Finance Director

Are you prepared for the collapse of the Euro?

2011-12-15T05:16:00.000Z

There is no escape from the Euro in the news. Politicians in the Eurozone are still faffing around. If the Euro collapses, commentators say that it will devalue. It could become Euro A (strong countries) and Euro B (weak countries), or countries could revert to their previous currencies.

Time for you to consider what the impact might be on your business and to start taking preventative measures....remember your "if onlys" when the banks got into trouble only a couple of years ago.

If your business is just dealing with UK clients and suppliers don't think that it will not impact you because many of your clients and suppliers will be exposed...so you will be too.

What to consider:

Assess where your business is most at risk, plan for it and implement.
Maintain as little cash as possible in your Euro denominated bank accounts.
Collect from clients you invoice in Euros as quickly as you can - better still bill them in Sterling.
If you are drawing up new contracts with Eurozone clients insist on Sterling.
If you have subsidiaries in the Eurozone, repatriate profits back into the UK where you can.
Talk to your bank manager about hedging.

As a specialist financial advisor to marketing agencies and professional firms I know how easy it can be for focus on cash flow to relax and how quickly that can translate into trouble for these people businesses.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

John's website is: http://www.nomizon.co.uk/

His credentials: http://www.linkedin.com/in/johntoppin

Finding free cash for your business

2011-09-26T17:59:00.000+01:00

As a specialist financial advisor to marketing agencies and professional firms I know how easy it can be for focus on cash flow to relax and how quickly that can translate into trouble for these people businesses.

I've been asked to look at this by my regular followers.

So, for the next few blogs, I shall be looking at what you should be doing to ensure that your cash flow stays healthy.This applies equally to lawyers, headhunters, advertising agencies, architects etc etc...

Watch this space.....add yourself as a follower.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash: http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Preparing for outside investors?

2011-07-11T13:56:00.000+01:00

Raising outside investment for your firm requires careful planning.

You will be familiar with the horse trading that goes on in the Dragons' Den..."I will offer you £500k for 30% of the equity" etc....all very much off-the-cuff sounding stuff.

Most business sectors have been used to involving outside investors and in 2011 outsiders will even be able to buy into firms of Solicitors .

You will doubtless want to raise the most money for the equity in your firm. Getting the best value depends on:

1. Managing the timing of when you are looking to get the money

2. Ensuring the firm is professionally run well before you want to ask for money

3. Making the right strategic choices along the way so that your firm's profile attracts a premium rather than a discounted price.

So what should you be thinking about and planning to improve in your firm?

Which features will set your firm apart from your competitors and increase the value and salability of your equity?

There are various rules of thumb used to value equity in people businesses - in terms of multiples of fees or profits. These give a range of values which are then flexed up or down depending on the state of market and the relative strengths and weaknesses of your firm.

As a specialist financial advisor to marketing agencies and professional firms I am aware that it usually takes months and years to make the sort of lasting difference to your business that will increase the value of your equity so you should start working on this now - even if you are a long way from needing to offer equity to outsiders.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash: http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Do company share schemes work?

2011-06-14T17:35:00.007+01:00

Retaining and motivating key employees is one of the most important issues I have dealt with as a specialist financial advisor to marketing agencies and professional firms.

One of the most useful tools, when used properly and balanced with bonus schemes and non financial techniques is some form of equity participation.

Do employees who participate in company equity work harder than those who don't and are they more loyal?

There are plenty of studies that show that staff retention is improved where employees have some form of equity participation but until recently there has been no research demonstrating that equity participation increases motivation.

However,the London School of Economics has now published research that shows that employees with equity participation do work harder and not only that, they are also less likely to tolerate underperformance by their colleagues.

If you already have an equity participation scheme in your business then congratulations. If not then maybe you should be considering introducing one.

Tax approved schemes include:

SAYE linked share option schemes
Company share option plans
Enterprise management incentive share option schemes
Share incentive plans

These schemes need to be implemented carefully so that your position as owner is protected, the company can achieve its objectives and so that the tax requirements are met.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on people: http://www.nomizon.co.uk/people.htm

His credentials: http://www.linkedin.com/in/johntoppin

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

Is your business a winner?

