We’ve hit the National Borrowing Target!

News has filtered through and been hailed by economists this week that the UK government has managed to reach its annual borrowing cut target. What benefits could this bring to those who are looking to sell their business in the current economic climate?

National borrowing rates directly affect businesses. This is because, the more the country borrows, the more prices, taxes etc. go up. This effects a company’s bottom line and weakens their position when trying to persuade a potential buyers of the benefits that said company can bring to their own bottom line.

A Victory for the Budget

It has been reported that the nation’s government borrowed a sum totalling £107.7 billion in the previous financial year. This may seem a lot, but in fact it was significantly lower the £115.1 billion borrowed by the country the year before.

So what have the government set as the target for national borrowing rates? In the budget the Chancellor suggested that for the full year, the budget deficit should measure £107.8 billion. This means that not only has the national economy narrowed the gap, but it has done so by £0.1 billion than it expected to; always good news!

Specifically, the numbers quoted on the issue by the Office of National Statistics (ONS) suggests that leaving out fiscal interventions, borrowing fell from £11.4 billion in March 2013 to £6.7 billion for the month this year. Furthermore February’s data was revised from £9.3 billion to £8.8 billion.

A Psychological Boost

Figures like these have both physical and mental effects for UK economic growth, and one is as important as the other. Howard Archer, chief economist at analysts Global Insight commented on the issue:

"While in reality, it made little difference whether the chancellor just hit or just missed his fiscal target for 2013-14, the fact that he did make it provides a psychological boost for the government and it may support belief that he can hit his longer-term targets."

At RTA Business, we recognise that the psychological effect this will have on buyers will help you in your quest to sell your business. It will further convince them of the sustainability of the economic recovery, which will give them more incentive to expand by buying your business.

How Can You Effectively Handle Customer Complaints?

Customers with a grudge are like a nightmare you can’t wake up from when you’re looking to sell off your business. They’re there, always looking to discredit you, and it makes it that much harder to find a buyer. How can you effectively handle customer complaints so that the problem doesn't snowball?

The customer complaint is such a delicate balancing act. If you’re too lax with them, if you don’t address their concerns, they can get angry and angry customers tend to take to social media accounts and blogging sites to vent said anger. If a potential buyer sees that, you can forget selling them your business.

However if you’re too attentive to the customer then it can be just a harmful to your business model. The customer can be too demanding and that uses up valuable time and resources that you could use to increase your profitability in other areas. So how can you avoid either conclusion?

Customer Care: A Balancing Act

It really is a balancing act and there are some steps you can take so that customer complaints don’t hit your ability to sell your business. Start by training up your staff. Let them know what to expect from customer complaints and how you would like to handle it. Run some workshops so they can get a feel for the experience.

It’s also important that you empower your staff. It’s all a self-confidence game and you need to think of it like you would parenting. Kids don’t respect weak parents who let them get their own way – they also don’t respect parents who have to shout to claw back their authority. Complainers work in the same way. Empower your staff so that they deal with customer complaints calmly and collectedly.

The next point to make is clarity. You've always got ask customers to clarify the points they are making. Mistakes are most often made when the staff member and the customer get their wires cross, and this sets the customer off. It’s such an easy problem to address as well, just encourage your staff to ask for clarification on anything they are unsure about.

The final way to effectively handle customer complaints is to make sure that your staff know how to speak to customers. Here are some tips to pass on to your staff so that they minimise the risk of offending customers:

• Be Polite: Be polite at all times, nothing makes a customer angry like an impolite staff member; it makes it look as though you don’t care about their complaint
• Be Respectful: Your staff are representing you, they are professionals and they need to act as professionals. Using slang term, address customers by nicknames, that sort of thing, implies that your staff neither respect the customer or the company they work for. It makes you look unprofessional.
• Be Nice: It may seem insignificant, but it really isn't. Warmth attracts warmth. If your member of staff is nice to talk to, if they’re open and professionally friendly, the customer is a lot more likely to feel as though they can behave in a cooperative manner to address the problem at hand.

Crafting an Effective Business Leadership Style

If you ever hope to sell your business, you need to make it attractive to potential buyers first, which means you need to show its capability for profit and expansion. One of the best ways to foster these qualities in your business is to craft an effective business leadership style. So how can you go about that?

