped matters.

Business Growth

2009-07-06T11:16:00.004+01:00

When recently attending a 'Smart Marketing' seminar run by Robert Craven from The Directors Centre www.directorscentre.com I was reminded of a simple framework for assessing the key areas in a business.

FiMO - Finance; Marketing; Operations.

Most people think they are OK about Funance, typically scoring their business at around 6 or 7 out of 10. Operations usually gets awarded top score, 8 or 9 but Marketing normally scores lowest. However, both Finance and Operations are a product of Marketing! Certainly reminded me of the importance of this element of FiMO.

Read more from Robert here http://robert-craven.blogspot.com

Financial Analysis Framework

2009-06-30T23:03:00.007+01:00

Alice in Wonderland, or Alice through the looking glass? How about Alice as a neat structure for analysing......
Assets
fixed, current (especially cash position)
Liabilities
term, current - are accounts payable (creditors) being paid?
Income
revenue, sales or whatever its called - growth?
Capital
how is the business financed?
Expenses
under, or out of, control?

Remember, good analysis is about asking the right questions!

Almost 7,000 BA staff volunteer for pay cuts

2009-06-25T16:52:00.006+01:00

When sales are stagnant, or even worse falling costs will come under the microscope, http://tinyurl.com/mymauh.

Why not try a Business Simulation for people to learn how reviewing costs and business process can have big impact on the bottom line. Take a look at http://tinyurl.com/kvmf68

Was the Risk worth the Reward?

2009-06-25T14:42:00.000+01:00

Parting with money comes with a risk, will I get value, does it do what it says on the tin? Plenty of UK local authorities had a nervous time when the Icelandic Banks they had invested in ran into trouble last year. They, and some charities http://tinyurl.com/nykgpl took a Risk because the Reward looked so attractive in terms of the interest rates on offer. With hindsight its easy but the old saying comes to mind "if it looks too good to be true then it probably is....."

An interactive Risk Reward exercise is a feature of all our Financial Awareness programmes http://tinyurl.com/lqojc4 we explore, using household name PLCs, the factors contributing to the Risk Reward decsion. Relating this to everyday business decisions generates some interesting discussions!