Weekly Blog by Philip King, CEO of the ICM - 'Going for growth'

Lord Young published his Growing Your Business - A report on Growing Micro Businesses on Monday and it's a good read with some insightful views. I've spent some time with Lord Young as part of my involvement on the board of the Start-Up Loans Company, and I never cease to be amazed at his enthusiasm and energy. I'd love to think I will be so sprightly when I am 81! 

 

The report can be found at the link above and three things strike me in particular. Firstly, the proposals regarding public sector procurement starting on page 19. Whatever government might say, or intend, the reality is that many small businesses find procuring for public sector contracts bureaucratic and daunting. Their perception is that large organisations will be favoured in the process and - whether they're right or wrong - we all know that perception is, for them, reality. The removal of the PQQ system for contracts below €200,000 makes very good sense, as does the 'single passport' proposal allowing pre-qualification data to be entered once and then - after approval by one authority - apply to all bids across multiple authorities.

 

Secondly, the recognition that "Few small firms understand the importance of cash flow particularly when applying for a first bank loan." I guess the fact that the ICM/BIS Managing Cashflow Guides have been downloaded more than 450,000 times since they were launched in 2008 and are seeing regular and substantial monthly increases reinforces this point.

 

Thirdly, the recommendation that the upper age restriction be removed from the Start-Up Loans scheme. Originally set at 18-24, then in January changed to 18-30, this latest suggestion would allow anyone to benefit from what has been a hugely successful initiative. Almost 4,000 businesses have been started, receiving loans totalling nearly £20m, and the creation of a private company to manage the scheme is a radical and

 

innovative alternative to previous government propositions. The businesses receiving funding, support and mentoring have the chance of a real kick-start towards their entrepreneurial vision and aspirations. At the start of 2012, micro businesses (0-9 employees) accounted for 32% of private sector employment and 20% of private sector turnover. Growing the contribution of such businesses can only be good news for the economy and add to the increased confidence that is starting to emerge.

 

The report's 54 pages contain much more, including the proposal for Growth Vouchers encouraging businesses to obtain support and advice, and just as I am proud to have been engaged on the Start-Up Loans Company Board since its inception, I am also proud that the ICM is listed as one of the organisations with which Lord Young engaged in the writing of the report.

 

Finally, it would be remiss of me not to mention the fact that the Institute of Credit Management won another PR award last week. The press release announcing the win can be found here and I'm delighted at the recognition of what we, together with our PR agency Gravity London, have achieved in raising the profile of professional credit managers and the vital role they play in supporting the economic recovery.

 

Next week, I'll be standing down from my blog-writing responsibility for a week and we'll be publishing a guest blog by Professor Russel Griggs OBE who is Lead reviewer of the banks appeals processes and Chair of the Scottish Government’s Regulatory Review Group ahead of the publication of his second annual report in June.

 

 

Weekly Blog by Philip King, CEO of the ICM - 'Understanding the value of software'

I had an interesting meeting with our friends at Intuit last week, a company probably best known for its Quickbooks range of accounting software. But as well as producing financial software for small businesses, it also provides free small business training through its Financial Fitness workshops programme. It was this latter activity and its support for Start-Up Loans that led to our meeting.

 

I was pretty impressed by the products I saw and by the ways in which different financial activities can be integrated and monitored over a range of mobile devices as well as traditional Pcs, but I was staggered by a statistic they shared with me. I'm well aware of the 'lies, damned lies, and statistics' notion but – even if the detail is over-stated  - it's still incredible. I was told that 66% of businesses with up to 15 employees use no software at all to manage their accounts, either relying on an accountant to periodically pull together numbers from a pile of abstract pieces of paper and records, or simply muddling through with a combination of paper and/or spreadsheets.

 

I've been preparing for a presentation at the Milton Keynes Business Expo 3.0 Exhibition on 8 March where I'm addressing the topic 'Cashflow is King – Ten Top Tips', and this has made me think. Managing a business means knowing its position at any particular point in time. With a diverse range of simple and inexpensive tools available from a host of different suppliers that allow for the production of invoices, recording of expenditure, taking of payments, summarising outstanding debts, and a great deal more besides, you have to ask why any business, however small, would not use something so obvious and instantly available to make its life easier. I clearly knew there'd be a proportion of businesses that manage without any software or specific credit management tools but 66% is a real concern. I think I have just found an eleventh tip…!

Philip King, CEO of Institute of Credit Management (ICM) - 'Judge or Jury'

I had the privilege of sitting on the judging panel last week for the SME category of the National Business Awards. It was the first time I've been a judge where the nominees have to present a 'pitch' and it was a fascinating experience. I've always wondered what it felt like to be a dragon in the den, and I guess this is the closest I'll ever get to finding out!

There were 12 entries and we spent a long day listening to a series of presentations from a range of very diverse businesses. It was inspirational hearing from people who have turned an idea into a business that is thriving and, in some cases, hugely successful in a very short space of time.

The common theme, certainly among the front runners, was unbridled energy and enthusiasm and a passion for a business that entrepreneurs saw as 'their baby'. If those qualities could be replicated and reproduced across business, it's hard to believe we'd still be struggling to see the recovery for which we all yearn. So often, the idea was simple and certainly not rocket science. As a judge, I was left thinking why somebody else hadn't thought of it before and wishing I had a more creative mind that could spot what seemed like obvious opportunities once somebody else has pointed them out!

