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BUSINESS ROUND TABLE: Are we really out of recession? - VIDEO
ARE we really out of recession? That's the question we put to business leaders at the latest P&A sponsored Star Business Round Table meeting. Following the announcement of a 0.1 per cent national economic growth, we asked this month's Business Round Table:
VIDEO: Press the play button to watch video coverage of the P&A sponsored Star Business Round Table meeting
Here's what business people said in answer to our question - are we really out of recession?
Ken Davies:
"I've been in commerce for about 25 years. Are we out of recession? In my opinion, no. We've still got difficult times ahead.It's going to be another tough year."
Jeremy Priestley:
"I think 2010 is going to be tougher than 2009 and that could run into 2011. Much will depend on how the Crown handles the significant Crown arrears."
Jerry Lampson:
"I suspect we are not out of recession. The figure is microscopic and subject to review anyway."
Glen Marshall:
"Revenue assistance has helped our clients keep out of recession, the question is whether or not they will continue to help. The big questions with a new government coming in are: how will it reduce the deficit and how will that affect the local economy?"
Malcolm Roberts:
"The cosmetic spin figures have been produced for a reason - there's an election coming up etc. It will be a difficult year."
John Kawalek:
"I believe that we are a long way from recovery in many ways. I think we've got two years of hard slog ahead of us and that the real recession will hit after the general election."
Derek Long:
"I'm worried there'll be a double dip. I've a nasty feeling there will be another dip ahead."
Andy Preece:
"We are not out of recession. Most of our clients struggled to get through last year and their aim now is to get through this year - if they can. Lots of things have impacted on business in the last 12 months."
Andrew Eyre:
"I'm sceptical about the figures. 2010 is going to be a very difficult year. I've been looking for green shoots for the best part of three years now. I'm very negative at this time about the economy, the government and who will lead us through this mess."
Nic Morton:
"Cash flow is going to be a challenge but at least there's a glimmer of hope."
What advice would you give to anyone starting a new business?
Glen MARSHALL:
"Cash is king. People setting up a business have to get to grips with cashflow from day one. We see people take on too many overheads that are not sustainable until they've got the business to sufficient size. They need to plan what their income levels are going to be for the first 18 months and keep costs down to that.
"It's about having the discipline to put that in place and a system in place to record it. They need a financial system so they know exactly where they are on a day-to-day basis, so they can chase debtors and plan ahead. They need to monitor their cash flow."
Andrew Eyre:
"It really is stripping back to basics. The last year has been one of the most difficult in our 130-year history. You need to cut your cloth accordingly. We've had to be brutal and some relationships that have been strong for a long time have been tested because we've had to give people bad news."
KEN DAVIES:
"We work with 400 start-ups a year in our Sheffield office. There are two key things that we see: a lack of professional advice and business plan. They need to think of what could be just around the corner that could tip the business over. Start-ups see no danger. The market place shifts - what sells at one time doesn't sell in a recession. The secret to getting it right is good advice and planning."
Jerry Lampson:
"There's been a lot of emphasis, particularly from the government, that it's never been easier to start a business, just as it's never been easier to go to university. But not everybody should be starting a business. I feel there's a lot of people being encouraged to do it when they shouldn't be. It looks good when you take those numbers off the unemployment figures.
"People may dream of building their empire and think they're free at last. But then they realise they are not free - you have to work like hell to make sales."
Nic Morton:
"Any new business has to take time to sort out lines of credit. It's important that anyone starting out should take advice - and build up a network of advisers. It's not in advisers' interests to encourage people to start a business if they are not up to it. It damages their credibility.
"Yes, we've got targets but it's not in our interests to see people and send them to a bank, only for the bank to say they've not a hope."
Jeremy Priestley:
"I think the biggest problem is that there's lots of advice, a lot of it free. But there are a lot of people who jump in feet-first without any structure. Some are lucky and it works out for them but others try to put right the wrongs they've already committed and run out of cash. If they took time at the outset to get a business plan right, they would probably be more successful.
"Perhaps they have been successful as an employee and think they can earn the same working for themselves. But as a start-up they should leave the cash in (the business), to build up a cushion."
Malcolm Roberts:
"The big idea of going self-employed is that you can earn more and that it will be easier (than being employed). They don't realise it's 24/7 and there's a lot more involved."
John Kawelek:
"Finances are hard to get hold of so you have to be more savvy in your approach. It seems to me, you have to put your proposals in a tighter form to financiers - you have to be more clear about your USP - your uniqueness in the market - and you have to have the right ideas and right execution.
"We (at the university) are trying to innovate in a variety of ways. In my opinion there are three core lead skills sets that we need for UK plc: leadership, problem-solving and entrepreneurial skills.
Andrew Throssell:
"A lot of people set up in business and forget there's tax to pay. We know the Revenue is going to be harsher - so people have to be able to plan for tax.
"Conversely, there are some benefits to take from the current situation. There are empty properties to rent at competitive prices, stationery is more cheaply available and staff are available."
Andy Preece:
"When we see a new-start business, the things that are often lacking are a sense of realism and a lack of understanding of profit. They talk non-stop about turnover and not about profit. Sometimes the advice they've been given is shocking. It's important that start-ups see the right peoplewho have a genuine interest in what they are trying to do - and give them the right advice.
"For example, when we look at a business plan, it may have turnover and profit the same for every month. But that's not how business works! Cash flow is the key to everything. People should assume the worst is going to happen and have a contingency. That's the mindset all businesses - new or existing - should get themselves into."
Derek Long:
"I wonder whether schools are doing enough? In Leicestershire, they have enterprise for schools and students are mentored by business people."
Jerry Lampson:
"We produce a website for the BiG Challenge which is open to schools here and there are some decent top-end business people filtering their thoughts down the process. It's very lively and great fun but one thing you notice is how many pupils can't spell. They've got some good ideas but, if they put a CV together in two or three years' time, they're not going to get very far. There needs to be some basic underpinning at education level - but that's a whole other story."
Is this a good time to start a business with a general election looming and cutbacks on the way? What are the no-nos?
Malcolm Roberts:
"If you are in salaried employment and want to leave (to start your own business), you should think long and hard.
"But most people start businesses because they are unemployed. For people willing to work at being self-employed, there's still a good living to be made out there."
Glen Marshall:
"People should go into a business where they have the relevant skills.There are still markets out there for people who have done their market research. In some areas, it's a good time to be selling."
Jeremy Priestley:
"There will be some good commercial opportunities in the next few years. It's about people going into something because they know what they are doing, not just because they've been made redundant. There are people who are going to make serious money out of this downturn."
Ken Davies:
"Some of the most successful businesses were set up in a recession. Five businesses to do so are Microsoft, Tesco, General Electric, Burger King and Dyson. If nobody did anything in a recession, these five top businesses wouldn't be here today."
Andy Preece:
"It's not widely understood (by businesses) just how much money is still available. In the press, it's been almost as though the whole world has stopped and no money has been available but, in the independent sector, we are still lending money. There's a wider choice than people realise."
Nic Morton:
"We've witnessed a sort of apathy to people looking for finance. In the public sector, we expected people to be queuing up to borrow money and it didn't happen."
How much are banks expecting new businesses to put on the line?
Andy Preece:
"I think there has to be a sense of realism. The financial world got completely out of skew and money was too easy with little security required. It became volume-driven and the one good thing from this recession, I hope, is that it's brought a sense of realism that businesses are going to need to pay to borrow funding from banks or the independent sector. People have to look at it sensibly. If someone is going to lend you money, you have to be prepared to show your commitment as well."
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Thursday 24 May 2012
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