The best business advice, opinion, news and expertise in Greater Manchester and further afield.

Thursday, 31 March 2016

Member Blog: What is trade finance and how can it help your business?

By Vince Tovey - Davenham Trade Finance 

In simple terms, trade finance can benefit any business sourcing goods from overseas, and let’s face it, there is no getting away from the fact that we are a nation of importers and are likely to remain so for some time. Right now it is a cost effective time to be dealing with certain parts of the world, as the cost of freight and the appetite of some overseas manufacturers to work with the UK at very competitive prices has not been this positive for quite some time – especially in the Far East.

Closer to home, there continue to be opportunities with our European neighbours, where the majority of goods imported into the UK originate from, with the added benefit that goods can arrive into the UK within a matter of days (rather than weeks when dealing with farther flung shores). This allows deals to turn quickly and a trade finance facility to be particularly cost effective.

At Davenham Trade Finance, we look to assist such businesses dealing in finished goods with good margins that are required to fulfil a forward order book or are regular lines sold to regular customers. With the increasing difficulty in SMEs obtaining the more traditional types of funding they have previously been able to access, alternative sources of funding, particularly trade finance, have become essential. This is even more prevalent in the much smaller SMEs – from a new start-up to a £2m turnover business – and these are the businesses that we are particularly focused on helping.

So, what are the key triggers that would suggest a trade finance facility might help your business?

A rapidly growing order book requiring an increase in supplier purchases.
Seasonality within a business that causes spikes in the cash flow at certain times of the year or the trading cycle.
Short term cash flow “holes” created by the pressure to make supplier payments.
Winning a one-off deal that is larger than the traditional orders the business writes or bringing on board a significant new customer.

We know that SMEs put a lot of work into winning orders and into attracting new customers, so it is essential that this hard work does not go to waste through an inability to then fulfil these orders, and a trade finance facility can ensure that this is avoided and that orders can be successfully fulfilled. If a business feels it is restricted by the lack of available cash flow or working capital then it is possible a small trade finance facility may provide a solution that will allow the cash flow to become more liquid, helping the business to take on additional orders and therefore eventually increase both its turnover and profits – which is what everybody wants, isn’t it?

After reading this, we hope you have gained a more in-depth understanding of what trade finance is and how it works, and if you believe your business could benefit from a trade finance facility, please get in touch for an initial discussion and to explore whether this may be of benefit to your business.

Wednesday, 23 March 2016

Member Blog: A Little March Madness

By Andonette Wilkinson - Creative Director at CreativJam Limited

There has been a little March Madness for the team at Manchester Digital Agency, CreativJam. A couple of weeks ago, inside the Rise at Grindsmith Coffee House (incidentally a really great venue) in Manchester, we collaborated with The Business Growth Hub and representatives from Google UK to advise Manchester business owners on their digital marketing strategy.

Although we work with digital marketing across several social media channels, this session along with our guests looked into the whys and whats of Google AdWords. I started the event by explaining why advertising is beneficial to a business, and took everyone on a bit of a journey about Americana, pop culture and the Burma Shave Company as an example of why we need to move with advertising trends.

Back in those days signs along the road were a great way to advertise and even capture their ideal audience for their shaving product. Disruption came via the interstate and faster vehicles, and by the time the second world war ended, the signs had all but disappeared and the company vanished into obscurity, being swallowed up by one of its competitors.

Today the disruption is digital and more recently the huge trend towards mobile. 2014 was the year that mobile browsing surpassed desktop. In 2015, 74% of UK consumers owned a smartphone and used it to shop. 40% of us went to a competitor if the site was not mobile friendly. With trends like these, it makes sense that savvy business owners everywhere are turning to digital to make sure they don't get left behind.

Google continued the session by explaining their range of marketing products. Most of us are familiar with the search ads we all see when we type in a Google search, but what about the display network? What about re-marketing? YouTube? GMail Ads? These are all things many businesses have not considered. Many look at ways to find new clients without consideration of the ones right under their noses, and are unaware of the power of re-marketing, which, in layman's terms is using your existing company data, whether that be your client list, your mailing list or visitors to your website, and making it work for you.

I then demonstrated comparatively how little digital advertising can cost in comparison to traditional and offline forms of advertising, and just how measurable the process is. Imagine if like the almost all male drivers down American Highways of the Burma Shave era, you knew that all the passing traffic to you were your exact target audience? Not only can we do that today, but we can tell, from hobo to hipster, whether said male is likely to want to groom his beard or not!

If you would like to know more about how Google and CreativJam can help grow your brand then you can call us on 01706 507267 or email hello@creativjam.com

www.creativjam.com

Friday, 18 March 2016

Member Blog: What does 2016 have in store for private equity?

By Syd Hussain, PwC's North West private equity leader
2015 was a great year for private equity, with a number of high profile exits and investments across the region. Exit activity in particular, was strong, driven by an active IPO market, good overseas investor appetite and plenty of private equity dry powder to put to work. We saw some headline grabbing floats such as Auto Trader and On The Beach here in the North West.

