Ignorance is no excuse


A harsh title but one that was triggered by a recent discussion with a neighbour, who was bemoaning the fact that they were unaware of a series of events happening in the village despite newsletters through the door, a prominent page of the local community website and information on the local county council’s one and of course word of mouth through the exercising of our dogs at the local park.

In my school years, the point of reference was not the internet but the library and the good old Encyclopaedia Britannia.  Yes, it took about a similar amount of time but then it was just one opinion that you had to consider not the multitude that is at our fingertips today, and the ensuing need of sorting out the wheat from the chaff.

I confess that I am a data addict and like to read multitude of opinions and market research reports.  This is both a good and bad thing as it can lead to a reinforcing of set prejudices or maybe slanted towards the company commissioning the data.

From my business perspective, I will read anything to do with alternative finance, its trends and its opponents.  There is a general theme throughout the various blogs, reports and analytics that imply smaller companies still seem to get the short end of the straw, whether this is supplier payment terms or facilities from traditional finance house, whose main aim seems to be boosting their profits for their shareholders.  Nothing wrong with that – but not at my expense thank you very much.

The digital revolution has changed the way information can be sourced and provided and yet many of us still cling to “what we know” and to “what we have always done”.  For businesses, this means a bank overdraft for short term cash flow or a credit card.  This worries me as there are multiple indications that overdraft facilities, in general, are being reduced or even withdrawn by the traditional high street banks.

As a business owner, it is essential to keep an eye on my competition both today and the foreseeable future otherwise my hard-earned clients may well move on.  In our technology world, the array of innovation, disruption and collaboration continues at a speed that is hardly believable and forces us to constantly re-evaluate.

My “trusted business advisor” – aka my accountant, tells me that the demographics of his clients plays a huge role in their understanding of options, and those of my era tend to cling to old habits whilst his younger clients are more willing to look at alternatives to source the “best offer” for them at that point in time.  The problem is that those of my era tend to have a little more cash, and habit means that we leave it in our business banking account for a rainy day rather than looking to maximise its earning potential.

There are statistics (told you I was a data freak) that shows that knowledge of external finance is increasing in the SME world (Chart by Wesleyan Bank) but this is still likely to be a smaller subsection of the SME world.

It is my belief that there is still a general ignorance about the wider ranges of financing options available to business and I would urge you to look at the services that you are paying your accountant for to see if they can adapt to save you time and money, especially concerning the lingering concerns about the longer-term impacts of our exit from the EU.  If we are facing a “hard” Brexit there may well be increased costs, especially in VAT on customs duty, which in turn could create a cash flow issue, so knowing your options is vital.