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UK firms ramp up investments amid Brexit worries  

British businesses appear to have shrugged off worries over the Brexit vote, increasing investments by a rate of 0.9 percent over the last three months, according to official government data released on Friday.

Earlier this year, the pound plunged after the Brexit referendum results became clear.

Economists expected the resulting inflation to slow down UK’s economic growth, but the latest data from the Office for National Statistics seem to be showing a different picture.

The increase in capital spending, which helped push the UK economy forward, beat earlier expectations of a 0.6 percent increase. The growth projection was based on a poll of economists conducted by Reuters.

The rise in investments was supported by a rebound in British exports as well as a sizeable increase in household spending, the ONS said in its report.  Overall, Britain’s economy nudged higher by 0.5 percent three months following the June referendum, where the vote to leave the European Union won.

The ONS, however, cautioned that most of the investment data covered by Friday’s report probably included expenditure decisions made prior to June’s vote.

Meanwhile, a separate survey by the Confederation of British Industry shows that UK retail sales likewise trended positively, rising at its quickest rate in more than a year in November. Experts project strong consumer spending to continue until the fourth quarter, driving economic numbers up.

While big firms such as Google, Facebook and Nissan have indicated their intentions to invest in Britain despite the uncertainty over the decision to leave the EU, recent surveys show that smaller companies are holding back plans for capital spending until economic outlook improves.

Anticipating a slow down in private investments in digital infrastructure, transportation and housing sectors in the near term, finance minister Philip Hammond said this week that his office will be borrowing 23 billion pounds to fund investments in these sectors over the next five years.

If you are unsure about your business’s financial future following the Brexit vote then please get in touch. At Assured FD Services we have over 20 years expertise working as a full and part time finance director for companies across Leeds & Yorkshire, aswell as the rest of the UK.

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Thinking Of Expanding Your Business?

Once a business is established and making a profit on the products and services sold, it is only natural for a business owner to begin thinking how to manage and bolster growth. It can be an exciting but challenging time – protecting what you already and building upon that with minimal disruption to it is the key to successful expansion. It is also important to remember that there will be areas of opportunity to reduce costs and increase margins as a business develops, so capitalising on these will be key to maximising your success.

It is important to understand the types of business growth and the methods you may wish adopt to achieve it. It is in the interest of the government is encourage and provide support for business growth, as it benefits the economy overall, therefore they themselves have offered an overview and guidance on the topic. The following article can be found on the government website.

Growing your business

Once your business is established and you’re making a profit on the products and services you sell to customers, you may want to start thinking about how to grow.

Many businesses think of growth in terms of increased sales, but it’s also important to focus on how to maintain or improve your profitability.Things you can do to help grow your business include:

  • looking into ways of increasing your sales, both to existing customers and new customers
  • improving your products and services by researching and testing changes with your customers
  • developing new products and services, and selling them to new or existing markets
  • taking on staff or training your current staff, including working with apprentices and mentors
  • looking for additional sources of funding, such as bringing in new investors
  • thinking about selling your products or services online
  • work with a business mentor, who can help you think about how to do all of these things

You can find more information here.

In the following article, Sarah Willingham, owner of MizMoz, Craft Gin Club and MySupermarket, offers her insight from her personal experiences of business growth, and how to best approach the challenges of expansion.

Ready or not: what to do about expansion

Achieving success is front of mind for entrepreneurs when embarking on a new business venture. The initial stages can often be expensive and time-consuming, and business owners naturally want to see that the investment they are making will have a quick return.

Often, it is the idea of expansion that business owners find particularly challenging to navigate. To help with this process, I’ve developed a series of tips to help entrepreneurs recognise when the time is right to move into the next phase of their journey and overcome the barriers to growth to reach their full potential.

Expansion means different things to different businesses. For some it would be adding another shop to a chain, for others it might be starting to operate online. Whatever the goal, it often doesn’t come cheap, and therefore getting help from investors could be key to your success. To get new investors on board, you need to articulate three things: who the business is aimed at, why consumers would buy from it, and why you, as the business owner, are the person to make it work.

Often, it is the idea of expansion that business owners find particularly challenging to navigate. To help with this process, I’ve developed a series of tips to help entrepreneurs recognise when the time is right to move into the next phase of their journey and overcome the barriers to growth to reach their full potential.

To read the full article click here.

Sarah has offered some helpful information relating to her own personal journey of business expansion. Experience in priceless is these situations, so you should surround yourself with the right people and the right advice. You could even consider the services of an interim FD to guide you through the process.

