The Analysis News & Opinions
Opinion
Two year low for small- business confidence
The proportion of small firms predicting growth for the next three-months has fallen to 34% – its lowest level for eight successive quarters and, for the first time, the proportion of firms predicting significant expansion has fallen below 5%. Our research found, whilst the percentage
of small businesses predicting growth held firm at 36% over the previous three quarters – through a period of extreme political and economic uncertainty – last month saw the first fall in the number of small businesses predicting any form of growth. This time last year, the spring months saw
an annual high in business confidence, as businesses started the new tax year with bullish plans for the year ahead. This spring, confidence is sliding. Sole traders were least confident in their
business outlook – only 28% predicted net growth for the period to 30 June, compared to 46% for those larger businesses with 10 to 50 employees. Similarly, sole traders were almost twice as likely to predict contraction than these larger firms. We are all living through a period of
unprecedented uncertainty and, within that context, it is not surprising that small- business confidence has taken a knock. It is too early to tell whether this is a short-term blip or the start of a trend. The crucial subtext is how small firms are
reacting to how they are feeling. What is encouraging from our research is that whilst around four in five small businesses can identify current challenges, the vast majority are adapting by making new plans to achieve future growth. Investing in new equipment, expanding
into overseas markets and tackling late payment are key issues that small firm are prioritising to move their businesses forward.
Gavin Wraith-Carter Managing director, Hitachi Capital Business Finance
Communications remains the key
Customer contact remains the crucial issue for creditors and collectors attempting to solve problem debt cases, according to a group of senior professionals in the vehicle- finance sector. Speaking at a round-table debate run by
CCRMagazine, in association with Marston (Holidngs), Simon Bayley, director of Moneybarn,
said: “From a lender’s
standpoint, the majority of these potentially complicated cases will be ‘head-in-sand’ customers. “You have just not been able to get in
touch with them. The ones that you get to speak to, you either agree to take it back between you, because the affordability is just not there, or else you do whatever you can to keep them in the car. “The problem is the ones that you cannot
talk to, and that is where we need people on the doorstep to have the ability and mandate from the lender to say ‘I know that I have come to take this car, but I now have contact and I believe that this customer has the ability to pay’. “And, thereby, the agent can try to get a
conversation going. “It might mean that they are out there
two weeks later because they have broken their first promise, but if we have got that connection, then you are better off going back a stage and starting that collections conversation because they are still in the car and you still have a chance of getting something, even if it is 25% or 30% of the payment.”
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David Lynch, client services director –
civil and business at Marston (Holdings), agreed: “As a provider, we are continually investing in the process as we understand that lenders are not always able to do so, due to their businesses being focused on front- end sales. “Collections teams perform vital work,
but often feel a little bit like a ‘dirty little secret’ of their organisation that people do not really want to exist, but ultimately it is a necessity and it is incredibly important to ensure that there is enough money to fund the dealers up front.” Mr Bayley added: “It is strange to consider
that the relationship, from an introducer’s perspective, will be 24 or 48 hours, sometimes a week at the longest, but the relationship on the back-end can be five years! “I was at a conference recently and I
was saying: ‘if you do not want to have a conversation with us, then pay, because if you pay, you are more likely not hear from the lender’. “In all walks of life, the customers you
want to keep in the car are your good-paying customers and in financial services we will more likely not speak to you! “So you have to work your processes
out and, with collections, it is often seen as an operational job, when in fact it is a negotiation job. “And if you are talking about
‘negotiations’ and ‘sales’ then it can be a great deal easier to give the money out than to get it back.”
June 2019
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