Merry Christmas Everyone….?

It is difficult to know in which sort of mood one should approach the coming festive season. On the one hand there is the inherent optimism that every entrepreneur lives by. On the other end there is the endless stream of economic statistics that leave us none the wiser as to whether we are finally on the road to recovery or facing the prospect of a triple dip recession.

Whatever mood you are in it surely cannot be enhanced by the behaviour of our elected representatives who on the one hand indignantly lambast greedy multinationals for applying laws that the MPs themselves have drafted and approved (although clearly not understood) whilst simultaneously hiring a lawyer to fight for the right to apply the letter of the dubious rules regarding their expenses and the profits made on their taxpayer financed second homes.

Clearly they have no idea of the further contempt that they are likely to be held in as their obvious self-interest is contrasted with the exhortation that we are all in this together.

The shenanigans surrounding MPs and big business seem a world away from the day to day struggles of those of us who work within enterprise Britain. And yet we need them both to wake up and realise that they have to get their combined acts together to keep the economy moving forward in a more sustainable way.

We need big business to play fair with their taxes and their wallets, using their cash piles to stimulate investment and pay their smaller suppliers on time. We need politicians to use their powers positively to deal with unnecessary regulation to help us deliver the growth that we know we can with the right support.

Wishful thinking? Maybe but it is the season of goodwill and goodwill is probably what the economy needs most right now.

Anyway I have decided to remain cheerful and am determined to have a good Christmas. 2013 will no doubt still provide lots of opportunities to those willing to go out there and grab them. To everybody out there, thank you for reading my thoughts this year and have a very merry Christmas and a happy, healthy and prosperous new year.

Christmas Cheer…?

We have a tradition in our household that Christmas doesn’t get mentioned until 22^nd November. That means that we can focus on our youngest daughter’s birthday the day before without any distraction. So no talk of present lists for Santa, no Christmas songs, no writing of Christmas cards, nothing. We might make an exception for mince pies though….

Clearly this is not an approach that is going to appeal to retailers out there. Given the current economic uncertainty, the recent downbeat forecast from the Bank of England and the ever present fear of a triple dip recession, they are no doubt desperate for Christmas shopping to start as early as possible so that they can reap the benefits of the sustained burst of consumer spending that normally takes place at this time of year. 

And yet in spite of the gloom that persists I think there are some positives around that should make retailers and other businesses feel slightly more confident than maybe they have done for a while. Not least it is worth recalling that it was only a month or so ago the third quarter growth figures (which have recently been confirmed) showed a significant one per cent increase in GDP.

So what other grounds for optimism are there? Employment levels have remained stable over the past few years in spite of everything. The private sector seems to be picking up the slack as the public sector contracts, which itself does not appear to be happening as quickly as had been feared. The gap between price inflation and pay rises has been narrowing. Interest rates remain at record low levels and are unlikely to move upwards until well into next year at the earliest which means mortgage payments remain manageable. All of these factors will hopefully provide a fillip to consumer activity.

Even the failure of a major retailer such as Comet will have knock on benefits for other similar retailers. Equally good businesses who have been investing in their staff and products, which in the case of retailers means investing in their stores, will be creating the right environment for attracting customers.

And above all as Noddy Holder’s pension fund “Merry Christmas Everybody” will no doubt be bellowing out in shops everywhere “It’s Christmaaaasss!”. Whatever doubts they have about the economic situation people always find a reason to spend in the run up to the festive season. Even if they do wait until 22^nd November to start doing so…..

Pon-De-ring Rihanna….

There is the odd occasion when I wish I had the ability that the female members of my family have to draw. Then I could sketch a contrast between a picture of Rihanna as the star she undoubtedly is alongside another with the hundreds of people who make up Team Rihanna, ranging from cigar chomping champagne swilling industry execs, through designers and stylists, to runners and gofers pandering to every whim. It is likely the odd musical person would be included as well.

OK it doesn’t look as good in words as it would as a picture but the contrast between the image and reality is stark. It takes a lot of people working very hard to create a product like Rihanna and yet she is seen, and is expected to act as, the star of the whole thing. One can see a lot of parallels between this and the attitude of corporate CEOs. Hopefully Rihanna appreciates her team better than such CEOs seem to recognise the efforts of their minions.

Perhaps unsurprisingly Enterprise Britain wasn’t invited on the Rihanna plane jaunt that has just taken place to promote the Barbadian singer’s latest album “Unapologetic”. This involved a hundred or so journalists on a 777 plane travelling through 7 countries in seven days. By all accounts (or blogs and tweets as we must now say) they ended up getting less than 7 hours sleep, spent an inordinate amount of time waiting for the lady herself to show up, and ended up resorting to high jinks to deal with their increasing fractiousness. I think I could have handled that so that you didn’t have to…  

Still, in spite of the fact that I am probably not its target audience, I decided to give the album a spin, I mean stream (showing my age again….). “Unapologetic” is a well constructed pop album that no doubt closely reflects the life of a free spirited 24 year old in a way that others of  similar demographic will no doubt relate to. The adult themes and language may not meet with the approval of the parents of her younger fans (and the duet “Nobody’s Business” with ex-boyfriend Chris Brown, who pleaded guilty to assaulting her in 2009, is just sick inducing) but all in all it has some excellent tracks and will no doubt sell shedloads.

