Lending to small businesses - here we go again!

Some of you may have read my earlier piece on the Government’s scheme for solving the problem of banks lending to small businesses and the way billions of pounds would be made available under a scheme to encourage bank lending to small businesses OR for mortgages.  Sorry if you thought me cynical but now I feel vindicated in saying that, at best, the money would go on mortgages.  Why?

You will have heard Vince Cable and his latest announcement on lending to small businesses to his party conference – not Parliament as I would have thought more appropriate. This got my cynic-ometer running again and made me think - oh well, the last idea didn’t work so they thought they had better announce something else!  In fact, this is the second time this ‘something else’ has been announced but I assume he thought the media might notice it this time if he announced it at a conference.

With these announcements there is usually not much detail and this is true of this one in as much as further details will be released later in the autumn.  This one was a few phrases for the party faithful to applaud and a few headlines for the media.  The reality is that the idea has not yet been submitted to the EU for its permission for us to implement our own economic policy, so that could stop it in its tracks.

Additionally, the idea will have backing of some Government money (10%) but the rest will come from private capital from investors.  I cannot make out how this will be achieved as the “bank” will not deal direct with borrowers but through normal banks – this of course means two bites of the cherry before it gets to the small business owner.

Finally, Vince Cable has got to get it past his new Conservative guard dog – Michael Fallon – and I think this will be even harder than it was with Mark Prisk!!!

The Treasury response to the report on small business finance from Tim Breedon (BOOSTING FINANCE OPTIONS FOR BUSINESS) states:

“The Government also welcomes the suggestion of a single delivery agency for Government support schemes. This provides a welcome contribution to the debate on the role of Government finance interventions in tackling market failures. The comparison with state-supported agencies in other countries shows the different models available. The Government will examine the options and will need to consider the evidence and rationale carefully, balancing any proposals for change with the need to ensure continuity for existing schemes that work well, reporting back later this year. “

This doesn’t look like that single delivery agency for small businesses so will other suggestions follow?

My view still remains that it is up to us to sort out the question of finance ourselves – the current Government cannot understand what a micro business is, let alone the problems it faces.

Posted by Advisor Keith - 26 September 2012 

HELP....I need somebody!
HELP...not just anybody!

Austerity.  If I hear that word one more time I might just have to scream.  It’s on almost every news bulletin, in almost every business article and is so engrained in my mind I even felt compelled to start my own blog with it!

None of us needs reminding that we’re in hot water, economically speaking.  The question is not what we can do about the situation but what we can do despite it.  Where can any of us turn when resources, grants and government backed schemes for small businesses are melting away faster than a scoop of vanilla ice cream on a hot apple pie?

As a marketing professional myself, it’s no surprise that I rate marketing as a priority area.  But despite, or perhaps because of, my professional bias, I feel strongly that new and small businesses don’t, in general, pay sufficient heed to marketing.  I’ve been lucky enough to see some excellent marketing theory turned into even more excellent practice, but I’ve also seen some mammoth blunders!  It’s my belief that even those lucky enough to get work via word of mouth or from a regular and stable client base must examine their marketing practice all the time.  Why?  Because there are always hungry competitors out there waiting to pounce.

So where can businesses turn for marketing advice when times are tight and cash is strapped?  Here are my thoughts:

-           The Chartered Institute of Marketing (the professional body that champions best marketing practice in the UK) has heaps of information in the knowledge centre on its website – www.cim.co.uk.  You’ll have to register if you’re not a CIM member and want to download survey results or white papers. 

-           Buy a book!  A book on marketing theory may sound dry as the Atacama Desert but it will be invaluable.  You don’t have to read it cover to cover (no one’s asking questions afterwards!) but dip in and out and you’ll discover some fascinating stuff that will help you spend your limited marketing budget wisely.  ‘Sticky Marketing – Why everything in marketing has changed and what to do about it’     by Grant Leboff gives a good background to modern marketing, but it’s just one of many accessible books.

-           Open your eyes!  Question what you’re doing, why you’re doing it and what the likely effect will be.  Look at your competitors and try to evaluate their actions.  Get to know your customers; find out where they are, what they’re doing and what you can do for them.  Once you know that, you’re on the marketing road to success.

-           Recognise when you need professional help.  Damaging a brand is easy.  Rectifying that damage is lengthy and costly at best, impossible at worst.  If you engage professional help from a business advisor or marketing consultant look for appropriate qualifications from bodies such as the CIM and/or a business accreditation and quiz them about their own business experience.

Questions about marketing?  If so, post them here.