BizSale Small Business Blog. Small businesses for sale.

The saga continues in what must be one of the most gripping cases of a business for sale for some time. Now, after US food giant Kraft tempted Cadbury shareholders with more cash than that promised by its initial £10.2 billion bid, the British confectioner has written off the revised offer as "derisory".

In an attempt to sweeten its offer for Cadbury, Kraft – maker of Toblerone and Terry's Chocolate Orange – unveiled plans to sell its frozen pizza businesses in the US and Canada to KitKat maker Nestle for £2.3 billion. The latter has denied reports it's considering its own bid for the manufacturer of the Wispa and Dairy Milk bars, among others.

"Kraft has once again missed the point," Cadbury bosses said of the move. "Despite this tinkering, the Kraft offer remains unchanged and derisory with less than half the consideration in cash."

The US firm is expected to provide further details of its alternative takeover proposal by 19 January – the last day under takeover rules that it is allowed to amend its bid. The deadline for Cadbury shareholders to accept the offer has also been extended to 2 February.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

Statistics might show that 80 per cent of businesses affected by a major incident close down within 18 months, but nearly half of small firms still don't have plans in place to deal with the effects of flood or storm damage.

That's according to the British Insurance Brokers' Association (Biba), which is using its research to stir the government into action to help small companies survive incidents like a fire, a flood, an act of terrorism or a pandemic such as swine flu – particularly during the economic downturn. It found that the number of small-business owners who claim it would take more than six months for their enterprise to recover from a disaster has nearly trebled.

Steve Foulsham, technical services manager at the organisation, said there have been "slight improvements" since Biba's previous research in 2006, but concerns remain that businesses are still not adequately protected.

"It is vital to raise and maintain awareness of the need for businesses to prepare for the potential impacts of a natural disaster or terrorist attack," he continued. "The Buncefield Oil Depot fire, 7/7 bombings and continued incidents of flooding illustrate the need for all to plan for the unexpected."

Such plans might include considering how a business would work if its computer or phone system went down, how machines, equipment and stock might be replaced and how a firm would cope in the first hour following a disaster.

Biba also advises weighing up the effects on a company if a major supplier or customer were to suffer a major incident, and implementing plans to deal with half of all staff being off sick.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

Small firms in Wales are welcoming the news that their government will be giving them more help with their business rates from April. The Welsh Assembly Government says that, from then, companies with a rateable value up to £7,800 will qualify for a 25 per cent reduction in their rates through rate relief, replacing the previous threshold of £6,500.

The threshold for 50 per cent general relief will also increase, from a rateable value of £2,000 to £2,400.

Ministers in the country said they're "committed to supporting businesses through the current economic climate" and emphasised the importance of helping firms that face an increase in their rate bills following the UK-wide non-domestic property revaluation exercise.

"The measures I have announced today mean that from next April over half of all business premises in Wales could qualify for this relief," observed local government minister Carl Sargeant.

The Federation of Small Businesses reckons the announcement marks a step in the right direction – but it's not "the complete solution". They want the whole issue of business rates to be revisited because they place a "phenomenal burden" on small companies, suggesting they should be calculated on the basis of performance instead of "the square footage of premises".

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

Businesses in London are more optimistic now about their prospects for 2010 than they've been in the last 18 months. So say pollsters from the Confederation of British Industry (CBI) and KPMG, who have unveiled the results of their latest survey of firms in the capital.

Most companies are still cautious about future investment, though, and they have their doubts about London's longer-term status as a world city. An overly burdensome tax and regulatory regime was singled out as a primary threat to the capital's attractiveness to entrepreneurs and investors.

Nonetheless, 86 per cent of those polled say they reckon the city's a good place to do business, compared to 80 per cent who claimed the same in April.

Over half have been forced to lay off staff during the recession, however, and a little more than a quarter opted to put a freeze on hiring altogether. On the back of the survey's results, the CBI urged London's mayor to bolster business support for small firms.

