Don’t Take Your Loyal Customers For Granted!

It started sometime around the third week of April.  With increasing frequency since then, the BattleAxe has been seen wandering the corridors of BattleAxe HQ shaking her head and tutting - even more than normal. Her deep sighs have been those of a baffled and desolate woman.  

Eventually this week, at an Elf team meeting her high-horse mounted, she made her views clear through the following mantra:

“Lesson Number 1 in business is to understand the needs of your target market(s). 

Lesson Number 2, is to make sure core products aren’t in stock one day, not available the next, then back again on the shelves a week later. 

Lesson Number 3: communicate with your loyal clientele in a way that leaves them feeling loved and wanted – make them feel special.”

The Elves seemed confused as to why the BattleAxe felt the need to remind them of this.  “Isn’t that obvious to everyone?” ventured the Chief Elf, “after all, the majority of business is really all about your customers, not about bigging up you as an entity.”

“One would think so,” the BattleAxe responded (for once overlooking the Jamaicanism), “but the last few weeks have shown that there are some that just don’t appear to have worked it out.  Their marketing gurus seem to have overlooked the basics and focused on brand rather than substance.  Not only that, but core product items were changed without even talking to the heads of the departments affected – the people who actually have the data and know the customers best. 

“The sad thing is that, as a result, they’ve had to shed jobs and lost some really good local staff.  Furthermore their bargaining power with suppliers and international distributors has been seriously weakened.” 

“If only they’d taken heed of the basic rules, their customers would keep coming back year in year out.  And they’d have been able to do it without feeble attempts at attracting a whole new fickle customer base by “updating” much-loved stock lines, thereby leaving loyal customers without the very products they’ve bought for years! 

“It doesn’t mean that a business doesn’t need to evolve over time – life changes.  Neither does it mean that they can’t try new things alongside established standards.  

It’s not like we’ve not seen the impact of all this before. M&S getting close to the brink misjudging their market. HMV appointing liquidators after over 90 years. Woollies losing its wonder to the likes of Wilko, not to mention the big supermarkets having underestimated the German discounters and now, apparently, ignoring Amazon and eBay’s potential impact in challenging the very need for shops as we’ve known them.

“What it does mean is that none of us in business can afford to be complacent and we definitely can’t act like we know best, simply assuming that longstanding customers will follow no matter what’s on offer.  

As recent events show, behaving that way means that we’ll wake up to find closed outlets as they rapidly lose their hold on the market.” 

The Right Resources in the Right Place

When she set off on her Saturday triathlon training a couple of weeks ago the BattleAxe had no idea it would be the subject of her next KBN musings.

The training involved a run through the “stunning” Yorkshire countryside. Unfortunately, that description turned out to be rather closer to the mark than anticipated.  A serious reaction to the flowering oil seed rape, which decorated the run route gave the BattleAxe a not-so-funny turn.  

Suffice it to say that one significant positive was the tender and very effective ministrations of the ambulance crew (who she would like to thank profusely for their swift and successful actions) and the second was the very grateful fact that the very yellow fields concerned were within a short ambulance ride of Pinderfields hospital.

Thankfully, by the time that the Chief Elf arrived, flustered and concerned, the ambulance team and the medics had the BattleAxe up on her feet, jogging on the spot and waving her rolling pin like a good’un.

Once home and relaxing, she announced the need for a recuperative cuppa.  One of the BattleAxe’s other foibles is that her tea contains milk of the almond, not the cow and, to the Chief Elf’s horror, there was none to be found in the BattleAxe’s fridge!  

Although it is easier to source almond milk these days, the Chief Elf realised to his dismay that the supermarket near BattleAxe Towers was closed and he might have to drive to the outskirts of Huddersfield to get to the hypermarket which might (fingers crossed) have some in stock.  

Thankfully, he was able to only travel as far as the conveniently located local shop as they had the good sense to be both open and to have stock of the correct white liquid - almond milk unsweetened of course! so the Chief Elf was able to return just in time as the kettle came to the boil thus avoiding the flying rolling pin.

These experiences set the BattleAxe thinking about the value for all businesses of having the right resources in the right place for their customers.  

“Isn’t it strange” she said, “that just when supermarket chains are recognising that they need a local presence – even if only carrying a fraction of their hypermarket stocklines – that the NHS and other public sector bodies are going the other way?”

“Well,” the Chief Elf ventured, “isn’t that all about having centres of excellence?”

“Yes, I suppose you could see it that way,” replied the BattleAxe.  But when you have to travel too far to access the excellence or really only need the basics doesn’t it lose some of its value? I mean, if you had gone to town to get milk I’d have lost all interest in waiting and I’d have had a black coffee by the time you got back!”

