We’ve hit the National Borrowing Target!

News has filtered through and been hailed by economists this week that the UK government has managed to reach its annual borrowing cut target. What benefits could this bring to those who are looking to sell their business in the current economic climate?

National borrowing rates directly affect businesses. This is because, the more the country borrows, the more prices, taxes etc. go up. This effects a company’s bottom line and weakens their position when trying to persuade a potential buyers of the benefits that said company can bring to their own bottom line.

A Victory for the Budget

It has been reported that the nation’s government borrowed a sum totalling £107.7 billion in the previous financial year. This may seem a lot, but in fact it was significantly lower the £115.1 billion borrowed by the country the year before.

So what have the government set as the target for national borrowing rates? In the budget the Chancellor suggested that for the full year, the budget deficit should measure £107.8 billion. This means that not only has the national economy narrowed the gap, but it has done so by £0.1 billion than it expected to; always good news!

Specifically, the numbers quoted on the issue by the Office of National Statistics (ONS) suggests that leaving out fiscal interventions, borrowing fell from £11.4 billion in March 2013 to £6.7 billion for the month this year. Furthermore February’s data was revised from £9.3 billion to £8.8 billion.

A Psychological Boost

Figures like these have both physical and mental effects for UK economic growth, and one is as important as the other. Howard Archer, chief economist at analysts Global Insight commented on the issue:

"While in reality, it made little difference whether the chancellor just hit or just missed his fiscal target for 2013-14, the fact that he did make it provides a psychological boost for the government and it may support belief that he can hit his longer-term targets."

At RTA Business, we recognise that the psychological effect this will have on buyers will help you in your quest to sell your business. It will further convince them of the sustainability of the economic recovery, which will give them more incentive to expand by buying your business.

How Can You Effectively Handle Customer Complaints?

Customers with a grudge are like a nightmare you can’t wake up from when you’re looking to sell off your business. They’re there, always looking to discredit you, and it makes it that much harder to find a buyer. How can you effectively handle customer complaints so that the problem doesn't snowball?

The customer complaint is such a delicate balancing act. If you’re too lax with them, if you don’t address their concerns, they can get angry and angry customers tend to take to social media accounts and blogging sites to vent said anger. If a potential buyer sees that, you can forget selling them your business.

However if you’re too attentive to the customer then it can be just a harmful to your business model. The customer can be too demanding and that uses up valuable time and resources that you could use to increase your profitability in other areas. So how can you avoid either conclusion?

Customer Care: A Balancing Act

It really is a balancing act and there are some steps you can take so that customer complaints don’t hit your ability to sell your business. Start by training up your staff. Let them know what to expect from customer complaints and how you would like to handle it. Run some workshops so they can get a feel for the experience.

It’s also important that you empower your staff. It’s all a self-confidence game and you need to think of it like you would parenting. Kids don’t respect weak parents who let them get their own way – they also don’t respect parents who have to shout to claw back their authority. Complainers work in the same way. Empower your staff so that they deal with customer complaints calmly and collectedly.

The next point to make is clarity. You've always got ask customers to clarify the points they are making. Mistakes are most often made when the staff member and the customer get their wires cross, and this sets the customer off. It’s such an easy problem to address as well, just encourage your staff to ask for clarification on anything they are unsure about.

The final way to effectively handle customer complaints is to make sure that your staff know how to speak to customers. Here are some tips to pass on to your staff so that they minimise the risk of offending customers:

• Be Polite: Be polite at all times, nothing makes a customer angry like an impolite staff member; it makes it look as though you don’t care about their complaint
• Be Respectful: Your staff are representing you, they are professionals and they need to act as professionals. Using slang term, address customers by nicknames, that sort of thing, implies that your staff neither respect the customer or the company they work for. It makes you look unprofessional.
• Be Nice: It may seem insignificant, but it really isn't. Warmth attracts warmth. If your member of staff is nice to talk to, if they’re open and professionally friendly, the customer is a lot more likely to feel as though they can behave in a cooperative manner to address the problem at hand.

Crafting an Effective Business Leadership Style

If you ever hope to sell your business, you need to make it attractive to potential buyers first, which means you need to show its capability for profit and expansion. One of the best ways to foster these qualities in your business is to craft an effective business leadership style. So how can you go about that?

There’s an old saying that applies here; cut off the head and the body will follow. The head of the company is vital to its success; they are its face, its decision maker, its resource provider etc. Everything falls apart if that leadership is taken away.

From this we can also argue that a business has no hope of ever becoming profitable if you don’t craft an effective leadership style. For those people who have never been in positions of leadership before, this can be a tall task. This is why RTA Business Consultants has compiled this list of top tips you can use to become an effective leader.

Delegate

No man is an island and no one can ever do it alone. This is why you need to learn how to delegate. Effective delegation proves that you trust your workforce and that you rely on them to help grow your business. It creates a more positive work environment and increases productivity.

Think About Who You Hire

In order to delegate you need to make sure you are hiring the right people. One person who fulfills the job specification is worth ten people who partially fill it. Look for people who are problem solvers and who you can work with. You can only be an effective leader if you have the right ‘tools’ to work with.

Express Yourself

One of the worst offences you can make as a boss is to present your expectations in an unclear way. It slows down productivity, lowers your profit margins and makes you look like a weak leader who isn’t capable of communication. Always be clear with what you expect from employees.

Foster Respect, Not Friendship

Whilst you want to have a good working relationship with your employees, you don’t want to get too pally with them. At the end of the day, you are the boss, and establishing a certain professional distance reminds your employees of your position within the company. If people think you are a push over, they won’t listen to you.

Open Your Ears

We can’t stress this enough, always listen! Think of it as a creative process. Your employees bring fresh experiences and perspectives to the table that you can use to expand your business. They might know something that you don’t, or they may have an insight that you haven’t considered. 

UK Productivity Is Picking Up but Has Long Way to Go

It’s been a grim few years for the UK productivity rate as the recession has hit every part of UK business, right down to the average worker’s hourly output. Good news then this week for the business community, as UK productivity rates are beginning to show signs of life again. What could this mean for you if you’re looking to sell your business soon?

Productivity refers to, literally, how productive your workers are. Productivity directly affects profit margins, which in turn affects your ability to sell your business. The recession hit productivity because it hit the resources workers had to carry out their jobs with. That’s why the recession wasn’t a great time for the business acquisition industry.

The economic recovery has been such a relief for everybody. A stronger economy means that more resources are available for workers to use to help expands the profitability of your business. However it also led to a rapid rise in the employment rate and one consequence was a sharp decline in productivity numbers.

So what are we dealing with here? This week productivity started to grow again, as the rate of output per hour grew by 0.3%. This figure highlights the fact that Britain has faced a productivity problem for years; rising employment in the wake of the financial recovery has led to a rapid decrease in productivity. However we could be clawing our way out of it.

The issue is that productivity is still 3% below 2008 levels and 21 percentage points below the average recorded for other G7 countries. The widest gap since 1992, the slight recovery of output numbers disappointed many in the finance industry and highlighted just how much work we have left to do.

The Financial Times reported Philip Rush, an economist at Nomura, commenting on what the figures mean. Rush said that “It was a small pick-up in productivity, one that disappointed even my pessimistic expectations.” In fact the economy expanded slightly faster than the rate of UK productivity and this is a problem we need to address if we wish continue to recover from the ravages of the recession.

So RTA Business Consultants asks, what does this mean for you if you are looking to sell your business? Productivity is essential to any business model, and you can’t grow your business without it. These figures show that, yes, productivity is picking up, but there’s a long way to go. If you are thinking about selling your business right now, productivity is something you need to be thinking about.