From an investment perspective, the market remains highly competitive, with demand for quality assets outstripping supply, contributing to high investment multiples. Arguably, TDR’s investment in Euro Garages was the stand-out transaction in 2015. So what does 2016 have in store for private equity?

Given the present political, economic and market uncertainty, predictions are challenging - I doubt many of us saw oil prices falling to $30 barrel 12 months ago. Despite this, 2016 has started promisingly with a number of hotly contested processes; the supply of private equity capital remains strong reflecting both new entrants and excellent fund raising by a number of our regional private equity houses.

Moreover, we are also seeing alternative finance providers establishing themselves in the North West, together with London based debt funds, increasing their focus on our region as they look to support midmarket businesses. There remains a very strong appetite to do deals and overall I remain positive about UK and North West growth.

Undoubtedly, it may continue to feel like a seller’s market, which could make private equity more cautious on the prices being sought and the processes being run.

In addition, the private equity landscape is changing, regulatory pressure, calls for further transparency, and increased competition means that private equity funds may cast their net wider to find untapped sources of value; increased emphasis on deal origination may be required to find those offmarket gems.

The North West is home to a number of leading private equity houses, which should be celebrated. That’s why we are including private equity supported companies in this year’s UK Private Business Awards.

Private businesses are the foundation of the British economy, and indeed the North West has a great reputation for entrepreneurship, and these awards give them the opportunity to share their successes and gain recognition for their innovative work on a national stage, and pitch themselves rightly alongside some of the UK’s leading brands.

PwC has an established Private Equity Group that brings together a multi-disciplinary team dedicated to serving private equity and their portfolio companies. The Group has a proven track including recently supporting transactions involving Euro Garages, Travel Counsellors, Mobica, Sambro and On the Beach. Our advice covers fund structuring, through to deal origination, deal execution and post deal services.

We work with our private equity clients to help them to refinance and exit from their investments. Our taxation advice fund inception and ongoing compliance includes tax due diligence, structuring and exit planning.

PwC is uniquely placed to provide a partnership across the private equity lifecycle.

For more information about how our team of specialists can help you, or details on the Private Business Awards, please contact me on syedul.hussain@uk.pwc.com /0771 406 4876.

Wednesday, 2 March 2016

Member Blog: A tale of 2 trains (of thought about marketing!)

By David Wright - BSA Marketing
I don’t know whether you saw this video that was posted on YouTube then rapidly went viral.

Steam enthusiast Ryan Allen had positioned himself in (he thought!) the ideal spot to get close up video of the iconic Flying Scotsman on its first inter-city run in 10 years – then it happened – thank you Virgin Trains!

Hopefully he saw the funny side…..



But what about the marketing?

This story neatly demonstrates 2 different marketing approaches:

1. The instant-win quick fix

Undoubtedly Mr Allen wanted the video for his own interest rather than having any commercial motive; however, the fact that he got the movie he did and then published it on line, means it went viral, got picked up by national news and so caught the attention of Virgin Trains themselves.

Feeling a little sorry for Mr Allen, they have generously offered him 2 return flights to New York.
Not a bad quick return but next time he wants to fly to the States I’m not sure he will be so lucky – he is back at square one!

Many SME businesses see marketing as a direct extension of their sales process. Whenever they do anything they focus on a quick win so tend to be more interested in short term results rather than any longer term benefit.

As a consequence, while they may get some immediate sales, there is little or no longer term benefit. Next time they are looking for business, they have to start again and hope that their next ‘campaign’ produces more results.

2. Making the most of opportunities for long term engagement – Real Marketing?

OK, Virgin is a big and successful brand but as soon as they got wind of the Virgin east Coast photobomb, their marketing operation swung into action with Sir Richard Branson being interviewed on the BBC News making the offer of the free transatlantic flights which, while having great value to Ryan Allen, will cost Virgin virtually nothing to deliver yet the goodwill shown by the company is a great reinforcement of their brand values. Even the likes of me are writing about it!

My guess is that Virgin aren’t going to see a spike in bookings on either trains or planes as a result of this story so there isn’t much of a quick-win sales hike – but I suggest the benefit in terms of ongoing promotion and support of one of the strongest brands in the UK is significant – and at remarkably little cost to the company.

And my point is….

In my experience, most SME marketing looks for short term sales results. Money and resources are put into campaigns that often don’t deliver quite as much as the business owner might have wished.

If a little more focus was given to building longer term engagement with a market, awareness of a company and its brand values and propositions will grow creating ever more likelihood that when a potential customer has a need they will think of that company first – the sales will come!

Even better, in terms of overall sales and marketing budgets, additional focus on market engagement, making the most of skills and resources already available in a company, can normally be achieved at a remarkably modest cost in terms of time or money.

It just takes a bit of commitment and anyone can do it.

http://www.bsamarketing.com/