RTA Business Complaints Case Study: Unrealistic Expectations

As a part of the ongoing RTA Business Complaints series, this week we look at customer expectations, and how promising what you can’t deliver can poison your reputation with consumers, and when the time comes, with potential buyers looking to purchase your company.

Your Reputation Matters with Potential Buyers

We understand the nature of reputation here at RTABusiness Consultants. We’ve been helping people all over the country sell their businesses for years, and in our experience, we’ve seen that a bad reputation hangs like an albatross around your neck when you’re trying to persuade a potential buyer that your business is right for them.

Nothing will give your firm a bad reputation quicker than a slew of angry customers. Customers get angry for a number of reasons; one of them is when your product doesn’t deliver what you say it will. They feel as though they’ve been swindled, take to complaints forums and before you know it, your reputation is shot to hell. Just ask National Health Specialists (NHS)

The RTA Business Complaints Case Study

A New Zealand-based health specialist, NHS released a new product and marketed it as a miracle pill. The Lemon Juice Diet Rapid Slimming Capsule was billed as a slimming miracle. Of course, the company promoted the pill with a range of advertisements.

The advert made the mistake of promising that users would slim by two kilos every 24 hours. Naturally, this turned out not to be true, and someone complained to the country’s Advertising Standards Authority (ASA).

Remember: Customers Don’t Like Being Lied To

The ASA were swift and brutal in their judgement. They ordered the ad be removed from circulation, noting that it promised unrealistic and unsafe weight reduction, which the parties in question were unable to substantiate. Of course, its generated press and the complaint, along with the decision made labelling the NHS as a disreputable company, will linger like a bad smell, damaging their reputation going forward.

At RTA Business we hope this example reminds you that customers won’t take being lied to. If you want to build up your company with an eye to one day selling it, you need to remember that an angry customer will complain, and that complaint will reflect badly on you when it’s time to find a potential buyer.

Whatever You Do, Don’t Follow the Example of the Energy Sector!

As part of the RTA Business Complaints series this week, we’d like to take the time to warn you not to follow the example of the complaint burdened energy sector!

Sell Your Company with RTA Business

Are you looking to sell your business? Do you want to walk away with the most money possible for all of your hard work? If this is you, come to RTA Business Consultants; the business sales broker with the skill, knowledge and expertise, to ensure we find the right buyer for your company.

That experience has taught us that complaints are anathema to the business owner looking to sell on their firm for profit. A potential buyer sees these complaints? You might as well give up on selling it right now, they’ll certainly give up on buying it; they’ll think it’s not worth the hassle!

Just Look at What They’re Doing and Do the Opposite

We’ve taken the time over the past few weeks with the RTA Business complaints series to warn you how not to invoke complaints, how to handle them, how to not handle them etc. Now we want to give you an example of what not to do.

And the complaint beleaguered energy sector is the perfect example of what not to do in every single way; how not to avoid complaints, how not to deal with them etc. Just look at what they’re doing and do the opposite.

Customer Complaints for the Energy Sector Have Reached Their Highest Ever Levels

Notably, the Guardian reported this week that customer complaints for the energy sector have reached their highest ever levels; 1.7 million for the big six energy companies this quarter.

According to consumer group Which?, who started to compile customer complaint data on the sector in 2012, the figure was a rise from the 1.5 million complaints recorded for the same period last year. Npower’s figure in particular was spectacularly bad; 83 complaints for every 1,000 customers.

So What Are They Doing That’s so bad?

So what are they doing that’s so bad, why are they getting so many complaints? How are they handling them? Well obviously rising energy prices is a part of it, but the issue is far more complex.

Executive Director of Which? Richard Lloyd put it best. The Guardian reported that Lloyd said: "Yet again, millions of customers are being let down by poor service from the big six energy companies. If they want to improve the low level of consumer trust in the energy market, suppliers must up their game now.

Give Your Customers Good Service!

