Talking SME Podcast: Cash is King

We’re delighted to welcome Shaun Brownsmith to our new episode of Talking SME Podcast – Cash is King. This is a series of podcasts where we talk about a wide range of topics with business experts, and offer broad insights to help SMEs become more successful.

A bit about Shaun

Shaun is Managing Partner at Haines Watts, a leading national firm of Chartered Accountants. Today he’s discussing planning in difficult times and how to always remember that Cash is King.

Shaun is the Managing Partner across the Aylesbury and Berkhamsted offices of Haines Watts.  He has over 20 years of experience looking after the needs of owner-managers and company directors, together with UK subsidiaries of multinational groups. He also works with many clients in the not for profit sector to assist them with their compliance needs. Shaun utilises his own experiences as a business owner to help inspire and encourage his clients to achieve their goals.

‘Cash is King’ is just one in our series of podcasts where we talk about a wide range of topics. We talk with business experts, and also offer broad insights to help SMEs become more successful.

Click here to find out how Ten2Two can help your business survive and thrive.

Don’t forget to check out our other Talking SME Podcasts here.

Transcript

[00:00:01.800] – Jane
Hello and welcome to talking SME, a quickfire round with business leaders.  I’m Jane O’Gorman and I’m very pleased today to welcome Shaun Brownsmith, managing partner at Haines Watts. Thanks so much for joining me today. How are you?

[00:00:19.680] – Shaun
I’m very good, thank you. Thanks for inviting me.

[00:00:22.680] – Jane
Thank you for joining me, Shaun. It is clear that the last year has been a challenging one for many, and when things are tough, it can sometimes be hard to look on the bright side or or look for opportunities. And it’s always reassuring to know that there is a safe pair of hands out there to advise and I’m sure your hands are full at the moment and probably were overflowing in Jan.

[00:00:54.240] – Jane
But what would you say Shaun was the biggest challenge for your clients over the last year?

[00:01:01.620] – Shaun
Um, well, it’s been a busy year all around. Yes, Jan was busy, but I think with everything that we faced in the last 12 months, whether it’s Brexit or obviously Covid related, has thrown up lots of different challenges, probably similar to you and I as individuals in terms of looking after our own businesses, whether that’s the search for relevant and up to date information, whether that’s our own individual anxieties and or those of our teams or just the changes to the way that we are being forced to work.

[00:01:46.530] – Shaun
But I suppose ultimately the biggest challenge when it comes down to it is managing cash and cash flow. And certainly that’s probably been where we’ve been more influential with our clients over this period.

[00:02:03.930] – Jane
Yes, absolutely. And as you said, there is so many different factors that have been impacting on us all over this past year. Going back to cash flow, you know, it’s an area where I can imagine it’s a primary concern and challenge for so many and undoubtedly with your expertise, you’ve been able to offer some guidance to help your clients overcome some of these challenges in terms of cash flow. What perhaps are some tips that you might have shared over the past few months?

[00:02:45.240] – Shaun
Well, one of the first things we did was look at our online, um, focused and digital platform clients and introduce them to to a couple of products that are out there which would help with some sort of free three month cash flow forecasting tools Fluidly and Futrli . So we we added those to their platforms, which could be expanded beyond the three months. But certainly we could get them three month forecasts for free in that period, which at least gave us the opportunity to continue to look at their business.

[00:03:24.870] – Shaun
And is something we continue to do now to monitor those clients and those businesses we think may be most at risk as they face the different challenges over that period. I mean, we’ve  continued to do and calculate further claims for well, up to a peak of about 120 -125 clients, payrolls per month.

[00:03:50.860] – Jane
That’s a pretty significant increase in terms of activity as well.

[00:03:54.780] – Shaun
Well, that’s a third of our payrolls that we have furlough claims for or we were at the peak of the peak of all this and trying to keep people informed of all of the changes, whether that’s the gradual diminishing or all of a sudden the re-introduction of these things has been fun and games.

[00:04:16.710] – Shaun
Obviously, we’ve also got involved in in the longer term forecasting side to help clients with CIBILS particularly. So we’ve helped clients raise well over a million pounds in CIBILS from and we’re lucky we haven’t had too many to have to look at and where possible we’ve tried to manage or help the clients manage their cash flows with the sort of more standard funding that’s available through the grants from the council, the rates applications for deferment, the self-employed funding and obviously furlough.

[00:05:01.560] – Shaun
We look at the loan funding, whether Bounceback or CIBILS as more of a last resort  or hopefully a war chest to look for opportunities going forward so that when when they do find the right opportunity to grow coming out of this, then funds are available at a lower rate to help with that. So our advice throughout has been trying to push back applications for loans and funding just to mean that we’re not stuck paying interest on something that we may not need and that we actually need the funds when when we apply for them rather than just taking them out of hope.

[00:05:54.700] – Jane
Do you think there was perhaps an element of panic at first in the sense of, oh, I should do this? I mean, luckily there are experts like yourself around to perhaps manage expectations and and try and, you know, calm and plan, but do you think there was a little bit of panic around that at the time and perhaps a bit of acceleration where it might not necessarily have been needed?

[00:06:16.350] – Shaun
Yeah, I think there probably was. And there was also that reluctance to make a decision in some organizations, certainly some bigger organizations. I think that’s one advantage that the smaller markets have, we can make decisions more quickly. But given that no one knew how long this was going to last, etc., to begin with, a quick decision to take some loan funding might mean not changing anything.