She paused “The ambulance arrived quickly and we were close enough to the hospital that, had it been a drastic situation with the need for blue flashing lights, I would have got access to nearby medical care pronto. This afternoon, luckily for us, and mainly you! I only needed the basics so there really was no need for the hypermarket trek.

”The moral of the story? You need to have the right resources in the right place for your customers whether you’re a business or a public service!”

An unpresedented amount of unpresedentedness

For some commentators it has been a “totally unprecedented” 12 months with Britain voting for Brexit, Donald becoming US president, Marine in the final two and now Theresa calling a snap general election.  None of them anticipated by the pundits and so, according to them, the rest of us should be feeling deeply unsettled, un-nerved and, as businesses, unwilling to make decisions.  

Some in the press seem to be delighting in saying “what is going to derail us next?”  

Stepping back from the headlines, what has really changed for SMEs in the UK (or Europe, the US or anywhere else)?  

The BattleAxe conducted poll of her own and 9 out of ten owners said their businesses weren’t seeing anything out of the ordinary…..or to put it another way: “Nowt’s changed!” 

All reported normal worries about making sure they sell enough; that customers pay on time; that suppliers deliver and don’t hike their prices; and keeping their fingers crossed that staff turn up after the all-night election coverage.  

Yes, currency movements impacting costs concern them but most see this as a blip and none saw a risk that the supply chain will break down.  In fact “businesses all over the world need to sell to survive and no government will cut off the tax paying hand that feeds them” is what one told the BattleAxe.

Yet there’s still a word left hanging in the air, full of meaning and emphasis:  “but…”

“So what’s the issue then?”  the BattleAxe muses as she polishes her rolling pin, “why is business behaving like its doubting its self-confidence when nothing has fundamentally changed?”

Then realisation strikes: “Ah yes, it’s like coming down from Holme Moss on my bike – I don’t entirely believe that the brakes will stop me at the bottom! I know that the likelihood is miniscule, but I read online that someone did come off on a hill recently so it could happen!”  The repeated implication of problems ahead eventually breeds doubt on everything from whether Europe might shut us out to whether Trump could decide to bomb Holmfirth chasing ISIS insurgents.  After all, no-one expected the somewhat depleted Swinton Lions to play a blinder against the Giants, did they? 

There are three ways of dealing with this nagging voice in your head - ignore it and hope it won’t happen; plan for every eventuality no matter how remote, including oil, brake cables failing and a puncture all on the same corner; or business as normal with an escape plan for the steepest slopes.  The Elves sometimes go for option 2 – its virtue being it rarely leaves them disappointed - but it does use a lot of time that could be better employed on billable work.

The BattleAxe recommends option 3 - her plan is to get those brakes checked ahead of the First of the Summer Tri on 14 May and make sure that there are marshals suitably positioned at the bottom of the long hills…..after all, rolling rolling-pins gather no moss!

This Lady’s not for turning?

The words of a certain prime minister echoed in the BattleAxe’s ears as she was urging No 10’s current occupant to ignore that quote and see sense on draconian media fuelled tax decisions.

Mrs May was clearly listening. She promptly ordered a U turn on the rise in National Insurance for the Self Employed announced by her next door Hamster in the Budget.  An increase he “justified” on the basis it wasn’t fair that the self-employed paid less than employees. However, he forgot that the self-employed don’t get statutory sick pay; have no right to paid holidays; don’t get pension contributions (because there is no such thing as Auto-Enrolment for the self-employed) nor lots of other benefits of employee status.  Their lower rate of NICs has always been a means of putting a little bit more away each month towards exactly those insurances and pensions.  Thankfully Mrs May helped Spreadsheet Phil “review” the idea and the concept disappeared – the BattleAxe having already offered a rolling pin to knock some sense into the Chancellor.

A slightly less vigorous deviation is on the Making Tax Digital strategy where businesses will need to file accounting data with HMRC more than once a year.  Given the state of HMRC’s existing systems and their proven inability to maintain accurate records, news of a further year’s delay gave rise to a huge collective sigh of relief within BattleAxe HQ.

Then there’s the new rules on how freelancers working for public authorities through limited companies are taxed. Another knee-jerk reaction to the media whipping up misunderstanding.  A few cases of abuse mean all freelancers working for the NHS, government departments and local authorities will potentially be penalised.  Historically the tax payers made the decision on whether they were really employees and it was their risk if they got it wrong!  Now it’s the public bodies’ decision and risk. So, what odds they won’t err on the side of caution and misclassify even genuine client/supplier relationships?

No sign of an Exchequer U Turn on this – yet! But there are many freelancers – including locum doctors and nurses who keep the NHS going – who are taking to the exit ramps and accelerating away from the public sector and, in some cases, the UK. Those staying are demanding higher daily rates to compensate for the new tax. So any potential extra tax being collected (the BattleAxe isn’t convinced it will be any) may well be outweighed by the additional costs of keeping the public sector running.  Hold on: that could explain the delay on Making Tax Digital – maybe HMRC can’t afford the staff to implement it! The BattleAxe will make doubly sure she doesn’t fall off her bike at the next triathlon in case there’s no-one in A&E to patch her up.