That’s it; poor service is facilitating these complaints, and teams are handling them just as poorly. If you want to avoid the damage customer complaints can reap on your eventual plan to sell your business, learn a lesson from the plight of the energy sector, and make sure you give your customers good service!

RTA Business Complaints Series: Why Do Customers Complain?

As part of the RTA Business Complaints series, this week we get to the root of the problem and ask, just why do customers complain.

Advice from RTA Business: Complaints are Dangerous!

In RTA Business’ experience of helping business owners up and down the country walk away with the best possible deal they can get when they decide it’s time to sell their company, we’ve found that complaints can be detrimental. Rack up enough, and be unlucky enough for a potential buyer to see them? They’ll think your firm has too many issues to handle, and that it’s not worth the effort.

That’s why you need to stop complainers in their tracks. So far we’ve featured articles on how best to do so, and how not to do so, now we want to address the larger issue of why they do so. If you know this, you can stop complainers before they even have a reason to open their mouths.

The Top Five from RTA Business

We’ve seen a lot of businesses deal with customer complaints in our time, and our experience has shown that these are the top five reasons a customer takes to the phone and expresses their dissatisfaction:

1) Faulty Product: The number one reason; if you’ve sold them a faulty product, of course they’re going to complain if only to get their money back.

2) Poor Customer Service: If a customer feels as though their trade isn’t valued, that you’ve sacked them off, they’ll complain out of sheer indignation. People don’t like to feel that their custom is unappreciated.

3) Not As Advertised: if a customer feels that your product or service is not as advertised, they will feel lied to. Nobody likes being lied to, and you can guarantee that they will complain and make sure everyone thinks you’re untrustworthy. A seriously dangerous complaint for your business model.

4) They’ve Been Left Waiting: If you’ve left a customer waiting, it doesn’t matter how effective your service is, or how valued you make them feel, they will complain, because you’ve wasted their time.  As they say, time is money.

5) Because They Can: Some customers will complain simply because they think they can get away with it, or because they’re having a bad day, or because they want their money back after they’ve looked at their bank balance and realised they haven’t got as much as they thought. Nothing you can do really except shut them down.

Once you know why a customer complains, make sure you deal with it before it can ever become a problem that causes a potential buyer to think that your business just isn’t worth the effort. 

Here are RTA Business’ Top Five Reasons a Buyer Won’t Purchase Your Company

If you’ve put your business up for sale and it’s not selling, you need to know why so you can rectify the problem and clinch that elusive buyer. That is why this week, RTA Business has listed its top five reasons a buyer is saying no to the opportunity to purchase your business!

As one of the leading business sales brokers in the UK, RTA Business consultants has been facilitating lucrative business acquisition deals for a fairly long time, and as such, we know what works and what doesn’t.

Get Proactive and Show a Buyer the Value of your Business

More to the point, we know that you have put your business up for sale because you want to make money. The longer you have to wait, the longer you have to wait to get your hands on the cash, which can be frustrating or down right obstructive.

In our experience if a buyer isn’t biting, there are several reasons why, and there’s always something you can do about it.  Get proactive so that when the buyer of your dreams comes along, sees the value of your business and makes you an offer, you can reap your reward for building up your company into one to be proud of!

In order to do that, you need to identify the problem, and in RTA Business’ experience it’s probably one of the following:

1     They Don’t Know You: Even with RTA Business on your side, you need to let people know who you are, otherwise, how will they know why our business is so valuable? Always make sure you have a killer marketing strategy.

2      They Don’t Know the Value of What You Do: We live in a world of sceptics and even profit margins sometimes won’t convince them of the value of what you do. Craft facts, statistics, data, testimonials etc. into your marketing strategy to present a solid case to potential buyers.

3      Profit Margins: In many cases, a buyer may lack interest because your profit margins are too low to catch their eye.  Diversify your service and show them other avenues they can take advantage of to increase revenue with your business.

