http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./ What this blog is all about en-us Mon, 13 Oct 2008 11:34:12 GMT Tue, 07 Oct 2008 16:37:11 GMT CF Blogger by DayDream Inc http://blogs.law.harvard.edu/tech/rss johntoppin@nomizon.co.uk johntoppin@nomizon.co.uk http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=D82B5761-1185-BAC1-E9699078F304EDEC At times like this cash really is king and according to Business Link, not doing the basics such as a regular cash flow forecast increases the chance of business failure by 45%.  Ten tips for financial health:  1. Cash flow and financial planning should be on your management meeting agenda’s every time.  2. Regularly update your cash flow forecast.  3. If you have a conflict in choosing between increasing profits or increasing cash, take the cash route.  4. Watch your borrowing covenants carefully so you know when/if you are likely to be in breech.  5. If you have a review with your bank or investors, prepare thoroughly.  6. Keep your bank informed in advance of getting into difficulty.  7. Consider all alternative sources of finance.  8. Keep in touch with potential funders before you think you might need them.  9. If your business survival is under threat, think of assets that can be sold, new injections of cash and take professional financial and legal advice.  10. If you are cash rich, consider ways of using the funds for the long term benefit of your business.  Financial Clinic Tue, 07 Oct 2008 16:37:11 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=D82B5761-1185-BAC1-E9699078F304EDEC http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=29082306-1185-BAC1-E965D9463007DF7C In October last year I raised the spectre of a recession being on the cards for the UK. Almost a year on and it seems to be a happening thing. Many of you will not remember the last recession and most of you will not have been running businesses at that time. Those of you who were, will remember that creative businesses fared very badly in the early 1990's.Creative services are usually the first to suffer as client FD's reduce or stop spending on marketing, new product development etc, the so called discretionary expenditures. This obviously effects agencies and those who supply agencies badly. Banks  lend less willingly and charge more for the privilege. They also become quicker to call in receivers to struggling customers and are less willing to give management teams the time and space to try and pull through. As clients come under more pressure, some will be taken over and if your client is taken over by a rival you may lose that account. Some clients will go to the wall, leaving unpaid bills in their wake...including bills you may have sent them. Clients will want you to work for less as their budgets come under pressure. Your profits suffer and more importantly cash becomes very tight. This all happens very quickly and it feels like you are having all of the bad news - lost clients, downward renegotiation of fees, bad debts and a drying up of new business pitches and enquiries - in a frighteningly compressed period of time. Steering a business through these times is very different to running a business during  a booming or more benign times. My concern is that because the last recession was 15 years ago many people running creative businesses today have no idea what this is like. If you were in business in the last recession do you agree? Will your business survive or will it disappear?  Are you worried at all? Creative Business Wed, 03 Sep 2008 16:25:11 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=29082306-1185-BAC1-E965D9463007DF7C http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=7E0215BC-1185-BAC1-E9D1A32B21BF1BBA In the current economic climate your cash flow should be a priority and you need to protect it for the benefit of you and your business. Everyone seems to be holding onto their money for as long as possible and for creative SME’s who are often at the bottom of the food chain this can spell disaster especially as clients tend to be much larger businesses. Here are a few tips: Prospective clients: Credit check them. Set credit limits and don’t increase them unless they have demonstrated that they are good payers. Existing clients: If the time taken to pay has increased or if you have any other reasons to doubt their financial health, credit check your clients. Don’t be afraid to be as professional with collecting from clients as you are in your other dealings with them. Understand your clients’ payment procedures and make sure you are in a strong position by having purchase orders, terms and conditions etc. Sort out those who can’t pay from those who won’t pay and act accordingly – be realistic with the former and tough with the latter. Litigate if necessary – there are some very good debt recovery firms out there.   How do you deal with problem payers? Financial Clinic Fri, 01 Aug 2008 11:23:30 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=7E0215BC-1185-BAC1-E9D1A32B21BF1BBA http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=E45A7A74-1185-BAC1-E9DA223C2B5B4E3B Rachel Elnaugh, the former dragoness says that "women tend to have much more emotional attachment to the companies they create than men". Quoting figures from her research, she claims whereas 54% of men are driven by money and 45% by emotion, for women the figures are 34% and 65% respectively.   The creative world has more than its fair share of female business owners and managers than most other sectors. Passion and emotion are oft quoted as key ingredients for creativity so do you think that creative businesses run by women are more successful than male dominated companies? Creative Business Wed, 02 Jul 2008 15:18:32 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=E45A7A74-1185-BAC1-E9DA223C2B5B4E3B http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=4A3F842A-1185-BAC1-E97FE90C0225D0F4 According to research during the early 1990’s recession by The WPP Centre for Research and Development, businesses that maintained or increased their advertising spend during a recession gained market share significantly faster than when the economy was growing. I am always a little sceptical of research sponsored by interested parties. Putting that to one side, if the research is right, this could have interesting implications for new business development in your creative business.  