2011-05-09T10:34:00.015+01:00

The creative, marketing and professional services sectors are full of similar businesses with virtually identical offerings, people, technologies and ways of doing things. Despite claims to the contrary.Choosing your attitude will set you apart from the rest of the field.

As a specialist financial advisor to marketing agencies and professional firms my observation is that winners add to shareholder value all the time by:

Thinking from their clients' perspective not their own

Being proactive not reactive

Thinking and acting consistently not add hoc

Being flexible not dogmatic

Focusing on what they do best rather than trying to do everything

Understanding the difference between value and price

For example, when tendering for new business, winners take time to understand how buying decisions are made at that prospect and they structure their proposals around the client's needs and the selection criteria. A successful business allocates resources to the tenders they want to win so that their bid stands out from the start.

In a level playing field, it is all about attitude.

Know what is important and spend your time doing that.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on profits: http://www.nomizon.co.uk/profits.htm

His credentials: http://www.linkedin.com/in/johntoppin

Are you planning to gamble?

2011-03-28T10:45:00.008+01:00

What is the point of the budget you and your staff produced last year?

As a specialist financial advisor to marketing agencies and professional firms I'd venture to argue that for many of you it was a complete waste of time and you would have been better served by using last year's actuals to compare this year's financial performance to and rolled the dice on each decision you faced.

Try it for next year.

A budget is not a business plan..far from it, but you will find that properly written business plans underpin the most successful businesses.So, if you are serious about your business, don't spend any time on the numbers. Instead, think about what you want to accomplish next year, how that can be done and agree who is going to be responsible for doing it, and by when.

Share your thoughts with someone outside the business in case you are losing the plot. Write the plan down. Get the plan out every month and check how you are doing. Don't be afraid to add to it or run the red pen through a line or two.Oh....and when you have written the plan give it to your numbers person and ask them to translate the narrative into numbers.

Now that's how to do a business plan and a budget that is worth having.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on planning http://www.nomizon.co.uk/planning.htm

His credentials: http://www.linkedin.com/in/johntoppin

Is cash flowing from your clients?

2011-02-28T11:58:00.016Z

According to Experian's current late payment index, figures are showing a significant increase in the time taken by companies of all sizes to pay their bills with a big deterioration in the last quarter of 2010.

Large businesses (+500 employees) are the slowest payers...no surprise there then. Remember terms are usually 30 days for many businesses so these businesses are taking 67 days on AVERAGE to pay according to Experian.

Have a look at the full survey at http://www.experian.co.uk/ and check the scores versus your clients to see how you are doing by sector. Remember to add your credit terms to the numbers in the survey!

As a specialist financial advisor to marketing agencies and professional firms I suspect that you may see that your clients are performing worse than the survey is leading you to expect. There are a number of reasons for this, but don't lose heart, there is actually a great deal that you can do to improve the speed with which you can turn work done for clients into cash in your bank by improving your internal procedures.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

What everyone ought to know about Key Performance Indicators

2011-01-27T11:39:00.013Z

Everyone seems to want KPIs for their business.As a specialist financial advisor to marketing agencies and professional firms I have come across the most useful and some rather unusual KPIs.
Here are some common errors:

1.Too many KPIs - e.g. more than say 5.

2. KPIs that are not easy to measure accurately - e.g sales figures that include foreign exchange movements.

3.KPIs that you can't entirely influence e.g. see 2 above, you can't (usually) influence forex movements.

4. Selective KPIs - e.g. dropping KPIs that present bad news...doh!
KPIs that take ages to calculate - e.g. that you can't derive from your standard management accounts.

Finally, a story I heard to illustrate the above (and I don't know whether it is true or not):

When British Airways really was a great airline and Lord King was chairman he had ONE KPI and it was "The incidence of late take-offs". Apparently, so the story goes, he wanted to be told about every late take off when it happened and wanted an explanation.

Think about the simple beauty of this KPI. To take off on time, the engineering had to be right, the crewing, the refuelling, the baggage loading, the check in spot on etc etc...

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on profits: http://www.nomizon.co.uk/profits.htm
His credentials: http://www.linkedin.com/in/johntoppin

New Year's Resolution

2010-12-30T08:51:00.006Z

According to Professor Richard Wiseman of the University of Hertfordshire, most of us will make a New Year's Resolution - maybe to lose weight or quit smoking - but only one in ten will succeed.If you have made a New Year's resolution for yourself or your business, how can you increase your chances of success?