4      They don’t understand Your Product’s Appeal: In other words, the buyer doesn’t really understand the consumer base you market to. In this case, double down on market research so can readily show the gap in the market that you cater to.

They Believe the Profitability of the Business Isn’t Transferable: A potential buyer may be of the opinion that the company only works because you are at its head. Convince them otherwise by highlighting the key role played by your employees and convince said employees to make a long term commitment to the firm.

Learn from Ryanair –Avoid a Price War

If you learn anything from the reports that Ryanair has seen its first profit drop in five years that have surfaced this week, it should be to avoid a price war. Profit drops are poison for those of you out there looking to sell your business.

The link between profitability and lucrative business sales are obvious. Any buyer interested in your business will be so because they see profit potential. If you can show them that they can use your business to make money, they’ll suddenly be a whole lot more interested in buying your business.

Naturally, this leads us to the conclusion that if you can’t show them high profit margins, then they’ll doubt that your business can make any money, and it’s more than likely they’ll end up saying no. Seeing profits drop as you’re selling, by the way, is particularly disastrous because it’s so immediate, it is bound to stick in any buyers mind.

The Misconceptions of a Price War

One of the easiest ways to drive down your profit margins is by getting involved in a price war. People usually get the wrong idea about this. The theory behind drastically cutting prices is that because you are cheaper than your competitors, people will come to you to buy the product/service you sell, because they’ll save money.

This is a terribly short sighted view of the realities of drastic price cutting policies. Yes, they can be lucrative in certain circumstances, but there are other things to consider. It may not, for example, attract enough customers to make it viable, as there may be issues of convenience or may not make enough money to prove profitable due to prices falling too far.

Ryan Air: A Case Study

Let’s look at what’s happening with Ryanair right now to see how drastic price cuts can have the opposite effect to those intended. It is a low cost airline that has been making money for years because it is popular with customers.

They recently went too far and engaged in a price war to compete with other low cost airlines. It has now seen its net profit fall to 523 million Euros (£426 million) for the year to March, down from 569 million Euros the year before.

This is why RTA Business Consultants suggest that if you’re looking to sell your business, you should think long and hard about whether engaging in a price war really will drive up your profit margins. If you’re not careful, it can actually damage them, turning off that potential buyer who otherwise would have signed on the dotted line and purchased your business!

RTA Business Asks: Why Should You Encourage Leadership in the Office?

The success of your business depends on a number of factors, however RTA Business we would suggest that increasingly, it depends on not just leadership you display, but the leadership that your employees take as well. Why is this?

The Changing Role of Leadership in Business

At RTA Business – the firm dedicated to helping you make a profit when you decide it’s time to sell your company – we recognise that potential buyers want to take on a business that has already shown that it is a success. Fostering leadership qualities at every level, is in our opinion, one of the best ways to do this.

It’s understandable why many people still believe that leadership is a top down matter. After all, this is the view that has dominated for years, and people are often reluctant to accept that we are living in an evolving business climate, where initiative often yields the highest profit margins.

The Relationship between Initiative and Expertise

And initiative really is the key point here. The modern company is trading in a diversified world. That is why it pays to practise a wide business model that takes advantage of every profit margin avenue possible, to generate revenue. Increasingly, a business achieves this by hiring a diverse staff roster that has differing areas of expertise.

Therefore, it’s quite clear that you are hiring employees with different skills sets from your own to fully take advantage of all the opportunities displayed to you in order to become a success. They have the knowledge you don’t, which means that they can spot the profit potentials you may not be able to recognise. You need to encourage leadership to ensure that your employees have the confidence to run with these observations and bump up your profit margins.

RTA Business on the Need for Leadership

This is why you need to encourage leadership in the office. The only way a that a buyer is going to purchase your business is if you show them how it can benefit their bottom line, and hiring a diverse staff roster that is secure in using their specialised skill set to make your company successful will do that. At RTA Business, we know that encouraging a culture of leadership and rely on the skills of those you hire.