What do you think, could you capitalise on this or are your clients reducing their spend? Creative Business Mon, 02 Jun 2008 17:07:34 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=4A3F842A-1185-BAC1-E97FE90C0225D0F4 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=A9F9564B-1185-BAC1-E992BB045413F890 Self employed freelancers can be a tax problem waiting to happen. If the tax man decides they should have been treated as employees, he will ask you for the PAYE and NI you ought to have deducted from their wages plus employers NI. The tax man can go back 6 years. Once the tax man follows this line it is up to you to prove he is wrong. The classic solution is to tell your freelancers that you will only work with them if they work for you via a limited company. However IR35 rules can bite where a freelancer provides services under a contract between you and an intermediary (the limited company) where but for the existence of this entity they would have been an employee. Documentation which does not include phrases that give the impression they the freelancer is under your control and does not give certainty of continued work, allows the freelancer to substitute an alternative person and does not give the freelancer any rights such as holiday pay, sick pay, minimum working hours or set hours, pension etc is essential. You should make sure that the facts stack up too – for example the freelancer should not be included on internal staff lists, phone lists or attend staff entertainments (other than as a separately invited guest). If the freelancer is working as part of a team record that this is so staff can learn from their expertise. Tax is a complicated area and each case is different so you should speak to your professional tax advisor and not rely on the above information. Financial Clinic Fri, 02 May 2008 14:11:40 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=A9F9564B-1185-BAC1-E992BB045413F890 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=1864579D-1185-BAC1-E931C37382E63587 A culture without trust displays symptoms such as cynicism, lack of openness and transparency and fear (of people and making mistakes). The best people chose where to work and who to work with as either colleagues, suppliers or clients. Creating a trust culture in your business will not only improve your and your staff’s job satisfaction and motivation. A healthy trust culture will also improve client, supplier and staff loyalty. How do you foster a trust culture in your business? Leadership – Set the tone, people pick up on the leader’s values. If the leader is not trusted then you can’t create a trust culture. Values – Ensure that integrity and honesty are high on your list of values. Commitment – People need to be rowing in the same direction and in tune with each other. Force and pressure are not as effective in driving good performance as freely given commitment to shared goals. Learning - Using mistakes as learning opportunities rather than as fuel for a blame culture. A blame cultures reduces (good) risk taking and leads to concealment of errors. Fun – High performing companies are enjoyable places to be at. Openness – Sharing information and good communications reduces misunderstandings and concealment. Does your company have a trust culture? Do you think it matters? Creative Business Fri, 04 Apr 2008 07:43:59 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=1864579D-1185-BAC1-E931C37382E63587 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=AD4178CB-1185-BAC1-E955D96C274310F0 Poor invoicing can be damaging to your cash flow and ultimately to your business. What can you do to ensure that you avoid unpaid debts from your clients? Make sure you understand what your client needs to ensure you get paid on time: Who should your invoice go to? What address should your invoice be sent to? What detail in terms of description of the service is required? Does your client need you to obtain a purchase order and quote the number on the invoice? Is it clear who the client should make the payment to? If the client pays electronically, do you quote the necessary bank details on the invoice? Are your agreed payment terms specified on the invoice? If you are VAT registered do your invoices comply with the regulations? Managing your invoice process: Are you invoicing as soon as possible rather than waiting until the end of the month? On longer projects are you invoicing in advance or along the way rather than at the conclusion of the work? Do you keep your clients informed along the way so that the amount you invoice isn’t a nasty surprise for them? Do you call your client shortly after you have sent your invoice to check that they have received and approved it? Following these simple steps and being as professional about your invoicing as you are about your creative work should make sure that your invoices are working for you. Financial Clinic Fri, 14 Mar 2008 12:26:32 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=AD4178CB-1185-BAC1-E955D96C274310F0 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=700A16A9-1185-BAC1-E9817E165E38D6EA The effects of the credit crunch in the UK are now showing through in banks requiring tougher borrowing conditions on new lending and renewals of existing facilities. These conditions are surfacing as the banks seek to limit their own exposure through strengthening their security and imposing harsher covenants. Recent months have also seen some of the weaker retailers disappearing from the high street. Conversely, Sir Martin Sorrell predicts that the marketing sector will grow this year – boosted by Euro 2008, the Olympics and the race for the White House – before the credit crunch takes its toll next year. Some big businesses are also still turning in strong profit results. So is the economy weakening and are things about to take a turn for the worse as far as the creative sector is concerned or will things turn out OK? I suspect that reports based on the world wide economy, global marketing groups and major multinationals “average” out the big picture and that you should be looking closer to home if you want to anticipate the market place.   