"The fact London's businesses feel their most positive for 18 months suggests the darkest days of the recession should be behind us," added an optimistic Nigel Bourne, director of the organisation's London arm.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

Small business owners have awaited the chancellor's pre-Budget report with bated breath and now Mr Darling has spoken. The main proposals you'll want to take away from his last such report before a general election include:

• A six-month extension of the £1.3 billion Enterprise Finance Guarantee scheme for small firms – that takes it to September 2010. First unveiled in March, the scheme means guaranteed 75% loans to enterprises with a turnover of £25 million or less.

• An indefinite extension of the "time to pay scheme", letting small business owners spread tax payments over a longer period. Allowing credit-starved firms that vital extra slice of liquidity, the scheme has seen over 150,000 companies defer £4 billion in tax payments since it was introduced a year ago.

• An increase in tax relief on empty properties: in a move that will help 850,000 small firms, companies which own empty buildings with a rateable value below £18,000 will be exempt from business tax.

• A deferral of the 1p increase in corporation tax for smaller companies until April 2011, leaving the 2010 tax rate unchanged for 850,000 firms.

• The creation of a £500 million Growth Capital Fund to invest specifically in small business, funded by contributions from banks and other financial institutions. More details on this one can be expected from the chancellor in the coming weeks and months.

Responding to the report, the Federation of Small Businesses welcomed most of the proposals but expressed disappointment that Alistair Darling did not focus more on incentives and assistance for small firms keen to take on more staff. A 0.5 per cent increase in employers' National Insurance Contributions will not encourage job creation within the small firm sector either, its representatives have concluded.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

He left struggling small-business owners picking their jaws up off the floor when he called them "moaners" earlier this week, but so-called Enterprise Tsar Lord Alan Sugar still has the backing of the prime minister.

The national council of the 215,000-strong Federation of Small Businesses called for Sugar to be replaced by "someone with more understanding and empathy for the small business sector" after the comments, made at a finance-themed conference in Manchester.

According to The Apprentice star, famed for his "You're fired" catchphrase, ironically enough, 85 per cent of small firms applying for bank loans at the moment do not deserve to be given any cash – and most would be better off receiving bankruptcy advice.

Referring to the "irresponsible manner" in which banks lent to firms before the recession, he remarked to his audience: "Let me tell you … you have lived in the unrealistic Disneyworld in the way banks dished out money."

The former Amstrad boss continued: "I can honestly say a lot of problems you hear from people who are moaning are from companies I wouldn't lend a penny to … they are bust, the moaners are bust."

Gordon Brown has dismissed any criticism of Sugar and maintains he has full confidence in his new "enterprise champion".

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

Small Business Week 2009 is upon us, if you hadn't noticed, and BT Business have released the results of this year's Business Pulse report, which they say is the UK’s biggest survey of small and medium-sized businesses.

Out of over 7,000 respondents, three-quarters reckon the economy is set to pick up next year, with an optimistic 35 per cent pencilling in an upturn for January. On the subject of how well equipped small firms have been during the recession, just under half admit advice has been "essential" to advancing their enterprises.

Peers, other business owners and managers, government advisory services and chambers of commerce are cited as the most common sources of such assistance, while 40 per cent of those questioned say better websites and ecommerce have benefitted them.

In terms of finance, 79 per cent of firms reveal they have not secured any external funding, while just 55 per cent of those who have obtained it from banks.

Pub and hotel owners, transport companies and retail and construction operators are generally less hopeful about starting off on the right foot once the upturn begins than their counterparts in the technology, IT, telecoms and media sectors.

Bill Murphy, the managing director of BT Business, points out that many small firms are using business social networking to "get new customers through the door".

"There are clear signs that businesses have innovated and adapted for the better to emerge stronger for the future," he says. "Small businesses are in no doubt that the entrepreneurial spirit of the UK will get us through."

Small Business Week 2009 is supported by BT Business, in partnership with the British Chambers of Commerce, Business Link, the ACCA, NatWest, Growing Business and everywoman.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

Around half of the UK's small businesses are poised to expand over the next year and Barclays is laying on a raft of free seminars to help them, backed by ACCA and support service Business Link.

With more than 600 events lined up under the Let's Talk banner, the financial services giant is targeting anyone thinking about starting a business, as well as existing owners of small firms.

