In years to come what will historians say? Was it quantitative easing that allowed the global economy to react so positively to the banking crisis, or did the weather have much more to play in this forecasted economic come back?

Those who took a holiday in the UK this summer seemed to spend most of August dodging the rain, whilst those who went abroad were met with 40-degree temperatures. But with a low pound, both the dollar and euro have significantly increased our holiday costs. Research suggests that the simple local French meal has increased by 20% over the last two years, and the pound for dollar rate feels like 1 for 1. This is partly due to weak sterling but also to an increase in taxation and cost of sales both home and abroad.

Next year, will the economy continue to expand because ‘frustrated’ Britain went abroad again? The airlines certainly hope so, and the travel agents has been longing for it this year. It would certainly boost the High Street as we shop for those new outfits and maybe JLP could put it’s ‘make do and mend’ pamphlet way for another year.

The High Street will come back to life sooner rather than later, if the banks ease credit or private equity closes that gap. For the government to keep spending at current rates, will only prolong the recovery as the tax bill increases for us all and quantitative easing takes longer to pay back.

The British consumer has always spearheaded economic recovery, and this time is no exception. Confidence must return to the High Street, before we can call an end to the recession. But here’s the killer fact. Historically the general economy recovers 2 – 5 years after the financial markets. So if today is the end of the financial recession, (according to the Financial Times) how will you be competing in two years time?

Today petrol has gone up 2p per litre and UK PLC has agreed to lend the IMF £11bn. Youth unemployment is rising at an alarming rate and Universities are reducing admissions. None of this suggests recovery until you look at our biggest growth sector according toUK Trade and Investment Services

We all need to eat and drink. Maybe global warming will be the economic saviour that the Prime Minster has been looking for.

Industry experts might also suggest that real profit had been eroded by then as well. Organic growth in that period had been, at best sporadic. What had stimulated the economy was the near doubling of invisible earnings highlighted in the annual GDP figures of UK Plc.

Easy money made available through the global financing system, created a false sense of wealth as companies acquired, merged, invested and de-invested in each other, their divisions and rewards.

Those industries that actually created genuine profit, made so much that they built up huge war chests, only to invest in new markets, geographies or technologies.

Once this fashion had been fully exercised, new premises became the next ‘black’ Companies developed campuses, self contained factory styled building blocks centered around lakes, fountains and five star restaurants. Employee welfare became the order of the day as legislation encouraged the employer to head off any legal dispute with employees as companies introduced work life balance initiatives, training plans and work from home strategies.

This had the effect of allowing the employee to believe that the company worked for them. This behaviour manifested itself from the directors down, within some of the worlds largest companies.

Those organisations that had been split up, privatized or recently floated demonstrated these behaviours in abundance.

To check if your company fits this bill, ask yourself how many six sigma black belts are in your business, and if they actually add any value to the process.

As the cats became fatter, the gene pool became shallower. Now we have to replenish stock and start over.

1. It is a good idea to clearly state your sales credit period on your order confirmation documents and sales invoices and enforce the period by chasing customers as soon as their payment is overdue.

2. Encouraging customers to pay quickly by giving small discounts for completing their payment within your credit period.

3. Send your invoices for completed work as soon as possible . Waiting for the end of the month will only provide further delay to payment.

4. If the project is running over several months negotiating split payments keeps the cash coming in.

5. Analyse your entire stock for age and quality, Discount low moving goods to shift them or maybe reducing the amount of stock lines or quantity. This may reduce the storage and handling costs.

6. By talking to your neighbouring business. Looking for common supply relationships such as landlords. Group together to re-negotiate payment terms.

7. Review your supplier agreements for on-going services such as web support, telecoms, security, energy or cleaning.

8. To reduce the wage bill offer your staff flexible hours or part-time working. A salary sacrifice scheme can also produce savings if its implemented properly, with HMRC approval.

9. Tax free benefits such as the use of bicycles, childcare vouchers, or pension contributions are swapped fr salary, and the national insurance and tax savings are shared with the employees.

10 Link the profit of th sales force to the profit sold, or to the speed with which the customer pays for the order, rather than to the volume of units sold.

11. If new equipment is required look at the second hand market. Alternatively look at leasing or hire purchase agreements.

12. review your VAT position an the schemes you use. Does the flat rate of VAT still work for your business in light of the changes to VAT rates in December 2008.

13. Keep your taxable profits below the large company tax threshold of £1.5M by timing expenditure and bonuses.

On the surface this could apply to a weak order book or product portfolio and cost supply chain. These are elements within the control of many business leaders.