My advice to creatives is that they should look at how their own clients are positioned for their local economy. For example, if your clients are financial services businesses or depend on that sector, or are retailers, your view of the future as it relates to your business might be on the less optimistic side of things. What do you think the temperature of the creative marketplace is? Creative Business Sun, 02 Mar 2008 15:09:12 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=700A16A9-1185-BAC1-E9817E165E38D6EA http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=07BC0191-1185-BAC1-E98F927BB2C351F3 As times are beginning to get tough for the creative sector and the pressure builds how will you respond? Psychologists recognise strengths and weaknesses in key characteristics of creative individuals and what they can mean for how you work under pressure. Dr Rob Yeung has identified the following. If you recognise any of these characteristics in yourself and relate to the strengths then beware the weaknesses when times are tricky. Imagination Strength: Thinking out of the box and coming up with visionary ideas. Weakness: Unfocussed and unable to turn ideas into reality. Confidence Strength: Single minded and determinedly focusing on a goal. Weakness: Ignoring other opinions even when these are valid. Shrewdness Strength: Insightful regarding behaviours and motivation of others. Weakness: Incorrectly not trusting people by misreading situations. Meticulousness    Strength: Careful and precise with high standards. Weakness: Inflexible and unreasonably perfectionist. You can't change yourself but you can make an effort to change your behaviour so watch out for times when the dark side of your character show up. Creative Business Mon, 11 Feb 2008 09:03:24 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=07BC0191-1185-BAC1-E98F927BB2C351F3 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=BFBA66BD-1185-BAC1-E9CEC60B36C535CF Your bank manager is an obvious place to start if you need additional financing, whether this is an overdraft or invoice based lending. A financial forecast will give you the answers you need. Here are some other questions you should be thinking about: Do you have the right funding structure? Is your working capital cash sufficient? How are you funding capital expenditure/investment? Are you getting cash in as quickly as you should be? Is your WIP billing process helping or hindering? Is your cash collection process dysfunctional? Are you paying out cash sensibly? Do you have commercial terms with your suppliers? Do you control your overheads? Are you minimizing your tax? Before you visit your bank you should know how much funding you require, when you need it, what it is for and how and when you are going to pay it back. The bank will ask these questions. Financial Clinic Mon, 28 Jan 2008 09:28:59 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=BFBA66BD-1185-BAC1-E9CEC60B36C535CF http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=9B682E91-1185-BAC1-E9CE312E5FD4B826 Whilst many agencies are undoubtedly well run businesses with sound financial disciplines it is well known that clients have long held the general view that agency financial disciplines are weak, certainly in comparison to those in their own, usually much larger businesses. Typical complaints from clients about their agencies include budget overruns, frequent changes to costings provided by the agencies and opacity in their financial dealings. Agencies and agency staff have been found guilty of defrauding their clients of substantial sums of money and whilst these instances are thankfully very rare, they do not help the cause of agencies. The client community, spurred on by the commercial and regulatory pressures placed upon them by the market and Sarbanes-Oxley, has responded by focussing their increasingly professional procurement functions on marketing spend both pre and post appointment of their agencies. The growing importance and influence of ISBA’s COMPAG group is another signal of just how seriously clients and client associations are responding to these pressures. Many agencies perceive the involvement of client procurement as a threat to their profitability, which may be true. They may also see procurement as interfering in the “creative” process. I would argue that this attitude which is held by many agencies, large and small, is misguided and ultimately damaging to agency profitability. This closer involvement of procurement has enforced some improvements to agency financial discipline. It would not be surprising to know that the first time many agencies really understand the dynamics of their own cost base is in attempting to respond to information requests coming from procurement. Procurement wants to know metrics such as staff costs per hour, amount of agency overhead per employee and staff utilisation. Of course this type of information and the insight it brings should already have been very familiar to agencies, but very often it has not been. Agencies should be welcoming the professionalism that procurement invariably brings to the commercial relationship they have with their clients and equally importantly they should be using this to improve the general financial wellbeing of their own businesses. Unfortunately however, too often the impact of client procurement is applied in silos, done for those clients who demand it and not for those who don’t. For as long as these new rigours are applied piecemeal they will fail to cascade through the totality of the agency’s financial and commercial disciplines. Why is this? One factor is the under-resourcing of the accounts department, either in the number of staff or their competence which is commonplace in the agency world. Additionally, outside of the large groups, agency owners and managers often lack access to the commercially focussed finance director capable of making the case for it. Agencies who continue to under invest in their financial staff and systems and who pay lip service to the commercial disciplines required of their operational staff will continue to be at risk from fraud or financial failure when they need not be. Agency chiefs will ignore the true benefits of client procurement at the peril of their businesses. Financial Clinic Mon, 21 Jan 2008 08:12:51 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=9B682E91-1185-BAC1-E9CE312E5FD4B826 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=78F0B070-1185-BAC1-E951721AC25473F0 60% of organizations do not link their strategy to their budget, yet according to the London Development Agency the most profitable businesses prepare business plans which are linked to strategy. If your strategic plan is vague or incomplete then your budget is not going to help you to implement your growth strategy. How do you ensure that your business plan helps you to grow?  