So, Mrs M, ignore Mrs T: U Turns aren’t always a bad thing!  Better still make sure the Cabinet engage brain before making announcements – the BattleAxe can help with the thinking process… on a freelance basis, of course.

Cash Flow is King

Whether you are in business or not, you’ll have heard the phrase ‘cash flow is king’, many times before. The saying has never been more true in this time of uncertainty when businesses of all shapes and sizes are just paused waiting to see what happens next This is making the mammoth task of  trying to balance the books even more difficult than usual.

One of the most difficult tasks any small business owner can face is how to chase up an overdue invoice. I say difficult because the SME has to navigate a tricky path between having their bill paid and not falling out with the customer. Here are some tips that will help any small business owner chase up overdue invoices:

Check payment runs - find out when customers make payment runs and what the cut off is. There’s no point in submitting the invoice on the 20th if the cut off for that month's payment run is the 19th!

Make it easy to pay – You should have a clear collection policy in place outlining credit terms, how you will collect money and any overdue payments.

      

Make invoices clear – having a good system in place to record invoices is key. There are many software packages available like Free Agent that our clients use that make it very easy for you to track payments. Remember also that, the last time a company can object to an invoice they receive is on the day they receive it. After that time, they cannot quibble and dispute it.       

                                                                           

Follow customer instructions – large companies in particular often have strict systems for paying. Maybe they want a special invoice number – so make one for them. Also, ensure that it’s consistent throughout your communications to avoid confusion.

Follow up promptly – Make sure you have a consistent collection procedure and always follow up as promptly as possible. Keep a close eye on patterns in which clients generally pay; and ask yourself whether this fits in with your billing cycle? If the client does not pay ten days after the invoice is due, send them a ten-day letter re-iterating the fact that the invoice is due and (politely!) asking for payment.

Be polite – Shouting threats is not going to do you, or your business, any favours. If all else fails, and the client is ignoring you, or refusing to pay the bill, then consider whether you really want their business in the future, and make a decision about whether or not it’s worthwhile to apply to a county court (used to be known as small claims court) to claim money you’re owed by a person or business. You can process a claim for money owed up to a value of £100,000 online. This covers most debts owed to SMEs; but if the debt exceeds this level, consult a solicitor. More information can be found at www.gov.uk/make-court-claim-for-money

Consider as well that the business could also be going through tough times, or they could be unhappy with the service you have provided. Either way, your main aim is make them pay their bill. Remember cash flow is king. 

This article appeared in Huddersfield Examiner, Kirklees Business News February Edition page 14 

Too quick off the blocks?

The interest rate cut by the Monetary Policy Committee of the Bank of England didn’t come as a total surprise, like Usain Bolt’s triple-triple - but some of the BattleAxe’s grumpier interlocutors have been wondering if it may just prove to be a false start.

The MPC’s reasons sound sensible after our Brexit vote.  There are genuine fears, from some, of a downturn and job losses resulting from that vote.  Cutting rates is a classic ploy to encourage businesses to keep investing and spending, by showing they can borrow cheaply.  

However: what message is this sending out so soon after the vote?  Yes, after a lengthy and bitter campaign, the economy might have been expected to take a bit of a wobble.  Some people seemed genuinely amazed on June 24^th that the lights came on, buses ran and overseas companies were still buying from the UK! 

The grumblers’ nagging doubt is that cutting rates right now suggests the UK is panicking or a sign of an economy that is out of control.  Both would be somewhat at odds with the latest figures on employment and consumer spending – like suggesting GB’s women’s 470 sailors or Giles Scott would fail to medal with just the last race to go!

Only time will tell how Brexit will actually impact the economy.  So far, the noises on trade deals from non-EU countries have been very positive.  Lower sterling makes imports more expensive but also makes exports cheaper, fuelling British exporters. They may need to reset sights to trade more actively with the 85% of the global economy that’s outside the EU. However, if we produce goods the world wants at the right price, that gives us profits to pay for those imports.

The other question is, will the base rate cut actually make any difference?  Well, of course, it depends on who you are! The drop may be raising smiles from people with mortgages, but they are LIBOR linked nowadays, so the cut may not lead to a wholesale drop in lending rates.  After all, the banks are already muttering more loudly about low margins than some countries have been about our success in the velodrome. 

Sadly, savings rates are almost bound to drop – thank goodness Mark Carney has come out against negative rates where you end up paying just to leave your cash in the bank!  That’s as attractive a concept as Yorkshire coming outside the top 20 in an Olympic medal table….