There’s an old saying that applies here; cut off the head and the body will follow. The head of the company is vital to its success; they are its face, its decision maker, its resource provider etc. Everything falls apart if that leadership is taken away.

From this we can also argue that a business has no hope of ever becoming profitable if you don’t craft an effective leadership style. For those people who have never been in positions of leadership before, this can be a tall task. This is why RTA Business Consultants has compiled this list of top tips you can use to become an effective leader.

Delegate

No man is an island and no one can ever do it alone. This is why you need to learn how to delegate. Effective delegation proves that you trust your workforce and that you rely on them to help grow your business. It creates a more positive work environment and increases productivity.

Think About Who You Hire

In order to delegate you need to make sure you are hiring the right people. One person who fulfills the job specification is worth ten people who partially fill it. Look for people who are problem solvers and who you can work with. You can only be an effective leader if you have the right ‘tools’ to work with.

Express Yourself

One of the worst offences you can make as a boss is to present your expectations in an unclear way. It slows down productivity, lowers your profit margins and makes you look like a weak leader who isn’t capable of communication. Always be clear with what you expect from employees.

Foster Respect, Not Friendship

Whilst you want to have a good working relationship with your employees, you don’t want to get too pally with them. At the end of the day, you are the boss, and establishing a certain professional distance reminds your employees of your position within the company. If people think you are a push over, they won’t listen to you.

Open Your Ears

We can’t stress this enough, always listen! Think of it as a creative process. Your employees bring fresh experiences and perspectives to the table that you can use to expand your business. They might know something that you don’t, or they may have an insight that you haven’t considered. 

UK Productivity Is Picking Up but Has Long Way to Go

It’s been a grim few years for the UK productivity rate as the recession has hit every part of UK business, right down to the average worker’s hourly output. Good news then this week for the business community, as UK productivity rates are beginning to show signs of life again. What could this mean for you if you’re looking to sell your business soon?

Productivity refers to, literally, how productive your workers are. Productivity directly affects profit margins, which in turn affects your ability to sell your business. The recession hit productivity because it hit the resources workers had to carry out their jobs with. That’s why the recession wasn’t a great time for the business acquisition industry.

The economic recovery has been such a relief for everybody. A stronger economy means that more resources are available for workers to use to help expands the profitability of your business. However it also led to a rapid rise in the employment rate and one consequence was a sharp decline in productivity numbers.

So what are we dealing with here? This week productivity started to grow again, as the rate of output per hour grew by 0.3%. This figure highlights the fact that Britain has faced a productivity problem for years; rising employment in the wake of the financial recovery has led to a rapid decrease in productivity. However we could be clawing our way out of it.

The issue is that productivity is still 3% below 2008 levels and 21 percentage points below the average recorded for other G7 countries. The widest gap since 1992, the slight recovery of output numbers disappointed many in the finance industry and highlighted just how much work we have left to do.

The Financial Times reported Philip Rush, an economist at Nomura, commenting on what the figures mean. Rush said that “It was a small pick-up in productivity, one that disappointed even my pessimistic expectations.” In fact the economy expanded slightly faster than the rate of UK productivity and this is a problem we need to address if we wish continue to recover from the ravages of the recession.

So RTA Business Consultants asks, what does this mean for you if you are looking to sell your business? Productivity is essential to any business model, and you can’t grow your business without it. These figures show that, yes, productivity is picking up, but there’s a long way to go. If you are thinking about selling your business right now, productivity is something you need to be thinking about. 

Can You Predict a Financial Crash?

A key component in selling your business is deciding when the right time to do so is. This means you need to know when the economic climate is right to sell. Saying this, is it possible to predict a financial crash?

The 2008 financial crash was devastating; markets plunged, companies went bust, loans were called in. It’s a nightmare that we’re only now just recovering from, and most people didn’t really see it coming. It was pretty bad for business acquisition.

This was simply because nobody wanted to buy a business after the crash; everybody knew a recession was coming and that it would do them more harm than good to buy a business at that point. This is why it’s useful to be able to predict a financial crash; if you don’t then you might leave it too late to sell.

So is it possible to predict a financial crash? Not really; there are too many variables and too many opinions out there that could lead you to make a fatal misstep. However there are several steps that you can take to make yourself aware of trends that could lead to a financial crash.

To begin with, you have to keep track of markets. Obviously, the world’s economy depends on the markets. When we talk about a crash we talk about the markets crashing, so when they do, if you don’t know about it you’re going to be caught off guard, which could disadvantage you in a number of ways.