"Small firms depend on bank lending to fulfil their potential and any move like this by lenders to help businesses deal with new challenges is encouraging," said business secretary Lord Mandelson.

Citing a recent survey of over 3,000 small firms by Barclays Have Your Say, the bank's Steve Cooper confirmed that 49 per cent intend to expand in the coming 12 months.

"Expansion can be a positive move for a company, and there are always opportunities for growth, but the reality is that it's also difficult," he added.

Cooper pointed out that aspiring entrepreneurs and established business owners will have the chance to hear experts speak about successful growth during the seminars – as well as getting to pose any questions "they need to ask".

Nine upcoming Let's Talk Preparing for Growth seminars will focus on business development, while 17 Let's Talk Bright Marketing and More Profit sessions will outline strategies and processes focused on customers and profitability.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

If you have been suffering from cash flow problems during this credit crunch/recession then you may have tried to gain a loan from your bank under the Enterprise Finance Guarantee (EFG) scheme, which started in January.

Don’t worry if the bank manager rejected your request – he needs to adjust to the idea of providing loans to keep businesses ticking over, under the EFG scheme.

Where bank managers would normally be asked to provide a loan for a small business to expand, during an economic downturn a business’ first priority is to survive!

Under the scheme, businesses with revenues of less than £25m can take out a loan of up to £1m for a maximum of ten years, of which the Government is guaranteeing 75% of the value.

A mere 8% of 4000 small businesses have been able, so far, to utilise the scheme.

A source from the Department for Business, Enterprise and regulatory Reform has reportedly said they are monitoring usage of the scheme at banks to make sure it is running smoothly.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

In the uncertainty of today’s global economic climate, small and medium-sized companies may be concerned about the implications for their business. With some careful planning, a greater focus on cash flow, and more efficient communication with the bank, any business can avoid the possible negative effects of the credit crunch.

The following points from ACCA, and Robert Moore at Bizsale.co.uk, offers advise for small and medium business owners to conduct financial affairs with a more sensible approach.

1. Strong financial planning is very important – don’t allow difficult business decisions to put you off making them.
2. Explore your credit options with other UK banks.
3. Get into the habit of being in communication with your bank, and perhaps with your accountant if necessary.
4. Go over your bank charges. Could you switch accounts or find a better deal with a different bank? Could your current bank give you any special deals as a loyal customer?
5. Keep an eye on rolling-over banking facilities, and look out for hidden charges and incorporate those into financial planning if necessary.

6. Consider your direct debit arrangements – for the business and for your personal finances.
7. Do what you can to clear credit card debt. But if you use credit cards, try to pay off balances before you are charged.
8. If you are due to make payments, inform your creditors of the reason why you can’t do so yet and when they can expect a payment.
9. Pay particular attention to cash flow forecasts and to monitoring cash flow. Make sure that management accounts are up to date, and that all key financial reconciliations are dealt with.
10. Tighten your reins on credit control and cash collection procedures.

11. Consider the timing of future orders and your forward order book.
12. Consider carefully current and future customer’s ability to pay. Don’t depend on credit ratings. Maybe try and get references from people who have dealt with them before.
13. It is important to pay special attention to upcoming investments and major capital expenditure. Can they be rescheduled?
14. For those businesses which import/export, think about whether foreign exchange hedging could be relevant to your company.
15. For April year-end – be clear about Stock and Work in Progress valuations – get early audit agreement to valuation principles. Do the same for all ‘fair value’ items on your balance sheet.

16. Consider your staff requirements. Could you look at offering your current staff more paid overtime, instead of taking on new staff.
17. You could consider temporary or fixed term assignments but first weigh up the pros and cons against full time recruitment.
18. Ensure that awarding pay rises and setting up staff incentive schemes relate to profitability and cash generation as well as growth.
19. Evaluate your personal financial drawings from the business such as cars, home improvements or holidays. Are they appropriate in terms of current and future profitability and cash generation?
20. Don’t embark on new business ventures without fully understanding the risks. As such, make sure you can manage or absorb the loss if things don’t turn out quite as planned. However, it is often during difficult times that new ventures can reap large rewards, as there is less competition and hasher economic conditions can help discipline the business to achieve profitability.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!