The Start-Up Loans Company in which I'm involved has now started lending and, at the Board Meeting this week, we were hearing examples of young people who are determined to turn an idea into a successful business and - judging by their determination - will do so.

On the political front, we've heard Vince Cable's announcement about the new Government-funded bank to support SMEs. The devil, as always, will be in the detail but I certainly welcome the plan to bring together in one place Government finance support for small and mid-sized businesses. As I've said here recently, the multiplicity and complexity of schemes often results in them almost working against each other so if the new bank helps to simplify and de-clutter the landscape, it can only be a good thing.

It was good to meet Michael Fallon, the new Business Minister, this week and I'm at the Labour and Conservative conferences over the next two weeks. It will be interesting to hear what the parties have to say at this mid-way point of the current Government.

Weekly Blog by Philip King, CEO of the ICM - 'Just the job'

Some of you who know me will know that, since I spend a fair amount of time on the road, I am an avid listener to audiobook biographies as I drive.  Last weekend I finished listening to the biography of Steve Jobs by Walter Isaacson. The audiobook is unabridged, and on 20 CDs lasting 25 hours so it took a few weeks, but what a listen and what a story!

  

I wouldn't suggest that he was an ideal role model for, in many respects, the book suggests Jobs' style and communication skills left much to be desired.  Nevertheless, he had some qualities without which Apple wouldn't have grown from a start-up in his parents' garage to the world's largest company, and without which the Apple products wouldn't have earned the reputation they have for simplicity, quality and intuitive use.  He brought ideas, art and technology together in ways that invented the future.

  

His ability to focus on a small number of projects or details to the exclusion of everything else allowed him to ensure they received absolute and undivided attention.  His relentless drive for perfection meant he never settled for second best and never compromised any of his design principles.  His ability to see the future for his and other products and predict likely trends enabled him to spot opportunities in the market that would otherwise have missed and indeed were often missed by other players already in those very markets.

  

Some leaders push innovation by being good at the big picture, others by mastering details, but Jobs did both relentlessly and delivered a range of products over 30 years that transformed whole industries.  He quoted Henry Ford as saying "If I'd asked people what they wanted, they'd have said a faster horse; our job is to show people what they can have"; Jobs believed Apple should show people what they were going to want before they knew it themselves; he said Apple's task was to read things that were not yet on the page.  When you look at the graphical interface introduced on the Mac, iTunes music downloads, iPods, the iPhone and, most recently, the iPad, it's hard not to accept that he did exactly that.

  

Perhaps the most interesting aspect of his personality was his frequently cited "reality distortion field' which resulted in him seeing things as he believed they should be rather than as they really were, and in him refusing to accept that something couldn't be achieved.  At the end of the book the author says that almost all the many people he interviewed would share a litany of examples of how badly Steve treated them but end by saying how he got them to do things they never dreamed possible and which they didn't believe they were capable of.

  

If you get the chance, it's a cracking good read (or listen) and has some great good and bad examples from both of which there is much to learn.

To find out more about the Institute of Credit Management visit www.icm.org.uk

Weekly Blog by Philip King, CEO of the ICM - 'Supporting the Business in You'

A campaign was launched by David Cameron in Leeds on Monday. 'Business in You' is a partnership between private enterprise and Government to highlight support for start-ups and growing businesses and encourage entrepreneurial spirit in 2012. It will run throughout the year and I'm delighted to say the ICM is actively engaged as one of the initial supporting organisations.

The campaign aims to highlight the fact that many people are sitting on an idea that could become a business, and many businesses have the potential to grow whether that's by launching new products, entering new markets, exporting for the first time or more widely, or by accepting the challenge and going for growth despite the negative malaise that surrounds us. The campaign website can be viewed at: http://businessinyou.bis.gov.uk/

I was at a meeting at BIS with many other of the supporting organisations on Tuesday and there are some really inspiring case studies being shared, and some innovative support solutions being offered by organisations as diverse as the Forum of Private Business, CBI, Institute of Directors, British Bankers' Association, ACCA, ICAEW, Intuit, Microsoft, Paypal, and Mitie to name but a few. Interestingly this is less about a government campaign with private sector support, and more about a collaboration that brings together the best from both the public and private sectors. And encouragingly, this isn't a government short-term soundbite-style gimmick but a long-term activity lasting for the whole year with links into many events and propositions. So how does the Institute of Credit management fit into this?

One of the challenges for all businesses, and particularly for start-ups and growing organisations, is making sure they have enough cash to sustain the business and its requirements. Managing cash-flow is vital, and the over 275,000 downloads of the ICM's Managing Cashflow Guides are testament to how relevant the subject is, and what an appetite there is to gain the necessary skills to manage it better. I hope the 'Business in You' campaign succeeds in encouraging more entrepreneurs to create a start-up, and more businesses to successfully expand but if it also helps businesses to manage their finances better and therefore survive longer, then it will have delivered something really worthwhile. I am proud that the ICM is among its supporters.