Professor Wiseman maintains that that deciding to revisit a past resolution is likely to set you up for frustration and disappointment. Instead he says, choosing something new or approaching an old problem in a new way works better. Think through exactly what you will do, where you are going to do it and at what time.

For example, instead of promisng yourself to go running twice a week, plan to go running at specific times every week.

As a specialist financial advisor to marketing agencies and professional firms I see that businesses often set new goals or seek to change something for the New Year and with next week marking the return to work a resolution might be on your mind right now.So, if you resolve to spend more time on sales, or strategy, or generating profit or cash, be realistic and specific. Resolution: why, who, what, when and where.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on planning: http://www.nomizon.co.uk/planning.htm

His credentials: http://www.linkedin.com/in/johntoppin

How many historical accidents do you keep?

2010-11-21T15:59:00.010Z

If I had a pound for every time I came across a business owner explaining that such and such - usually something that looks out of place in their business - is there as a historical accident I could probably retire.

Here are some:

1. A new product or service that you are not really geared up for, that you started so as to please a large client.

2. A band of clients that you can't service profitably, but that you stick with because they keep someone in your business busy.

3. A department (or job title, or directorship) created just to keep someone happy.

4. A department that used to do something that earned you money that stays in place long after technology, or the market, passed it by.

You may have one or more historical accidents in your business and if you do, you should be worried.

As a specialist financial advisor to marketing agencies and professional firms, I know that historical accidents make your business inefficient and uncompetitive. They use up cash and destroy your profits.

If you lie awake at night worrying about your business then maybe you should start to deal with these long neglected issues.

As a first step, why not pick the phone up and call John on 07834 380290 or email him at johntoppin@nomizon.co.uk and arrange to meet up.

More on planning http://www.nomizon.co.uk/planning.htm

His credentials: http://www.linkedin.com/in/johntoppin

What do your annual accounts say about your business?

2010-10-19T14:52:00.015+01:00

As a specialist financial advisor to marketing agencies and professional firms I've recently come across two instances of companies losing business because of their public financial information. In one case after the company had won the pitch....and you know how much time, effort and money goes into that.. only to have the client's procurement department reject the company.

Owners of marketing agencies and professional firms are of course usually very careful with how their brands are perceived externally - especially by clients and the competition.

But when it comes to the annual accounts, their impact on the brand's image doesn't even get considered. In the cases I have seen recently, the costs were heavy in terms of the pitch and the lost business. Bankers and key suppliers also look to public financial information when deciding whether to do business with you.

Here are a few tips:

Obtain credit reference reports on your own business and if there are errors get them corrected.
Review your financial forecasts a couple of months ahead of the year end and identify what you should be fixing.
Fix before the year end as it will be too late afterwards.
Don't just let your auditors decide what the numbers should be.
Talk through your objectives for the numbers with your accountants.
Get the right balance between tax planning and financial presentation.

Investing a little time and effort in your annual accounts will easily pay for itself.

As a first step, why not pick the phone up and call John on 07834 380290 or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Are you planning to succeed in business?

2010-09-20T17:28:00.011+01:00

Freedom Exhilaration Challenge Reward.

Are you getting this from running your marketing agency or professional firm?
You should be, because you are probably at the top of the tree in your chosen field, you've taken the leap and accepted the responsibility that goes with it.

As someone who provides specialist financial advice for marketing agencies and professional firms I've seen that the reality, however, for most of you will not be what you expected when you set out...or feel you now deserve for all that effort. It is undoubtedly a little more like.. Danger Frustration Uncertainty and Loneliness.

The irony is that your business, in the creative sector or professional services, probably does incredible and valuable work for it's clients and you are probably surrounded by really inspiring people all day and you (yes you) are probably in charge.

How often have you thought about the contradiction between what you actually have and what you should have?
Have you found some of the answers?
Have you gone on to make any of the necessary changes?

If not then you may have been thinking about this during your recent holiday and wondering how you can make the coming year a better one than the last year. How do you rev up the new year and regain control?