The effort going into a business plan should be 80% on strategy and planning and 20% on the budget numbers. The numbers often take much longer than necessary. Make the budget easier to prepare by modeling based on your key performance indicators. This will force you to rethink your assumptions. A professionally developed financial model will save time. Here are some questions to help your planning: What will your business look like in 1 to 3 years time? Where are your new sales coming from and why should new clients buy from you? What resources do you need to deliver your services? What and when are the marketing and business development activities that need to be undertaken and by whom?  Are your planned actions measurable? Can you measure actions as well as outcomes? Do your plans include accountabilities? Are specific people responsible for delivering each activity? Creative Business Mon, 14 Jan 2008 15:35:15 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=78F0B070-1185-BAC1-E951721AC25473F0 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=45EE779D-1185-BAC1-E9F6D75D166E3A39 Finding the right space for your business is important if you want to grow your company. You will probably want to be in the best place, in smart and comfortable surroundings with flexibility and at the cheapest price. You will have to compromise on one or all of these features so what should you consider before signing that lease? Here are a few thoughts: 1. What does your business need? Just offices, right? No. What about studio space with good natural light? Underground space if you need recording studios?   Reception space, meeting space, storage space?   Do you want your staff together on one floor or is it OK to be spread onto more than one floor? 2. How big should the space be? Enough space to fit the current staff into, right? No. If you are growing how much space will you need? You should balance this with the risk of overburdening yourself financially. See 7. flexibility. 3. What facilities do you need? Just the usual, right? No Do you need manned security to make sure you don't lose all of those Macs and recording suites? What about good floor trunking systems? Air con? The right lighting for your creatives? Somewhere for the spray booth with proper ventilation?     Car parking any use? 4. How important is the location? I'm the boss so handy for me to get to, right? No. In a central city location? A business park? Suburbia? Near tubes, trains, airports? Near suppliers/clients? Close to a university or college? 5. How much does image matter? We could work out of a shoe box, right? No. Do you have clients in often? What image do you want to project? How do you want your staff to feel about working for you? Who are the other tenants? Who is next door to your building/across the road? 6. What can you afford? The rental looks OK, right? No. What about the rates and service charges - these will usually add at least another 35% to the rent? Can the service charges be capped? Who is responsible for maintenance? Electricity? Gas? Don't forget VAT. 7. How much lease flexibility do you need? The standard lease offered, right? No. Length of the lease? Rent reviews? Rent free periods? Security deposits? Periodic tenant break clauses? Dilapidations? Sub-letting provisions?  If you are considering letting space in 2008 these are some of the key considerations you should be checking out. If you have any tips to add or any horror stories relating to taking up office space let's hear about them.  Creative Business Fri, 04 Jan 2008 17:52:11 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=45EE779D-1185-BAC1-E9F6D75D166E3A39 http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=E77178D7-1185-BAC1-E94D4A77486BAE45 Barclays Capital have allegedly spent £600,000 on a Christmas Party for its staff this year according to City A.M. Most businesses of course can't afford to spend that kind of money on a Christmas party. The tax man allows companies to spend up to £150 per head on a Christmas party, though you should speak to your accountant as the rules need to be understood and read in the circumstances of your business. What about tax on Christmas gifts for staff? Well, the tax man has said that employers can provide seasonal gifts tax free as long as they are "trivial" and he actually says a turkey, a bottle of wine or a box of chocolates count as trivial. Unfortunately he does not define trivial although he does say a case of wine or a hamper might not be trivial. If you want to give a Christmas gift to staff which is not trivial, say a hamper, then it would be taxable. However,  if you were spending less than £150 per head on your staff Christmas party and you provide that hamper as part of the Christmas party then the hamper could be tax free as part of the £150 per head (as long as you don't go over £150 in total). A way of doing this would be to provide the hampers as a prize in a game at the party or a raffle. This blog is not tax advice and can't be relied on as such as  tax always depends on your company's individual circumstances and you should always take advice in advance from your professional advisors. Financial Clinic Mon, 17 Dec 2007 09:31:21 GMT http://www.creativematch.co.uk/blogs/ComeintotheFD'sofficeplease./front.cfm?action=display_blog&bid=E77178D7-1185-BAC1-E94D4A77486BAE45