If you are a UK business looking to grow, but are a little unsure about funding options, the government offers grants and loans to those who meet a certain criteria. You can click here to find out what funding schemes you may be eligible for, but I would also suggest contacting your local expert.

I would like to finish out with a summary made by Sarah Willingham.

Ultimately, in every aspect of success – from setting up, to growth, to ongoing innovation – the most important advice I can give is to listen to your customer. Find out what works best for them, and how you can meet their needs. There is no substitute for loyal, engaged customers who feel valued. Then prove your commitment by adapting your business. Only by getting the basics right first, and always keeping customers front and centre, can businesses achieve lasting growth and take that next step

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Auto-Enrolment for Small Businesses

A commonly held perception is that pension schemes for staff are only required for companies with a lot of employees and a high turnover. However, by virtue of the law passed in 2012, auto-enrolment into a company pension scheme is mandatory for every business type, be it on a big scale or small. It is obligatory that every employee of the company has the facility to be a member of a pension scheme.

There has been a hefty amount of penalty and fines imposed if the business owner fails to fix up the auto-enrolment scheme for their staff.

Based on the issued rules and regulations, the daily fine charged can range from £50 to £2,500 based on the total number of employees.  Recently, PayCircle estimated that UK businesses could face fines totaling £22 million in auto-enrolment fines.

View this short video from the Pensions Regulator about Auto Enrolment for employers.

If you require any assistance or guidance on setting up a pension scheme arrangement within your company, consult with a professional part time FD from Assured FD Services.

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Why The “Experts” Are Getting It So Wrong

2016 has been a year of poor predictions. First the shock of Brexit and then Trump’s presidency, in amazingly similar fashion.  It appears that in the case of political events sometimes the media experts should admit that their prognostic abilities are very limited. A different outcome was predicted in advance of both of these events and therefore the initial reaction was panic. The markets quickly recovered however; in the American elections on the very same day and as for Brexit, it was announced shortly after the British stock market had reached an all-time high. Both cases showing no trace of the feared recession or “Catastrophe”.

The effects of Trump’s election were less pronounced than Brexit, with the market falling at night and recovering throughout the day. In a crazy turn of events, some of the closing rates were even higher than the day before, the Swiss stock market reporting a daily plus of 2%, with the dollar impact discussed in a previous post.

So why did the experts get it wrong?

It’s hard to answer this one specifically but some factors to take into consideration are:

a) The “experts” tend to use the voting polls to assess which way the election is going. The problem here is that the sample polls are either very small or from completely unknown sources. This has been shown time and time again to be largely unreliable.

b) The forecasting results from the surveys are based on past models.

c) In the case of the Presidential Election, Trump supporters were looked down upon in the lead up to the polls, this meant that you had a lot of silent Trump supporters who didn’t want to admit to supporting Trump until it came time to vote, similar to the “Bashful Brexiters” of the UK.

d) Another reason provided was that many of the people who voted for Trump were first time voters. Because experts didn’t think they would show up to vote they weren’t included in the ‘likely voter’ demographic forecasts.

e) No matter what the result, it is almost impossible to predict how the stock market will react in the long term. More immediate effects such as a quick drop e.g. Brexit can be more fairly assessed but medium and long term effects are unknown to everyone.

Since Donald Trump’s election he has promised to invest heavily in infrastructure, renewals, tax reductions and “great” economic growth. Hopefully, this means that he will have a positive effect on the American economy and American companies.

Trump has also said that Britain would be “at the front of the queue” for any trade deal after Brexit and Trump is keen to keep up our “special” trading relationship. This could eventually lead to a stronger pound which is great for British companies that import goods from abroad, but bad for British companies that sell their products overseas.

The story continues…

If you are unsure about your business’s financial future following the Brexit vote and US election then please get in touch. At Assured FD Services we have over 20 years expertise working as a full time and part time financial director for UK leading companies, therefore you can rely on the service we provide.

 

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Election Shock – The Dollar Impact on UK SMEs

Many people in the UK and across the world have been stumped with Donald’s Trump emphatic win in the US elections.  Soon after Donald Trump won the US elections, markets across the world including the UK plummeted. Analysts even compared the shock of Trump’s victory to another Brexit.  However, Trump’s first presidential speech, which was both balanced and reassuring, helped the markets recoup from sharp losses.