A great way to start is by talking it through with someone experienced and objective that you trust and who has an understanding of and empathy with you, your situation and your business. Someone who understands what needs to be done and how to make things happen in the context of a marketing agency or professional firm.

Paddling your own canoe should be fun. If you're not enjoying it then do something about it, after all you are the boss.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on exiting: http://nomizon.co.uk/exiting.htm

His credentials: http://www.linkedin.com/in/johntoppin

Here is a method that is helping SMEs to grow profitably and generate cash.

2010-08-09T11:48:00.013+01:00

Owner mangers of creative, marketing and professional services firms rightly concentrate on sales, client service and staff retention. As we have seen - especially over the last couple of years - finance is also really important and if you are not making enough profit or generating sufficient cash you will end up having to restructure your business or even closing it down.

If you constantly worry about or are frustrated by your financial situation you really ought to be looking to change something about your business or the way you manage it.

A very effective step is to seek expert professional financial management advice from someone who has hands on experience in your sector.

If you do this, your business will become more profitable and generate more cash.

You will feel more in control of the business and able to concentrate on sales, clients, operations and staff.

The right finance professional will:

Give you a fresh, different and properly informed view of your business and the issues it faces;

Provide access to experience and expertise that is proven in sectors like yours; and

Professional skills on tap and paid for only when you need them.

The decision is low risk because it is a variable investment that can be turned up, down or off and you get senior level advice when you need it.

The best way to find a consultant Finance Director specialising in your sector is by word of mouth. You should ensure that the FD is regulated and registered by a professional body such as the Institute of Chartered Accountants -that way you can be sure they keep themselves up to date and run their own businesses properly.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash: http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

The secret of the extra 1%

2010-07-22T12:18:00.011+01:00

This is a picture of where I was on holiday for the last couple of weeks.

I read "Winning!" by Clive Woodward the coach who masterminded England's Rugby World Cup glory in 2003- simply to contrast his approach with that adopted by the footballers. I would recommend the book to anyone who wants to improve their business as well as to sports enthusiasts.

One of the things that Woodward did was to seek the additional percentage of advantage across the board - whether in preparation, kit, diet, tactics or whatever. These individual increments of advantage compounded up to supporting victory.

Research by psychologists has shown that high performers (like Woodward) set aside more time for exploration, curiosity, considering new ideas and experiences.

3M and Google are well known for allowing staff "dream time". Not all companies or people have the luxury of that sort of time availability but no one is so busy that they can't afford some time to think beyond the immediate problems of business. This applies particularly to you as you are an owner, director or senior manager.

As a specialist financial advisor to marketing agencies and professional firms I know that your business would benefit.

During the summer, or maybe when you are on holiday, have a think about what you could easily improve in your business.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on profits: http://www.nomizon.co.uk/profits.htm

His credentials: http://www.linkedin.com/in/johntoppin

How to give your employees a big breakfast

2010-06-11T00:12:00.010+01:00

According to a recent survey carried out by Kingston Smith W1, 75% of employers are spending up to 20% of their payroll costs on employee benefits. However, many companies feel that the benefits offered by them are not valued by their employees. A significant cost may not be adding value, why is that?

1. Communication.

77% of employers are only communicating benefits in the employment letter or via an employee handbook. No wonder staff don't value the benefits if the company is so laid back in communicating them.

2. Benefits offered don't engage staff.

66% of the employees in the companies surveyed were under 35 years old. Maybe they don't want death in service insurance for example - so don't value it. Or perhaps they have not realised (because they have not been told by their employer) that this benefit means they don't necessarily need to buy another life insurance to go with their mortgage.

3. The benefits are stale.

A third of employers have not asked for staff feedback on the benefits offered and perhaps if they did there might be more offering on site healthcare, product discounts or retail vouchers (less than 10'% offer these), duvet days or season ticket loans (less than 20% offer these).

The cost of benefits offered, particularly insurance based products such as private health are often not reviewed annually with a view to ensuring the cost is competitive. Savings here can add to the bottom line or become available for bonuses or diverted to spend on training or other benefits.

As a specialist financial advisor to marketing agencies and professional firms I have seen plenty of examples of good and bad practice as far as benefits are concerned. How does your firm rate?

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on people: http://www.nomizon.co.uk/people.htm

His credentials: http://www.linkedin.com/in/johntoppin

Who else wants to grow despite the scarcity of credit?

