In Lord Sugar’s opinion, the recession should not make any difference to the timing of a new business launch. The decision whether or not to start a business should be based on sound business principles (supply and demand, financing needs etc.) regardless.

• His best bit of advice to start-ups was to keep a constant eye on the business and basic numbers, e.g. money in and out. Don’t get too bogged down in detail.
• The main mistake Lord Sugar sees small businesses making is getting stuck in a rut and not taking a step back to look at things strategically on a regular basis.
• His view of the credit crunch is that business finance is not as hard to find as most people suggest. If you are refused credit by your bank, take it as a warning that your business plan/model may not be good enough.
• When asked if he thought accountants made a positive contribution to small business and enterprise, Lord Sugar agreed with Sage’s survey that accountants are likely to be the first place business owners turn to for advice, in particular to help them take a step back and look at things strategically. Helping in dealings with the banks is another key area, e.g. interpreting their guidelines on lending.
• As for what makes a good accountant, Lord Sugar said that the best accountants are the ones that take an interest in their clients’ business and do more than just number crunching. He adds that many clients would appreciate a simple explanation of measures like debtor days and solvency ratios so that it makes it easier to understand what is happening in the business. The full text of the article is here .

I am not sure my experience of the banks is the same as Lord Sugar’s, but I completely agree that accountants must do more than just the number crunching to help their clients. At the same time there must be a willingness on the clients part to recognise the value of that advice and, of course, pay for it.

Please tell me what you think.

I don’t usually do book reviews in the conventional sense. I prefer to take the ideas from my recent learning and experiences and weave them into my own thoughts and blog postings. (Is that what some people call plagiarism?)

I am making an exception for this book because we are offering a limited number of free copies to readers of this page (see the end of this posting to see how), and I would not expect anyone to waste their valuable time on a book (free or not) without knowing a bit about it.

What’s in it?
The book contains 176 key messages, with empty boxed-off spaces in the body of the text for the reader to write in their actions. These messages are in categories such as:

• Tough decisions
• Get selling
• Back to basics
• Opportunities
• Invest

I think that the main value of the book is in the last two of these sections. There really are enormous opportunities for anyone prepared to take their blinkers off and take advantage of, for example, the much lower barriers to entry in existing markets that exist in recessionary times.

It was first written in 2008 and then revised and reprinted (twice) in 2009, so its topical credentials are good.

The bits I liked
Whenever I read books I highlight the ‘good bits’.  Here are the things that I highlighted:

1. Recession exposes poor working practices
2. Now more than ever, we need to be brilliant at the basics
3. The way out of recession is innovation
4. Get out of the spiral of price cutting now
5. Use students to get work done cheaply and well
6. Know the facts - measure and manage all the KPIs (Key Performance Indicators)
7. Use adversity to get your team to act like a team
8. Recruit for attitude now more than ever
9. Only sell to FANs (those with Funds, Authority and a Need)
10. Do ‘real marketing’ – targeting, segmenting, adding value at minimal cost etc
11. Communicate simply and effectively. The phone is better and quicker than writing, even if you have to leave a voicemail.

Conclusion
The book is subtitled ‘A blueprint for business survival’. Personally, I would have chosen something a bit more direct,  e.g.  ’Everything you should have been doing in your business anyway, and which the downturn will not force you to do’.

I think that if you are just setting out on your business development journey, or if you are already on the way but risk being blown off course by all the negativity around at present, this book is a great way to (re)focus on the right path.

Get a free copy
If you are a client of Kirkpatrick & Hopes and you would like a free copy, please contact Bernadette Brownlie or any of your contacts at the office.

We also have 10 copies that we are offering free of charge to non-clients on a first come, first served basis.  Please email mail@kandh.co.uk asap if you’d like one.

Once you have read it, please post a comment here to tell us your views.

In the last few weeks nearly every client I have spoken to has said that things are picking up for them, including the estate agents I saw today – they have had record weeks for potential buyers signing up and for lettings income!

My hope is that the media run out of bad news headlines and start reporting the more positive stuff that is actually happening in the real world.

I wish there were more of a commercial incentive for someone to shift mindsets of all of us. A few of the books I have read recently have definitely helped do this for me:

• Your Money or Your Life
• Affluenza

And to a lesser extent:

• Rich Dad Poor Day
• Go Giver

Have you read any of these? Would you like to discuss further?

