Nestle To Pay All Contractors a Living Wage

Following on from last week’s impassioned RTA Business argument on the living wage, this week, Nestle have agreed to do so!

 RTA Business: The Business Sales Broker You Can Trust

When you decide it’s the right time to sell your business, and if you want to make sure you make as much money as humanly possible, you need to come to RTA Business. We have the expertise, the contacts and the knowledge, to make sure we can attract the best potential buyer to your business.

We’ve often found that a buyer who is looking to purchase your business to expand, factors the quality of your staff into their decision. That’s why we’ve previously argued that if you’re looking to eventually sell your business, you need to pay all your staff a living wage- it’s the most effective way to attract the best talent!

It Seems Nestle Have Been Reading Our Blog

And it seems as if one major company has been reading the RTA Business blog (ok, so they probably made their decision before we wrote the article, but a business sales broker can dream), as world’s largest food producer Nestle has announced that it will become the first major manufacturer to pay all its staff a living wage.

When it comes to this issue, Nestle is already ahead; they currently pay their 8,000 employees a living wage. However, the firm has now agreed to extend the policy to their 800 contractors. It will be fully implemented by the end of 2017.

Nestle Cares and Prospective Employees Will Like That

Fiona Kendrick, Nestle UK & Ireland chief executive, spoke out on the announcement. The BBC reported that Kendrick said: "As a major UK employer, we know that this is the right thing to do. Not only does it benefit our employees but also the communities they live and work in." 

Imagine how attractive Nestle will seem as an employment prospect in light of this. They clearly care about their employees and you’d be surprised how attractive a caring boss is as a potential boss. You can be sure that Nestle, in light of this announcement, will have its pick of the best contractors by the end of 2017. 

The moral of the story? There’s a reason a company as gigantic as Nestle have embraced the living wage, and that’s because it makes them more competitive than ever in the employment market. If you want to attract the best talent to make your business look more attractive than ever to an eventual potential buyer, take your cue from Nestle and implement the living wage. 

The Benefits of a Profit Boost!

Sometimes in selling your business, milestones mean everything. When you announce major profit gains, it can make your business look so much more attractive to a potential buyer and this week RTA Business Consultants outline why.

It’s an obvious conclusion to reach isn’t it? The more profit you are making, the stronger your business, the more opportunity there is for growth. Even then, there are levels of degree when it comes to how influential profit margins are with potential buyers.

The Differing Benefits of Profit

There are two types of profit boost- gradual and spontaneous. Both have value in any strategy to attract a buyer to your business. A gradual rise in profit margins suggests a long term business model that is perfectly positioned to make money sustainably. This is an attractive to a buyer because it shows them that purchasing your company will provide them with a secure opportunity to grow their own venture.

The benefits of gradual profit rises are obvious, however the benefits of spontaneous profit boosts are not to be ignored either. A company will see a spike in profit levels usually after the introduction of a new product or service that has diversified their business.

There are benefits to this type of profit rise too, and it all relies on timing. Timing is a key issue – when is the right time to sell your business? If you put it on the market just after a profit spike, it shows buyers that now is the perfect time to buy your business and capitalise on your heightened profit capability.

LG Electronics: A Case Study

We can see how this plays out in the case of LG Electronics. The technology company recently reported a profit jump of more than a staggering 300%! Consequently net profit at LG Electronics measured 93 billion Korean Won in the first quarter of 2014. It stood at 22 billion Won the previous quarter.

Notably, this profit boost came at a time of great change for the electronics firm, as strong demand for its smartphones and TV’s were responsible for sales. Plans to expand its product range and introduce its new G3 smartphone later this year are set to keep profits high.

It’s important to remember that because of this news, LG shares rose 2.9% to 71,000 Won in Seoul this week. We see a direct correlation – a bump in profits made the company much more valuable in the blink of an eye.

If this exploration of profit margins should remind you of anything, it’s that timing is everything when you are looking to sell your company. At RTA Business we always suggest waiting for the time you can make the most money from selling your business.

Global Economy Hits Turning Point

The World Bank has announced this week that the global economy is at a “turning point” in the face of stronger global growth forecasted for 2014. What does this mean for the industry of business acquisition?

RTA Business has learned that this week the World Bank, the overarching global banking regulator, released a report on the state of the global economy. Specifically it highlighted forecasts stating that richer countries are “turning a corner” in the wake of the damage caused by the financial crisis.

This is expected to have a knock on effect on developing economies, as strengthening western finances should facilitate stronger investment.

However the World Bank warned that growth prospects in such economies “remained vulnerable“ to the expected ramifications of the withdrawal of the economic stimulus package by the US Federal Reserve.

The stimulus package was a programme set in place by the US Federal Reserve to shore up the country’s economy in wake of the 2008 financial crisis. It involved bond-buying and aided in the development of emerging economies such as India and Brazil.

However, stronger US job growth saw months of speculation on when the scheme would be tapered back; this had ramifications on markets across the world. Now the Reserve has started scaling back its monthly bond-buying scheme, which was formerly set at $85bn (£52bn) a month. This has caused fears that it could see global interest rates rise, which could alter the flow of money in and out of emerging markets.

In an article for the BBC World Bank group president Jim Yong Kim commented on the affects this could have. He commented that "growth appears to be strengthening in both high-income and developing countries, but downside risks continue to threaten the global economic recovery."

He elaborated on this, saying that "the performance of advanced economies is gaining momentum, and this should support stronger growth in developing countries in the months ahead. Still, to accelerate poverty reduction, developing nations will need to adopt structural reforms that promote job creation, strengthen financial systems, and shore up social safety nets."

So what does this mean for the industry of business acquisition? A strengthening economy naturally means that more people will be willing to sell their businesses as prices rise. This will lead to a stronger, more robust market. These suggestions, if governments decide to set them into place, could also foster a more beneficial environment for business acquisition.

What has been clear for a while is that the world is moving out of the Great Recession and into sustained recovery. However in order to sustain this recovery we need to be cautious.