2010-05-26T09:00:00.010+01:00

Research by the IOD has revealed that 60% of companies have had recent requests for loans turned down by their banks. Many have turned to selling private assets and borrowing from family and friends to fund their firms instead. Or gone out of business.

When credit is scarce it is even more important to ensure that you are investing in activities that create value as opposed to those that destroy value.

As a specialist financial advisor to marketing agencies and professional firms, I've seen to my surprise that managment teams can sometimes find it difficult to distinguish between value creating and value destroying activities.

Here are 3 considerations for value creation:

Optimisation of what you already have, e.g. efficiency, market penetration etc...

Innovation e.g. new services or markets etc...

Scale e.g. increased capability of existing services etc...

To spot value destroying activities see my previous blog on historical accidents at http://finance-director.blogspot.com/2009/09/how-many-historical-accidents-do-you.html

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Who else wants better staff than their competitors?

2010-05-06T19:18:00.008+01:00

The majority of the top 25 companies in the Sunday Times "Best" list are people businesses.

Attracting, motivating and retaining better staff than your competitors should be one of your proprities so what can you do to ensure that you have more than your fair share of the best employees?

The attributes of what makes a great employer are of course not simply related to pay and perks and include:

Leadership - how employees feel about senior managment.

Wellbeing - stress, pressure and work/life balance.

Team - how employees feel about teamwork.

Personal Development - are employees challenged by their jobs, is there scope for advancement.

Reward - Pay and benefits.

"Our people are our best assets" and "Our assets go out of the front door every night" are perhaps hackneyed old phrases. As a specialist financial advisor to marketing agencies and professional firms I still see that they hold true.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on people: http://www.nomizon.co.uk/people.htm

His credentials: http://www.linkedin.com/in/johntoppin

The secret of preventing fraud in your business

2010-04-22T17:28:00.011+01:00

With all the financial scandals in the news I thought I would share a secret with you that I learned when I was Finance Director at Kroll Associates, then the world's leading firm of private investigators.

This is about how you, the owner manager of a firm such as a consultancy, architect, headhunter, solicitor and especially a marketing, design or advertising business can avoid a fraud happening to you.

A couple of years ago, Sharon Bridgewater was convicted of defrauding her employer, the marketing agency Hicklin Slade in order to fund a luxury lifestyle. Bridgewater was its Finance Director.

For obvious reasons I will not go into the methods used by Bridgewater, who was so brazen she even appeared in a well known glossy magazine showing off the swish kitchen she funded out of the fraud.

What I will tell you is that before Bridgewater joined Hicklin Slade she was already a convicted fraudster. With proper pre-employment checks she should never have been able to work in a finance department - and especially not as Finance Director!

As a specialist financial advisor to marketing agencies and professional firms I've seen the damage that a fraudster can leave in their wake and it's not a pretty sight.

Pre-employment checks are the first and one of the best lines of defence against being defrauded.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More about cash: http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

The secret of being paid to chase your clients.

2010-04-06T08:44:00.010+01:00

Yes, there is a way to get your clients to pay you for chasing debts owed to you by them and it is completely legal. Check this out with your solicitor!!!

This is what you can get:

The right to claim late payment interest at base rate plus 8%. Yes base plus 8%!

The right to claim reasonable debt recovery costs.

The right to proceed as soon as the debt is overdue.

You can go back 6 years from invoice date (so look at any old debts from ex clients!).

You can challenge contractual terms that don't provide a substantial remedy against late payment.

All this under the Late Payment of Commercial Debts (Interest) Act 1998. Check it out with your solicitor today to see if your business could benefit.

As a specialist financial advisor to marketing agencies and professional firms I've seen my clients benefit from careful use of this method.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash: http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Little known ways of helping your clients to avoid paying you on time.

2010-03-19T11:02:00.010Z

There are occasions when you can find really effective ways of helping clients to improve their cash flow...at the expense of your own. Firms such as solicitors, architects, head hunters and of course all sorts of advertising, design and marketing businesses are particularly adept at this.

Try these out:

Always agree with the client's payment terms even when this means that YOU will need to borrow the money THEY ought to be paying.

Once you have agreed to them, remember to allow the client to pay well beyond their own terms, it's only polite. A bit like opening the door for someone.