Pub Sector Receives Major Help from UK Government

If you trade in the beleaguered UK pub industry, there is good news this week, as the government has announced new code of practise designed to help aid growth in this key sector. What could this mean for your long term prospects if you hope to one day sell your pub?

At RTA Business we specialise in giving you the help you need when you decide it’s time to sell your business, so that you can make the most money possible from the result of that sale. We understand the difficulty this sector has had in recent times and welcome this news.

The Changing British Pub Landscape

The pub industry was once one that sat at the heart of British commerce. Back in the 80’s and 90’s, there would have been no problem selling your pub, because they were the centre of British life, regularly drawing in custom. Therefore, they were highly lucrative and valuable to potential buyers.

However the world, and the pub industry, has changed. The gradual encroachment of bars on pubs’ core client base, as well has the ramifications of the smoking ban, has driven customers away, forcing pubs up and down the country to close and making them that much harder to sell.

A Statutory Code to Control Costs

This is why the government has made the announcement of new rules that are aimed to help struggling pub tenants cover the cost of beer payments or rent. Specifically, this statutory code includes  the right to request a rent review after a five year period,  which followed after a raft of sustained complaints about the infamous “beer tie.”

Business Secretary Vince Cable spoke was reported by the BBC speaking on the issue. Cable said: "Far too many landlords feel their income is squeezed by big pub companies. So today we are taking action to make sure they get a fairer deal." 

RTA Business on the Potential for the Pub Industry

Although this change primarily concerns those who rent, it does have a provision that says that tenants of companies with over 500 pubs, will now have the right to request "parallel free-of-tie rent assessment," to show whether they would be in a better position going independent. This could theoretically open up a pathway to pub ownership, which could generate massive revenue when you eventually sell.

At RTA Business we also recognise that these changes will have wider effects for pub owners, as it will put them in a stronger position with potential buyers when it’s time to sell.

CBI Predicts Interest Rate Rise

The Confederation of British Industry has predicted that the national interest rate will rise early next year, becoming the third major organisation to make such a claim. What could this mean for you if you are looking to sell your business in the next year?

The UK’s Benchmark Interest Rate

Interest rates – the amount of a loan that is charged as interest to the borrower – is crucial to the business industry. That is because interest rates are a huge economic factor, and as such, any change to national interest rate policy has the ability to either positively or negatively impact businesses on a national scale.

The Bank of England set their benchmark interest rate at 0.5% towards the latter end of last year. They did so in order to stabilise the economy and stimulate growth. The fact that financial experts have now predicted that the UK will return to pre-recession levels of growth by summer this year, would suggest it is a policy that has benefitted the nations finances and put you in a strong position if you are looking to sell your business right now.

Therefore, it is not surprising that the Bank of England announced that it will keep its benchmark at 0.5% for the next month, and most likely for the foreseeable future. This means that the environment that has fostered the economic recovery will continue and that can only be a good thing.

The CBI Prediction

However, analysts everywhere agree that the policy cannot, nor should it, stay in place forever. If it stayed in place too long, it could hamper long term growth which would weaken everybody’s bottom line.

Specifically, the CBI has suggested that by early 2015, the Bank of England will have raised the interest rate to 0.75%.  It has also raised its UK growth forecast from 2.7% to 3% for 2014. The National Institute of Economic and Social Research (NIESR) and the Organisation for Economic Co-operation and Development (OECD) have both taken similar steps.

The CBI also commented on business owner confidence: The BBC reported that they said: "We're sensing entrepreneurs across the whole economy - service, manufacturing, exporters - and even the domestic economy feeling more confident [and] making more investment."

At RTA Business Consultants, we see that the CBI has suggested that for the next year, the recovery should remain stable and that it is and will continue to improve business leader confidence. That means that it really might be the best time for you to sell your business.