What is less tangible is business confidence. This is not the same as ‘confidence in your business’ but everything to do with a businesses desire to buy. In this economy its not enough to have a strong proposition so what is the missing ingredient. In the dot com era, those that survived, understood the importance of business confidence and did not take this for granted.

Creating confidence in your brand for your clients reduces the opportunity for rejection. Human nature will ensure that businesses will seek non core opportunities as the need for cash increases, hence the title of this article. Many businesses fail to look at the macro economics that impact upon success. By not responding to external market forces business can fail to respond.

Businesses leaders have to equip themselves with experience to analyse and adjust.

Over the last 12 months traders, investors and share holders have been trying the track a trend that has shown all the signs of a drunken brawl and the net results has been panic in the markets, loss of business confidence and consumer surprise at the speed of the down turn. With the media, financial experts and business pundits commenting on the dire position of the future of UK Plc, we can expect more bad news to follow, with a greater number of layoffs and increased absenteeism bought on be stress of change.

But lets throw a bucket of cold water over ourselves for a moment and remind each other that those organisations that failed did so because they had been given several reprieves in the good times. The good times were built on de-regulated lending which in turn allowed the consumer to power the economy through several boom to bust scenarios over the last 10 years. The luckiest escape was the tech bubble that burst in 2001. UK Plc should have taken heed then, but public borrowing incentives coupled with the property boom disguised the pain and gave the economy new life.

This time around the banks have been bailed out by the government (but have to pay back at 14% ) This might explain why the banks have been reluctant to lend to UK business. But maybe the level of toxic debt has still to be established and the overall impact of this on the economy has yet to be validated.

Latest forecasts predicts that unemployment will rise to 10% from its current 6.1%, (FT – Jan 25th) The optimists say that in the 1930’s the great depression accounted for 33% unemployment but even then 66% of the US workforce were still working. But here is the but… nearly 50% of the UK plc workforce are employed in the Public Sector therefore translating to only 40% of the private sector employed by the end of 2010. The government bail out does not include laying off the public sector workforce. The public sector pension deficit will increase over this period thereby increasing the the debt mountain still further.

Why does that matter? Because with tax income will fall requiring the Government to borrow more to pay the new debt. Based in current plans, government borrowings are necessary to stimulate the economy but the more the borrowings the longer the recovery.

Is this like a boxing match? Like all boxers there have been winners and losers. Many prized fighters have hit the ropes, and a few over the hill brawlers have sadly passed away. As the last few champions regroup, they are looking around to see what has to be done to stay in the game. There are casualties still to come, but from the mele will emerge stronger leaner, more healthier contenders.

This is a simplistic analogy, but one that has resonance with many within the UK private sector workforce. As the recession bites companies have to take decisive action to remain agile in these unprecedented trading conditions. Such adjustments in corporate behaviour are inevitable.

The initial response has been for costs to be paired back with discretionary spends being clawed back to fatten the trading account. This is the stance company’s took in the third quarter of last year, if not before. As Christmas approached contractors were released further easing the pull on the cost base.

As we move into Quarter 2 of 2009 organisations are seeking to release up to 10 – 15% of the work force as trading conditions worsen. Its now that we see survival syndrome work its way across the work force, as we stay longer at our desks, work harder and try to make ourselves indispensable. As the inevitable redundancy notices land on the desk of some employees, those remaining feel hard done by as their work load increases and they fill the gaps. Consequently moral drops, output falls and teams break up as people leave or go on long term sick.

Operational gaps increase and role responsibility disappears. Organisations or departments start to fire fight process issues. By now the organisation is operating at a minimal cost base barely surviving a 5% increase in demand. Its at this point that moral is so low that an air of fatalism, inevitability starts to strangle operational performance. The weak are let go and the strong survive. Sickness increases and the exit door never closes.

To quote the Chairman of Next. “This is a recession not armageddon”, but even in a recession we need to remind ourselves to smile. Companies need to protect those left behind, those who haven’t been made redundant. Its these people who will form teams to grow the business when the recession is over.

With the introduction EIS Angels have been more willing to take early adopter investments in fledgling start-ups. The reasons for this behaviour is obvious when you look at the percentage increase in Angel investment over the last seven years. A rise of 41% increase in investment has been achieved since 2000 (source – Financial Times 24 January.)

It is widely anticipated that Angel Investment will increase substantially during the credit crunch as banks re-prioritise, but as stated earlier the current pool of angles may be reluctant to invest further hence the need for more investors now.

Central to this approach is an innate understanding of markets, consumer trends, operational performance and fiscal responsibility. We specialise in both Private and Public Sectors including Food Manufacturing, Retail and Local Government.

By providing effective management and leadership to organisations people and function development we collaborate and identify the future for all.