Here are 7 reasons why you should look at the downturn in a positive light:

1. Problems or opportunities? Nearly every client I speak to in every line of business has been able to see a potential upside for their business. This creates a competitive edge for them as most business owners are too blinkered to see beyond cost cutting and working longer and longer hours IN the business.
2. Sustainability and the environment The need to save money has made us all much more careful about the resources and energy that we consume. I hope this is the wake up call that the developed world needs to save the planet and that this rubs off on the BRIC (Brazil, Russia, India, China) countries too.
3. Buy now, pay later (or never) culture My kids’ generation, as a result of their exposure to advertising on TV, internet etc, could be forgiven for thinking that it is normal for everyone to buy whatever they want on credit and simply write the debt off at a later date if you can’t afford to pay it. The idea that you have to save up to buy things seems rather quaint and old fashioned. I personally hope that credit (this sort anyway) gets even harder to obtain so that this cultural trend is reversed and my kids can grow up with a responsible attitude to spending.
4. Survival of the fittest There are too many bad businesses out there run by business owners who are classic “E-Myth victims” (as we call them in the office). During the good times they were able to do little more than survive anyway and the downturn means they are forced to close down. This is probably in the best long-term interests of the owners, who would otherwise soldier on working excessive hours and under unnecessary stress until death or retirement with little or no money.
5. The end of the “second hand” stigma The material benefits accumulated during the “boom” years will last us a long time. Most of these (houses, cars, electronic goods etc) are very durable and we will come to realise that they do not need to be replaced regularly- that was just what the marketing people made us believe to make us buy more. Just replace the words “second hand” with “recycled”! I have just signed up to the Freecycle web service and I am aiming to minimise the contents of my black wheelie bin even more in future.
6. Bargain hunting There are many great bargains out there, especially for cash buyers. This includes buying in talented new people for your business. Just don’t be tempted to buy for the sake of it (see point 5).
7. Finally, remember that it could be a lot worse Consumerism and excessive spending beyond our means was never going to be sustainable. We should be thankful that we have not come down with even more of a bang.

Those of you who are familiar with Affluenza will recognise that many of the issues above relate to the root causes of this illness. If this concept is new to you, I strongly recommend that you find out more (eg by reading the books Affluenza- The All Consuming Epidemic, which I have just read, and Your Money or Your Life, which is next on my reading list). I think there will be less Affluenza in our society going forward as a result of the recession.

Let us know if you can you think of any more positives.

Firstly, here are some of the main findings that I picked out of the RAN ONE survey*

As a result of the credit crunch these are the percentages of relevant businesses who said they “agree” or “strongly agreed” with the following:

63% – Harder to make sales
71% – Facing more price pressure
89% – Looking for increased internal efficiencies (though only 30% will defer IT expenditure)
59% – Expecting lower pay rises of staff
70% – Customers taking longer to pay
49% – Forecasting profits to fall
39% – owners giving personal security for borrowings
41% – businesses with no alternative source of funding
33% – staff/team concerned about the viability of the business

Some of the actions that come out of this are obvious (sell more, get cash in sooner, cut costs etc) and your inboxes are probably full of suggestions along these lines.

Here are some of the less obvious actions that you may be able to take and other useful opportunities that the above may present:

1. Does your business provide services/goods that may help others to make improvements in these key areas? If so, can you use data such as in the RAN ONE survey to help you quantify the benefits (in hard cash terms) of using your services?
2. If your team are concerned about the viability of the business, are you communicating with them to reassure them? Even if they have a good cause concern, they will probably have inflated how bad things are in their minds if you haven’t kept them informed.
3. Ask your team for their suggestions about improving efficiency and helping the business generally. Use the forum of regular team meetings if you don’t hold them already.
4. If business is slow, use the time this frees up to work more ON the business, eg writing systems, doing business plans, building the brand, training the team, etc.
5. Try increasing your prices! This is counterintuitive I know, but if everyone else is chasing the discount end of the market, maybe there are better opportunities at the premium end.
6. Don’t let personal pride get in the way of making hard business decisions like closing your business down. If you can’t borrow to prop it up, consider starting again from a much leaner base and possibly with a new business model.
7. To win new business, offer extended credit perhaps with interest charges built in to your pricing (but only if bad debt risk is minimal and if you are cash rich enough)

View survey results.

Please let us know how you interpret the findings and your opinions about what action should be taken.

The survey has been organised by the RAN ONE group, and international network of accountancy and consulting firms.

The survey takes about 5 minutes: Take the Survey.

See the results of the survey here.

Read Andrew Gray’s commentary on the results on his blog.