RTA Business’ Top Four Tips to Improve Employee Relations

One of the most difficult areas of management is striking the perfect balance with your employees, and if you need help improving your strategy in this pivotal area, then you might want to take a look at RTA Business’ top four tips to improve employee relations.

A business is only as good as the people that work for it, and those people tend to be more productive, to contribute more to your business, if they are happy. An unhealthy relationship with the boss is a major reason why an employee may be unhappy at work, as they feel unable to forge a positive working relationship with their boss, and as such, they are not fulfilling their full potential.

If you are looking to eventually sell your business, you need to create a positive working atmosphere, to ensure that when it comes time to sell, your business is the best it possibly can be and is more than capable of attracting a buyer. That is why employee relations is a key area of your management style, and if it’s an area somewhat lacking, you need to improve them if you ever hope to sell your business.

The Top Four from RTA Business

There are multiple ways you can improve employee relations, however some are more effective than others, and these top four tips from RTA Business should drastically improve relations in your office.

1       Politeness: It’s a basic issue, but you’d be surprised how often employees quit their jobs because of an impolite boss. Everybody in that office deserves respect and if they don’t get it, their productivity, and thus your bottom line, will suffer due to resentment.

2      Incentive: Whilst you must be the authority figure for your employees, they need to also see you as the person who can reward them if they follow your direction and work as hard as they possibly can. Incentivise your employees to motivate them.

3      Co-Operation: This tip is pivotal. No employee wants to simply feel like a drone, following direction without any input. When a major business decision comes up, consult with your employees to make them feel involved. It will show them that you value their opinion and respect them. Respect usually fosters respect.

4      Outside of Work: Whilst you don’t need to build an intimate relationship outside of work, it helps to at least show an interest in your employee’s life away from the office. It shows that they are not just another number to you and endears them to you in return. 

Financial Regulators for Treasury Review

UK Chancellor George Osborne has announced this week that the Treasury will conduct a review of the enforcement processes adopted by financial watchdogs, to ensure they are in line with national regulations. What could this review mean for you if you are looking to sell your business right now?

Financial watchdogs such as the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are the final arbiters for disputes over financial products and services in this country. Should your business enter a dispute of this kind, they will resolve it.

George Osborne Speaks

The Chancellor of the Exchequer, the government minster ultimately responsible for financial matters in this country, and the executive in charge of the Treasury, has said that he is planning to examine whether both the PRA and FCA were striking the “appropriate balance of fairness, transparency, speed and efficiency”  in carrying out their remit.

This decision to further examine the activities of financial watchdogs comes at a difficult time for the FCA in particular, as it has come under fire as of late for the way it is carrying out its mission to police the financial market.

Specifically, the Chancellor openly suggested that the watchdog had committed an “egregious” error in the manner in which it briefed local and national media on its yearly business plan last month. It’s important to note that this incident did not result in any action being taken.

The FCA under the Spotlight

The FCA in particular has been far more effective than its predecessor, the Financial Services Authority (FSA). Not only has the FCA taken a stronger line against individuals, it managed to raise the total value of fines from £35 million in 2009 to £472 million in 2013.

However there has been a trade off, and that has been a lengthening of the period of time FCA investigations take and an increase in the number of incidents being referred to the Association’s enforcement division. Experts suggest that these are key areas the Treasury will investigate.

The Financial Times spoke to Nathan Willmott, a partner at law firm Berwin Leighton Paisner, on the issue. Willmott said: “The main concern from all sides is the time it takes from launching an investigation to making a decision on whether there is a case to be answered, and then going through the FCA’s internal decision-making process.”

At RTA Business Consultants we realise that the significant role the FCA in particular plays in the financial sector means that any finding by the treasury could have a significant impact on the business community. If you are looking to sell your business right now, it is certainly an issue worth keeping track of.

Can Shares Rise Without Profit?

