Back to Work?

Political pundits have been breathing sighs of relief that the UK economy is not back in recession. Whilst this is self-evidently good news, is it true in reality? Looking at retail figures and the number of empty shops in even propserous towns; looking at the near-impossibility of young people and those being chucked off IB finding the jobs they may want; and considering the economic state of those companies to which our SMEs are supposed to direct export efforts, and it is hard to see that we are anywhere but in recession. Yet Government persists in expecting SMEs to recruit more apprentices and staff. As a long-term advisor and mentor to SME owners, I would have to be painting the attractions of anything but doing this. Cash-flow is what will put companies out of business; and is heavily determined by the level of fixed costs they carry. Increasing staff costs is about the last thing they need unless they have sustainable growth expectations. Some do, happily; but most do not. SME owner should do what they would do at home in tough times and live within their means, ignoring Government.

Guardian Letter 050811

http://www.guardian.co.uk/society/2011/aug/04/false-economy-of-cutting-charities

Size does not matter

When it comes to business literature most focus is understandably on big companies and how brilliant they were to get where they are. How relevant are these books and articles to small, life-style businesses? In short, surprisingly so. Although to mimic some behaviours is impractical for SMEs lacking as they must the critical mass of resource to do everything done by larger companies, the principals which guide success are common to any size of business.
All need to differentiate themselves from competitors. All need customers, usually in categories suited to the company’s products. All need financing, preferably by revenues. All need means by which to communicate effectively with those who influence their sales. And so on. Because an SME works on a different scale to a multi-national the complexity of these issues is less but the issues are still there. So the management, often embodied in the owner acting alone, has to have a grasp of all of the issues and needs the skills required to address them. That is the big challenge for an owner-manager – s/he has to be far more versatile than a silo specialist in a corporation. So keep up the reading and absorb more from the specialist support available, I suggest.