It’s also essential that you keep track of current affairs. What’s happening in the world effects market prices. For example, the current Ukraine crisis is affecting Russian stocks. Therefore if you have business dealings with Russian companies, it could affect your profit margins. It’s useful to know what the ramifications of current affairs may be ahead of time so that you can act to limit the damage.

It’s also useful to keep market bubble and bursts- when a product saturates the market and ends up losing value - in mind. Take the tech boom early last decade as an example. So many people were buying into tech that it flooded the market, no one needed it anymore and it lost value almost overnight. If you trade in a product that is part of a bubble market trend, keep track of when that bubble might burst.

At RTA Business we realise that predicting financial crashes is an inexact science at best, a nightmare at worst. However it is possible to at least recognise common trends that may lead to a market crash; it’s all about keeping yourself informed; a key principle in any business model.

What Should You Look For in an Employee?

A business is nothing without the employees on its payroll; it sinks or swims due to the people who engage in running said business. This is why it’s essential to have the best possible team running your business. So what should you be looking for in your potential employees?

When you interview for a new position it can feel as though you’re lost in a sea of applications. You’ve sifted through the CV’s and weeded out everybody who’s made a spelling mistake or obviously lied about their experience, and you’re left with a talented crop of interviewees.

With more people than ever trained to degree level or equivalent, you have a whole host of potential employees to pick from. You don’t know where to start, but you know you have to get it right if this employee is going to be an asset to your business.

This is why you should be looking for personality traits. You know what experience the applicant has, however you can only assess whether their personality will be a good fit for your company face-to-face. So what personality traits should you be looking for?

The first is obviously intelligence; however this intelligence should be tempered with common sense. You need an intelligent employee to handle the work, but with the common sense to recognise when they should take things on their own initiative.

Measure this by talking about current affairs and seeing what insights they provide. This not only allows you to measure their intelligence but their understanding of the way in which the world we live works; therefore you get a fair measure of their common sense too.

Another key trait is ambition. Ambition may eventually prompt that employee to leave your company, but it will drive them to do the best job they can whilst with you. Measure this by asking them about their future ambitions. It’s also a great measure of honesty, as this is a notoriously difficult interview question and those with less integrity are more likely to deceive.

Kindness is another personality trait that you need in an employee.  It may seem an odd one in business, but it works in relation to office dynamics. This person is going to be in your office all day, every day, and if they’re the confrontational sort, it will have an effect on office harmony; which will in turn drive down office productivity.

The interview process is one of the toughest parts of owning your own business; however it’s also essential to growing your own business and attracting buyer. At RTA Business we really do know that any company is the sum of its parts, or in this case, employees.

The Importance of a Credit Report

When it comes to selling off your business there are few things that are more important to the process than conducting a credit report. Why do you need to do this and what can it bring to a business sale?

At RTA Business Consultants, one of the country’s leading business acquisition services, we recognise that confidence is key on both sides when you are selling a business. You have to be confident that a buyer has the funds to go through with the purchase and they have to have the confidence that your business will benefit them financially.

This is why you should not only carry out a credit report on your own company, but on theirs too. A credit report is a report that you can obtain which details your credit history. It details accounts, loans, missed payments, jointly held financial agreements, publicly available financial records etc. Normally they are used to ascertain how likely a company is to uphold financial agreements.

There are several services that provide a credit report. Prices for such a service often vary, but usually it clocks in at around £15. However depending on the price the level of service you are provided varies. Look around and conduct some internet researching to find the service that most suits your needs.

It’s easy to see you would want to request a credit report for a potential buyer of your business. You are depending on the buyer to uphold their end of the bargain and a credit report tells you whether they have a history of doing so or not. It provides security and shows that they are trustworthy. It’s insurance.

However it’s not always  so easy to see why when you are selling your business you would conduct a credit report on the business itself, as you might not have a perfect credit history, which is common for small businesses as they’ve gotten started.

However you have to think about it from the buyer’s perspective. They know that no business is perfect and they don’t want to be lied to. Providing a credit report shows them the true state of the business and shows them that you re honest and that they know what they’re buying.

At RTA Business we recognise that when you are selling your business you need to be prepared. Investing in credit report means that you know what you are dealing with and how to proceed.