Various media houses and financial experts have been quite vocal in their predictions that Donald Trump’s the president of the US can have a bad impact on small businesses in the UK. In fact, they were not happy with Hillary Clinton winning as well, stating that her tax hike plans could impair the already waning capital investments for new start-ups.  In any case, since Brexit, the Sterling had dropped to the tune of 15 percent against the dollar.

The Q13 2016 Global Trade Parameter by ‘World First’, stated that UK SMEs have not done a good job of protecting themselves from the uncertainty of US elections, endangering them to a currency risk of £34.6 billion.

Businesses that purchase US dollars have reduced the length of their forward contracts, from an average of 90 business days to lesser than 70. This makes a majority of US buyers unhedged for a stretched amount of time. With 28 percent of UK small businesses trading dollars, the risk for their business can be increased if the currency moving the wrong, becomes high.

While the economic uncertainty looms large for small businesses following Brexit and US elections, business owners have to pull up their socks and prepare themselves against all eventualities. They must find the right strategy to channelise foreign cash flows better and retain profits.

The SMEs in UK are in for a bumpy ride. It becomes important to have the right foreign exchange protection. The companies will have to be well-versed with their FX exposure and have a plan to alleviate risks during times of sheer unpredictability. A solid financial tool is essential for businesses to develop strategies that can work well both on short and long-term, while exercising risk management and making cash flow transparent.

If you are looking for guidance through these uncertain times, contact Assured FD Services today on 07817 676371. We provide specialist part time Finance Director services to UK businesses, strengthening operating stability and strategising for growth.

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How CFOs Are Changing The Landscape Of Small-to-Medium Sized Businesses and Their Financial Success

Small to medium sized companies operate within a rapidly changing environment. And, due to this rapid changing nature, many are ill-prepared to handle the continuous movement and adaptability, usually the result of a lack of relevant management expertise.

In order for a company to survive and thrive, there must be changes made. A lack of adaptability can almost, inevitably, spell doom for a company.

What Factor Lead To Change Within An Organisation?

A company’s finances are the one factor that leads to a real insight into what is happening within a company. It’s the one factor that can lead to significant changes, both in terms of productivity and strategy.

By knowing what a company’s finances are like, steps can be taken to ensure crises are minimised or avoided altogether, and opportunities are capitalised on.  The company can also focus on management control systems, cash flow forecasts and more, including using this information to effectively communicate its strategies and operation.

The Importance Of CFOs In Work Environments

No company can afford to ignore and work without some type of financial structure, as it is necessary to boost employee and consumer confidence. Both economic climate and operative finance are a complicated but necessary issue for companies. Specialised support and expertise are required to manage challenges most effectively. These specialised professionals are referred to as Chief Financial Officers (CFO).

These specialised professionals provide a non-invasive, flexible and on-site intervention, working for however long they are needed, on a full time, part time or interim basis, to ensure that a company’s financial operations are working efficiently and in compliance with the law. It doesn’t matter how complex the issue is; a CFO utilises their knowledge and expertise to advise management of the best course of action.

A Chief Financial Officer will carefully and strategically review the company’s financials and all of its resources. Many small to medium sized businesses still have family finance and personal assets tied into the business. Therefore, the entire process is multi-faceted, and a strategy will be developed over time to strengthen the business’s position.

Mary Ellen Biery, has offered a summary of a CFOs responsibilities here:

4 Key Functions of a Chief Financial Officer

Book

The primary role of a CFO, of course, is to make sure financial records of the company are in order. “They’ve got to make sure the books are right,” says Brian Hamilton, chairman of Sageworks. “Most CFOs have that covered.”

Share

CFOs should make sure that management has critical decision-making data. In order to provide that forward-looking data, CFOs must develop good forecasts and utilise reliable benchmarking data.

Comply

Every company has compliance issues to address, and the CFO oversees many of them. Filing and paying taxes is one example. CFOs oversee duties related to shareholders, such as issuing dividends, preventing fraud and disclosing financial information.

Assist

The final CFO function that is vital to companies is assisting internal customers – the people in the company, such as operating managers, who need data to determine things like decisions on pricing or the lifetime value of a customer.

Click here to read more…

Adopting the recommendations offered by a full-time or interim CFO can provide solutions to most complex financial problems… even for the most innovative companies.

For the immediate future, CFOs provide a new service that companies can benefit from when it comes to their finances and financial services. The market recognises the value and stability a CFO can bring, increasing business confidence right away.

If you are interested in discovering how you can utilise Assured FD Services, as your interim CFO, to ensure your business’s future stability and growth, call us on 07817 676371, or email us at info@assuredfd.co.uk.