Under no circumstances ask the client to pay their due bills if you are also about to do some more work for them.

Do not invoke interest clauses or threaten to use them as your client will be more insulted and it is your role to be belittled by them NOT the other way round.

As a specialist financial advisor to marketing agencies and professional firms I understand that it is often difficult to avoid falling into these traps but there are practical steps that you can and should be taking to protect your business and improve your business relationships.

Next instalment soon....

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Get rid of cash once and for all

2010-03-08T06:32:00.010Z

There are many client organisations that treat their architect/solicitor/ad agency/PR firm/headhunter/insert other people business*/ not as the valued advisors and partners they espoused when you won their business, but as suppliers... and pretty low ranking ones at that.

You may have client organisations like this.

Actions speak louder than words. You may have the ear of the MD/FD/HRD/Marketing Director etc and you may jump when he calls at the weekend or late at night and you may deliver great work against the odds but....when it comes to paying bills in these organisations yours are at or near the bottom of the pile. You are, in essence, in with the guys your client buys their waste removal from.

As a specialist financial advisor to marketing agencies and professional firms I have seen some businesses (major PLC's) who have developed pretty slick "supplier invoice payment avoidance departments" . Your valued client may have one of these!

Here are 7 things you can do to avoid being paid:

Do not ask the client what your invoices to them should detail.

Please make any kind of error possible with the client's name or address.

Try to send the invoice to the wrong person or department.

Don't put the client's purchase order number on the invoice.

Under no circumstances follow their advice as to the invoice detail.

Ensure the invoice is sent a long time after you completed the work.

Don't be stupid enough include your payment terms on the invoice.

In the next blog entry we will inch towards payment.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

Looking for danger in Marketing Services

2010-01-25T09:08:00.020Z

The latest edition of Kingston Smith W1's excellent annual survey of Marketing Services, published in January 2010, paints a mixed picture of the sector.

Disciplines with improving profitability include Advertising, Media Buying, Public Relations and Branding/Design, whilst profitability in Digital and Direct Marketing/Sales Promotion declined.

Scratch beneath the surface and you will note that the survey is based mainly on accounts for 2008.

Most Marketing Services businesses responded to the recession in 2009 so we should expect the next survey to reflect the negative impacts of reduced client spend and costs incurred by agencies as they restructured their businesses. 2009 balance sheets will also be looking all the poorer.

2010 is expected by many, including Sir Martin Sorrell to be "flattish" - however, with agencies leaner as a result of measures taken in 2009, the current year should show profits improving in comparison.

Under my magnifying glass, as a specialist financial advisor to marketing agencies and professional firms are the following dangers points to look out for:

1. Poor balance sheets coming into 2010 combined with increased income (if you are fortunate) can result in tighter working capital. So keep on top of WIP and debtors.

2. Clients may be experiencing the same so make sure you on top of any credit you are extending to them.

3. Watch out for fellow agencies you rely on in sectors which had thin profits in 2008 - they may be under even more working capital pressure in 2010.

4. Client procurement will be looking at these numbers too so be even better prepared for them than you usually are.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials: http://www.linkedin.com/in/johntoppin

http://www.kingstonsmith.co.uk/

Bend over Darling?

2009-12-10T15:45:00.013Z

Everyone is entitled to their own views on the Government's plans. Whatever yours are regarding the medicine proposed by the various political parties, there is no doubt that the real UK economy is still in for a hard time over the coming years.

As a specialist financial advisor to marketing agencies and professional firms, I'm seeing that many are facing three similar issues even though costs have by and large been cut so that they match lower levels of turnover:

Maintaining investment in the business so that it stays ahead of the competition (or at least does not fall behind);

Maintaining liquidity, positive cash flow and good banking relationships so that when turnover increases, working capital does not run dry;

Dealing with employee rewards in the face of tax changes and lower profits and liquidity.

To balance these three issues you will need to make sure that you tread carefully as previous recessions have shown that more companies face financial difficulties at the beginning of a recovery than in the depths of a recession.

As a first step, why not pick the phone up and call John or email him and arrange to meet up.

More on cash http://www.nomizon.co.uk/cash.htm

His credentials http://www.linkedin.com/in/johntoppin