(Incidentally why has my latest iTunes newsletter highlighted “Unapologetic” alongside promoting free episodes from the National Geographic channel? Nothing to do with her exploits in a Northern Irish field I’m sure….)

Lessons for Enterprise Britain? Well you all know about working hard, creating a team and being a figurehead. You’d probably like the resources to promote your latest product via 150 journalists on a 777 airliner. But ultimately you might console yourself that for every Rihanna there are countless wannabes who did not make the grade. The secret of being successful remains a combination of talent, hard work resources and a little bit of ..er.. luck…..

Taxing the accountant…

The furore over the use of personal services companies in the public sector and the BBC shows no sign of abating (although it has just been pushed off of the tax news front pages by the story that Starbucks has paid no UK corporation tax for the last three years). Sadly the discussion does not seem to be able to move beyond comparing the 20% small companies corporation tax rate with the 50% higher income tax band.

In reality it is far from simple to do a true like for like comparison as there are a number of tax rates that need to be taken into account at various points in the calculation depending on individual circumstances. In case anybody is interested they include 2%, 10%, 12%, 13.8%, 20%, 32.5%, 40%, 42.5%, 50% and 62.5%.  

This has been amusingly illustrated by the fact that three eminent tax commentators have got themselves in a twist over calculating the potential savings that can be achieved through using a personal service company. One even stated that in certain circumstances individuals operating in such a way can end up paying more to HMRC (that is presumably the case when they fall foul of the IR35 regime and have to pay penalties and interest).

I won’t name these people to save them any embarrassment but if accountancy experts are struggling to make a sensible calculation under current tax legislation, what chance does the average taxpayer, or even a hard pressed employee of Her Majesty’s Revenue and Customs, actually have?

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Typical! You do a blog about Justine Greening, and how she is using her accountancy skills to enhance her role as a Cabinet minister, when before you know it her old department is embroiled in a scandal about how it failed to make the numbers add up when awarding the west coast rail franchise.

It has since emerged that an excel error made by a DFT minion  seems to have been the main cause of the problem. That in itself is not a surprise as too many people still seem to implicitly trust anything that gets produced on a spreadsheet.

However what really struck me was that such is the turnover of ministers in the Department of Transport that it was possible to point the figure of incompetence at any number of parliamentary individuals, who of course all duly denied any culpability.

To be fair to our elected representatives (as you have to occasionally) it seems unreasonable to expect them to grasp the complexities of their departments in the short time they seem to occupy the portfolio. Equally, to be fair to the departmental minions, it must be difficult to chop and change the way you do things in order to satisfy the latest incumbent. But of course the whole process is terribly unfair on the poor saps that have to pay for the whole thing i.e. you and me (but apparently not Starbucks…..).

Meanwhile I am going back to check my spreadsheets yet again….

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Grateful thanks to all who have supported my British Swiss Marathon Challenge so far. I successfully completed the first leg in London in a better than expected time of 1:52:42 and am now busy training for the Lausanne half marathon in a week or so’s time. You can still sponsor me at

http://uk.virginmoneygiving.com/britishswissmarathonchallenge

Once again, thank you.

If you liked 50 Shades Of Grey….

…you may not be the biggest fan of my finance based blog. Not that I would make any assumptions about the readership of the Enterprise Britain or make any judgements as to its literary tastes. It is just that whenever I look in a bookshop now it seems that almost everything is boasting that if I liked 50 Shades Of Grey I would love (insert suitable title here). Maybe it would help if I actually read the damned thing….

I do however read a lot of Scandinavian crime fiction and therefore am used to the comparisons with that Lisbeth Salander trilogy that began with “The Girl With The Dragon Tattoo (although I think they should really say “If you didn’t manage to finish that Stieg Larsson book then you’ll definitely enjoy reading….”).

The desire to make comparisons with the latest hit product, be it in books or music or film, is nothing new. The 50^th anniversary of the release of “Love Me Do” is a reminder of what happened when The Beatles hit the big time. Having suddenly discovered that groups with guitars weren’t actually “on the way out”, record companies rushed out and signed virtually any young band with a six stringed instrument or two. If they hailed from that city on the banks of the River Mersey then so much the better.

Cashing in on the latest big hit is a proven sales driver albeit one with diminishing returns as another new craze or fashion emerges. In many ways it is a sign of laziness. The real talent is identifying that new craze at the right time and riding the wave profitably for a long as possible, while keeping a careful eye out for the next big thing.

Of course in our own businesses we never jump on the latest bandwagon to draw attention to our services do we? Everything we offer is totally original and in no way a copy of a much better product isn’t it?

Clearly we should be working harder on what makes us different rather than pretending to be the same as something that has worked before. If we don’t I guess we we will continue to be greeted with bookshelves groaning with “mummy porn” or “scandi crime” titles while doing our best to find something different and original.

Mind you if you can’t beat them, maybe you have to join them.

“If you liked the way your accountant prepared your statutory accounts and tax computation, then you’ll love the way your part time finance director takes care of all of your business financial management leaving you free to do what you like doing while making more money with less hassle.”

It’s catching isn’t it? Possibly needs a bit of work though…..