34 roundtable Funding and growth in the SME sector - discuss
The Business Magazine joined forces with Santander Corporate Banking last month to host a roundtable discussion on funding and growth in the SME sector. Below, journalist John Burbedge reproduces selected observations from the Roundtable
Are we in recovery mode, and making progress?
Santander’s Paul Robinson felt the Thames Valley had been relatively cushioned from the recession, and there were encouraging signs of improved sales and growth in a number of sectors (healthcare in particular) – although some businesses (retailers and restaurants) were still struggling with recessionary after- effects.
It was heartening to hear David Caddle of MAS report that the manufacturing sector is faring relatively well. “It’s not back to pre-recession levels by any stretch of the imagination but we are certainly seeing opportunities for growth.” High commodity prices were presenting a challenge, but favourable foreign exchange rates were providing profitable export markets for manufacturers, particularly in the BRIC countries.
Many manufacturers had learnt the lessons of previous downturns and were already leaner with more efficient operations in progress. “Those better placed to withstand the recession, were both flexible and willing to diversify.”
Terry Goodsell and Susan Elliott saw a patchy recovery picture with some sectors doing well and others not so optimistic (retail, construction), but even within challenged sectors there were bright spots. “Businesses reliant on public sector work are rapidly trying to readdress their clientbase. The wise ones started doing that some time ago,” said Goodsell.
Elliott noted the success of niche players with strong business strategies and dynamic new businesses in software and smartphone applications, where there is a global reach. “Overall it’s a struggle. Businesses have retrenched, but they now realise that they can’t cut any more and have to get profit back into the business, by growing through sales, which probably means taking on people and gaining funding to support growth.”
David Murray asked roundtable niche players about growth and funding problems.
Sally Preston, who produces Babylicious and Kiddylicious snacks and frozen children’s food products, explained her company’s seven-year struggle to deliver innovation and ‘get a freezer in a baby aisle’. “To keep things going we had to diversify (into fruit crisps) and be nimble. We’ve stayed within the same retail area but like many, are at the mercy of the retailers’ strategies, and their current buying attitude.”
Some retailers did not seem to be confident about the market and were driving the value out of many product categories. “They just need to be braver, I think.”
Davinder Virdee: “The pharmacy side of the business is regarded as quite defensive being funded by the NHS and has held up well, but the retail side has been quite weak – an insight into
www.businessmag.co.uk
Lined up to debate: our Roundtable team
the true consumer economy. Our business model doesn’t change much but we’ve seen internal costs going up (utilities) and the NHS is constantly trying to take money out of the model.” Ironically, prescription income went up during the recession, he added. “Stress!” a roundtabler suggested.
Working in the mental healthcare sector, Abdul Sattar and is equally concerned about NHS cuts and management changes. “GPs are not commissioners of services, they are doctors, and they will have to have commissioning consultants to advise them.” Joint commissioning of health and social care could potentially benefit his sector since the cost of patient community care is far less than hospital care.
He didn’t anticipate pressure from wage demands. “Staff today understand why there can be no increases at present. They tend to be happy to have job security and good working conditions.”
Jonathan Coiley’s company fulfils property maintenance contracts. “Our customers are still wisely spending money on their premises, but the pressure on us is to make sure they continue to choose us to deliver their contracts. Our risk is that customers are tempted to take the lowest tender from someone who is buying work at cost to maintain their business survival.”
Times have also changed for Acorn Engineering’s niche provision of control systems. “We have had to drive our costs down like everyone else, and although we have a very healthy order book containing some flagship contacts, we find ourselves having to tender against 10 to twenty competitors for jobs as opposed to 2 or 3 in the past. However, if you keep your head down and work hard and deliver what your customers need then there is ample opportunity for growth and I remain positive about the future.”
Mike Loftus countered ‘doom and gloom’ media tales: “We should remember that the Thames Valley/Reading is one of the top-five best-placed business locations in the UK. We have some of the largest and best companies in the world.
Participants David Caddle:
Programme manager, Manufacturing Advisory Service
Jonathan Coiley: Finance director, Acorn Engineering
Susan Elliott: CEO, Thames Valley Innovation & Growth
Terry Goodsell: Partner, James Cowper
Andrew Latham: Santander Corporate Banking
Mike Loftus: Business development consultant, RSM Tenon
Sally Preston:
Founder/managing director, The Kids Food Company
Mike Reeves: Regional director, Santander Corporate Banking
Paul Robinson:
Relationship director, Santander Corporate Banking
Abdul Sattar: Managing director, Comfort Care Services
Davinder Virdee: Owner, Pillbox Chemists
David Murray: Managing editor and publisher of The Business Magazine chaired the discussion
THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2011
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44