For larger companies looking to sell up, share prices are everything. Share prices indicate how much an investor stands to gain from ploughing money into your company, so they’re an important indicator of your value. This leads us at RTA Business to ask, can shares rise without profit?

Shares are a crucial measure of wealth for a business that has floated on the stock market (making shares available for investors). That means that you need to ensure that your share prices are as high as possible, so that a buyer will know that your business is valuable.

The most obvious factor in share price rise is profit margins. The amount of money you make is a direct reflection of the value of your business. However when profit margins don’t rise, is it possible for share prices to rise anyway?

Share Prices Rise at Yahoo

In fact, it really is possible to increase share price without profit and all you have to do is look at the latest market activity at search engine corporation Yahoo to see how.

At the moment profits at Yahoo are actually falling. There was a 20% fall in first quarter profit. It measured $312 million (£187 million). It still beat expectations, but it wasn’t exactly fantastic. However share prices, at the time of writing, had jumped 9%. How is this possible?

The company came out with a raft of facts of figures to assure investors that Yahoo is on its way up in the world. Apart from the fact that profits still beat expectations, overall revenue was actually at its highest since 2010. Yahoo raked in $1.1 billion in the first quarter, with display advertising revenue rising by 2% to stand at $409 million.

Yahoo’s share price was also spurred on by the fact that Chinese internet monolith, Alibaba, of which it  owns a whopping 24% stake, saw revenue rise 44% in the last quarter of 2013. Of the situation, Yahoo Chief Executive, Marissa Mayer said that she “is really pleased by our first-quarter performance."

What RTA Business Has to Say

So at RTA Business we remind you that share prices aren’t as simple as how much profit you’ve got in the bank. Investors, whilst they are certainly interested in profit, also use the long term likelihood of business success to measure a company’s worth on the international market.

On a wider scale, Yahoo’s impressive share price rise should remind those looking to sell their business right now that buyers look at the long term viability of your business. It’s not enough to have a strong profit margin.

UK Interest Rates Fall in March

The UK economic recovery seems to be gaining momentum at the moment, as this month that rate of UK inflation fell. What does this mean for those of you are there who are thinking of putting your business up for sale right now?

Inflation is the rate that consumer prices for goods and services goes up against real wage rises. If there’s a rise in inflation, it means that customers have less purchasing power. A fall, therefore is advantageous to the business community, as it means that customers have more purchasing power to the pound, stimulating spending.

The Rate of Inflation

So what does this latest fall in the rate of inflation mean and what are the specifics? According to the Office of National Statistics (ONS), UK inflation, as measured on the Consumer Price Index, slipped from 1.7% in February to 1.6% in March.

This figure actually further establishes an ongoing statistical trend running through UK inflation right now; it’s fallen for the third month in a row. Furthermore, inflation is sitting well below the Bank of England’s 2% target and it has done so for some time.

This latest Consumer Price Index figure is the lowest recorded since October 2009 and it isn’t the only inflation news coming through right now, as the nation’s other significant measure of inflation, the Retail Price Index, slipped from 2.7% to 2.5%.

Specifically, experts are suggesting that the biggest reason for the fall of inflation across the board came from petrol prices. They actually (and quite unusually for petrol) stayed level between February and March. In contrast they rose 2.2p per litre the month before.

However Petrol Prices weren’t the only reason that inflation fell across the country, clothing prices also contributed and so did food prices. So what does this mean the business sales industry?

What This Means at RTA Business

Because this is the sixth consecutive time inflation rates have fallen rather than risen, the gap spanning average wage growth (they rose by 1.4% in three months to January) and price rises for consumer goods continues to shrink, it means that consumer purchasing power has strengthened.

That’s really good news if you’re looking to sell your business right now. This is because if consumers are spending more, there’s more money to go around. It means not only that you are earning more, which makes your business look more attractive to a potential buyer, but that this buyer is more likely going to want to expand their business by buying yours. RTA Business knows now is a good time to sell.

