Difficult times for Horse Racing

It really is a difficult time for the Racing industry at present as last Fridays edition of the Racing Post explains.

Everyone is struggling from Racehorse Trainers/Owners/Bookmakers/Racecourse Managers even the Stud farms. The economic climate is really taking its toll with the Levy board reducing the amount it pays out by 25% this year with perhaps further cuts to come.

Racing for Change is an interesting body but is it really addressing the key issues for the industry? I fear not. Certainly there is a brand issue but the heart of the problem I believe lies in the Financial Operations of Racehorse Trainers themselves.

A less vibrant economy means fewer owners with less money to spend on quality horses. It means in effect that the Racehorse Trainer ends up operating a hotel without fully paying customers. Commercially minded landlords and HMRC pile on the pressure until perhaps the trainer comes under intolerable strain. It is exactly in these scenarios that a trainer may be exposed to the more undesirable elements in our wonderful sport.

My view is that if you help Racehorse Trainers create a more stable financial platform upon which to perform then you lead to an increase in the credibility of racing as a whole. This is the brand issue that Racing needs to address. Those trainers that act in a Financially responsible manner in relation to their business deserve huge credit. Owners should bear this in mind when selecting their trainer.

Now if only there was a standard that Owners and Punters could rely upon .... and what if those trainers were incentivised to take up that standard.....surely that would lead to an uptick in betting turnover.....and everyone would benefit....now there is a thought...

Resellers feeling the pinch

An IT resellers life is a simple one in a way....

SELL SELL SELL .... I hear you say

I'm afraid its true - box shifting leads to a life of continual selling without the building of a residual income stream into the business (perhaps via a robustly set up services operation). If the selling stops so does the business.

BUT I'M HAPPY SELLING....I hear you say....

That's great but what happens when you lose your enthusiasm in your late 40's for the game. What have you built that you can sell. Have you got a team around you that is "buyable"? What about the brand? Have you got an income stream?

The worst thing that can happen is you don't plan and you don't engage with a decent FD at an early stage. Let them take the pain of the day to day and help steer you to a better future.

Marketing Agencies taking a hammering

This is the toughest time I have ever seen to be operating in the Marketing sector. The issues are twofold:

1. Marketing budgets continue to be slashed across all business sectors leading to fewer jobs at lower margins.
2. In the UK we have sent an unbelievable amount of people to media college who now can't find jobs - so what do they do - they seed pod and start up in their own bedrooms. The effect a dramatic undercutting of jobs for traditional agencies who still have to bear the overheads

It just doesn't work like it used to. Agencies must adapt and get their mindset right now. Robust Financial disciplines must be put in place. Understanding cash flow and product profitability are a fundamental. Practicing what you preach is another - what are Marketing agencies typically very bad at - Marketing themselves! It's not as fun for the Artisan you see.

Well it's time for this sector to wake up and smell the coffee. I'm afraid its adapt or die....

Aligning employees interests with a share scheme

“The use of employee share schemes is soaring, especially among smaller private companies”, says Alex Warren.

Employee share schemes are already commonplace in UK quoted companies. These often take the form of share options or awards of shares which are released to employees over time on the achievement of performance targets. Now, however, smaller companies are using specially designed schemes, such as the government sponsored Enterprise Management Incentive, to help them get through tough times. These schemes not only provide effective incentives for staff members but also offer the potential to save large amounts of tax and conserve cash.

Why every business should have a Part Time FD!!

It seems to me that business owners often think that their high street accountant is a business guru of some description who should be trusted with their most sensitive financial information and knows how to run a fantastic business.

The reality is that high street accountants are often average business men that "fell" into the profession after realising that there was little hope for them out in the real commercial world. These guys have never run "real businesses" and that is the issue. Don't get me wrong there are some good ones out there - but how often do they ever given great quality commercial advice? The point is that other than a bit of taxation structuring (and most of them are not very good at that!) it is a compliance service and a compliance service only that they should be used for.

To get quality Finance input - i.e. to make you more profit and get more cash in your bank - every business needs a quality go to person as their FD. A quality FD will more than pay for himself by helping steer the MD along the route of quality profitable business (i.e. making more Gross Profit!) and keeping Overheads down (the difference between Gross Profit and Net Profit!)

So if you are sitting there and you don't know the difference between Gross Profit and Net Profit and worse still your accountant hasn't explained this to you then be scared....be very scared... and then pick up the phone and call Yellow Brick Road (08447 706320).

Quality FD skill is available at a fraction of the cost of full time resource so why not bring one into your business for one day a month to see what they can do for you! www.yellowbrickroadconsulting.co.uk

A bit of market research....feel free to join in! (July 09)

Dear blog reader

Your very kind help is requested to complete the piece of research attached on the following link. I would not normally send a mass e-mail for this type of thing but having read the content I believe it could lead to an additional work stream for blog readers (always welcome I hear you say!). My client has specifically asked that I obtain the views of blog readers given their unique and distinct position in the market place.

There is also a chance of winning the charity draw of GBP 50 which can be donated to the winners designated charity!

http://www.keysurvey.co.uk/survey/265743/15fe/

Should take a maximum of 3 minutes!

Many Thanks

Alex

Do you have a great business idea? (June 09)

It seems to me that the current economic climate is potentially a great time for new businesses to spring up and evolve.

Firstly less people are working for an employer (i.e. their minds are no longer restrained by the system). This allows people to let their minds think about things that they do not usually think about! Out of this can come great business ideas. The issue is though is that often these people have no structured method of getting their ideas of the ground - this may be due to lack of knowledge or route to market or funding.

I also think that at the moment there is a whole set of people wiling to put the effort in to make these business ideas evolve - yet they do not have the idea in the first place.

Now if I could only get these people together.......