UK Growth Largest of the G7 in 2014

The International Monetary Fund (IMF) recently made British business owners week as they announced that of the G7 countries, the UK is set to record the largest rate of economic growth over the current year. What are the obvious benefits for those people looking to sell their business?

It’s no secret that we’re in the middle of an economic recovery; in fact at this point, it’s practically gospel truth. Every set of data we’re presented with right now, whether it be about manufacturing, business confidence, the property market, GDP etc. is positive and most financial experts have suggested that by summer 2014, we’ll be recording pre-recession levels of growth.

However these latest figures hammer home just how strong the UK is right now in relation to everybody else, and this means that if you’re looking to sell your business to an international buyer, then there is never a better time to do so. Let the RTA Business Consultants blog break it down for you.

The G7 countries are the world’s seven most wealthy economies. Between them they hold 63% ($241 trillion) of global net wealth. The countries are the UK, the US (the world’s largest economy), Canada, Japan, France, Germany and Italy.

The fact that the UK is forecasted to grow more than any of the world’s other wealthiest nations, especially the US, is a testament in and of itself to the power of British industry right now. The numbers speak for themselves here.

According to the IMF, the UK economy is set to grow by 2.9% this year. This figure has been revised form the initial prediction the Fund made in January. At that time they predicted that the UK economy would grow by 2.4%. It also predicted that the UK economy would grow by 2.5% in 2015.

In contrast, the IMF said that the US economy will grow by 2.8% over the current year and that the Canadian economy will grow by 2.3%. Basically, at this point there is more potential for expansion in the UK economy than anywhere else. Potential for expansion will make your business look very attractive to international buyers dealing with less favourable circumstances.

Finally, the IMF predicted that the global economy is set to grow by 3.6% this year and an impressive 3.9% next year. Again, at RTA Business, we see this as good news for people looking to sell their business. Basically, more global economic growth means more money to go around meaning more people will be looking to buy.

At RTA Business, we recognise that the writing really is on the wall here. If you are looking to sell your business there really has never been a better time to do so. 

Small Business Lending Scheme: Just What Your Business Needs?

Growing a business with the intention to eventually sell it off is a complex process and one of the most difficult parts of that process is raising the capital to get it off the ground. That may no longer be a concern if a new small business lending scheme comes to fruition.

This week officials representing the UK government have announced the creation of a new scheme that will offer to share the financial cost of losses on some small businesses loans. This scheme will take place through a concerted effort to convince banks to lend more to these borrowers.

This scheme has been designed to facilitate the growth of the small business sector – a pivotal part of UK industry – which would in turn boost economic growth, which would benefit everybody. It’s the brainchild of the British Business Bank.

The British Business Bank was launched last year by the Conservative led coalition government and since its creation it has focused efforts on improving lending rates to small and medium sized businesses, a sector of the market that has found it difficult to generally secure lines of credit in the wake of the economic crash. This is seen as the latest attempt to do so.

Marketed as a pilot “wholesale guarantee” scheme, the plan would offer a government backed assurance to lenders that would act to cover the burden of a degree of net credit losses they build up on their SME portfolio.

The government’s goal here is to lessen the amount of capital lenders have to hold against their SME loans, so they can provide loans to small and medium sized businesses in a way that will cost them less. Naturally this has been put in place so that banks are more willing to lend to those businesses, which will give said businesses funds to use to expand, which will in turn inspire economic growth.

Reinald de Monchy, managing director for wholesale solutions at the Business Bank said of the scheme that: “Our aim is to incentivise new SME lending by making it a more capital efficient activity for regulated banks, thereby enhancing its commercial attractiveness.” 

The potential benefits for business sales ere are obvious. It will be easier to secure a loan for a small business with this policy, which will make it easier to grow. This in turn will make your business look more attractive to potential buyers when the time is right to sell. At RTA Business we believe this will have positive effects for those who eventually want to sell their businesses. 

SSE Energy Prices Freeze Until 2016

Major energy firm SSE announced this week that it’s freezing energy prices until 2016. A big move by any measure of the imagination, it’s a move that could benefit businesses up and down the country that have their energy supplied by SSE.

Last year as a result of Labour leader Ed Miliband swearing to impose a 20 month energy price freeze should his party sweep next year’s election, the big six energy companies came under fire for just how high they were raising prices.

The amount of press it got last year was astounding, and future estimates showed that it somewhat hurt profit margins as customers abandoned the big suppliers in droves heading to smaller rivals for their energy needs.

It looks like SSE has now addressed this concern as they have come out saying this week that they have decided to freeze energy prices until 2016. It’s a move that been hailed by the company and customers alike.

Representatives of SSE said that the move, even though it would lower profit margins in the short term, would streamline its service to cover the shortfall, another move that is likely to benefit customers in the long term.

Streamlining plans are already under way and the energy company announced that among those plans will by the axing of 500 jobs across the board and the development of at least three offshore wind farm projects to promote greener energy. The company predicts that these plans will save them at least £100 million, which they can then pass on to customers.

Despite criticism from industry rivals, SSE chief executive Alistair Phillips-Davies hit back, saying that "delivering the lowest possible energy prices" to customers was "central to everything we do". He further claimed that "we're looking to do whatever we can to bring down prices for consumers."

He also called the government to remove energy taxes out of bills and collect them through general taxation instead. This is most likely a reference to ECO Funding, a green energy initiative that the government funds through the taxation of the major energy companies.

This is bound to have an effect on any business that gets their energy from SSE, lowering bills significantly considering the amount of energy used on a daily basis. It’s also likely that it will further boost the recovery UK economy, which will have benefits for businesses across the board.

This money can then be fed into ensuring the company is primed and ready to sell when the time is right. At RTA Business Consultants, we believe that this could help you sell your business.

A Stabilisation: The UK Unemployment Rate Holds Steady

The latest employment figures from the Office of National Statistics (ONS) have revealed that the UK unemployment rate has held steady at 7.2%. What do these figures indicate about the business sales industry and how might they effect it going forward?

According to the national statistics agency, the national unemployment rate has slipped even further, falling to 7.2% from 7.4% a few months ago. This means that the rate has generally held steady with some decreases since the ONS last discussed unemployment figures.

Specifically, the number of those in this country who are now in full time employment rose to 30.19 million; this is a record total for national employment figures. The unemployment rate fell by roughly 63,000 and now stands at 2.33 million people in the UK.

This isn’t the only good news for the UK economy coming from the ONS this week, as the agency revealed that there has been a rise in average earnings. Pay in the three months up to January 2014 was up, on average by 1.4% from the same time the previous year.

When honing in on one of the country’s major employment issues, young people, there was also good news this week from the ONS. The agency revealed that the number of unemployed people between the ages of 16 and 24 measured 912,000 in the quarter to January; this is a fall of 29,000 and brings the total number to the lowest recorded since January 2011.

The BBC reported Employment Minister Esther McVey talking on what these figures mean. McVey pointed out that "the growing economy is helping record numbers of people to find a job".

McVey went on to elaborate, saying that: "The rise in employment is being fuelled by businesses and entrepreneurs across the country who are feeling increasingly confident with the improving economy." Furthermore, these figures will inspire further confidence in the economy from business leaders, which will lower unemployment even further; it’s cyclical.

As far as the business sales industry goes, RTABusiness sees several relevant points from these figures. First, they act as an indicator of how strong the business sector is right now; they are further proof that it is a good time to sell your business as buyers are looking to expand.

They also illustrate the fact that unemployment is proving less of a drain on the national economy; which will in turn benefit businesses and give them another reason to expand and gives those looking to sell more resources to utilise to make their business more attractive to potential buyers. It’s a good time for the business acquisition industry.