[00:06:47.550] – Shaun
For those businesses that actually took the time to review the situation, I’m sure that many of those would have benefited from making or using this as an opportunity to make some decisions, whether that’s to keep the status quo as it was, or whether to look for changes to create opportunities for them.

[00:07:11.880] – Jane
It’s interesting you say that because it’s almost like taking a decision to defer a decision to do this. But it’s interesting that that could have been a way of actually just reacting. But nevertheless, it was definitely a benefit and appreciated, I’m sure, by many, you know, and has certainly helped many businesses over the last few months that we’ve been dealing with the challenges of Covid. And as you see, I’m not going to mention the B word, with everything else that’s going on.

[00:07:46.350] – Shaun
But indeed, it’s one of the few times you have the the opportunity to praise the revenue and the government systems for moving quickly, we all know how difficult large organizations can find it to change and shift. But in this instance, they’ve done an awful lot in a very short space of time. And whilst it may not have been perfect, it’s certainly, I think was smoother and better than most people could have expected.

[00:08:21.460] – Shaun
Yeah, agreed. And I just want to touch on because interestingly, when you were talking about guidance and support and mentioning those other tools, so that I think that’s such a great add-on, but having the ability to advise and provide other tools that can help businesses plan and manage, are these tools ones that you were already aware of or that you’ve had to explore because of the current climate?

[00:08:53.500] – Shaun
Our practice is very digitally aware, and something that we’d been pushing for many years with clients was the use of cloud accounting and appropriate add-on systems. I mean, clearly it’s not practical and possible for everyone but most organizations these days could have relatively sophisticated systems at a pretty low price, whether that’s from data entry through to an automatic processing of bank statements. So things like fluidly and Futrli, we were already using ourselves and with some of our clients.  It’s just the tools became available to offer those on more readily to the wider client base  than previously and certainly with at least no initial subscription for anybody. So that helps.

[00:09:51.040] – Jane
Yeah, definitely. And I’m guessing from your perspective as well, given that you are so digital, did you feel better equipped to service your clients, you know, when obviously we were placed in a situation where so many of us are working remotely for a business for you did that mean limited damage to how you were able to serve as clients because you’ve been so pro digital?

[00:10:15.340] – Shaun
Uh, yeah. I think clearly, whilst every client wasn’t digitally focused for us and the team here, whether it was our phone system that we could just lift up and work from home or whether that was our hosted desktop platforms or, um, or the use of Teams, I mean, we’d been using teams for well over a year before any of this happens. For us, being able to pick those things up meant hopefully there was less interruption for clients in terms of normal service.   But also in terms of guiding them through some of the pitfalls and things that we might have previously overcome, um, just internally rather than externally, at least being able to point in the right direction.

[00:11:14.610] – Jane
And it’s interesting because thinking about that, you know, obviously what we do know is, you know, certainly since last March, not being able to physically conduct business and meet people, it has been restrictive. And we know that the digital platform has been high in demand. You know, it’s multiple Zooms now. Multiple Teams, were pretty zoomed out, but it is showing a new way of working and a new way of meeting. And I can’t see the future of the workplace going back to all physical meetings and all face to face.

[00:11:52.580] – Jane
So do you see digital as a necessary capital investment for businesses now to be able to operate and survive and grow?

[00:12:02.850] – Shaun
I think you always should have been for them. I think yes, more so now than ever. Although we do have to remember it’s really difficult to build a team remotely if no one ever physically sees each other or gets together, how do you build that camaraderie? So it still needs to have  its place within the wider toolset of being human.  I suppose.  Some human interaction.

[00:12:33.990] – Jane
Of course, always very important. But I think we are seeing possibly an accelerated advance in digital now, perhaps because I’m certainly in discussions I’ve had, you know, businesses who perhaps hadn’t necessarily thought about presenting other digital offerings now doing that. And I think that may well be you may well be seeing that hitting the balance sheets of P&L’s of your clients  for some time to come.

[00:13:04.920] – Shaun
Yeah, I think that’s right. That will continue. And no doubt, as I say, had a place to begin with, it has accelerated and will continue to do so. But it’s always going to be about finding that balance, isn’t it?

[00:13:19.620] – Jane
Yeah, absolutely. And we are all about balance too.

[00:13:25.230] – Jane
Do you do you see any advantages that and SME might have shown over say larger corporations. just thinking about all of these, you know, challenges that we’ve had to face over the previous months and planning ahead and thinking about all of the things that you and I have discussed so far, thinking about tools, expenses, planning staff, is there any advantages an SME could have over a larger corporate in challenging times?

[00:13:57.370] – Shaun
Well, I think the key is being able to make quick decisions and being flexible. I think they also benefit from the ability to tap into some of these tools or what is a relatively low cost. Big, big organizations can’t just. Yeah. Add something on for 20 or 30 pounds a month.  Small organizations can create a system that’s relatively bespoke to them that’s fit for purpose for a low cost that allows them to keep on top of cash.

[00:14:36.240] – Shaun
And,  they’re forecasting a bit better when it’s really difficult to plan and they only have one plan for the next 12 months because we don’t know what may or may not happen.

[00:14:52.450] – Jane
Sure, so do you think that means that they’re in a position possibly to react quicker?

[00:14:57.940] Certainly if there are opportunities then. Yeah, I mean, they should be in a position to make swift decisions. And hopefully we’ll see a lot more smaller organizations capitalize from the opportunities that no doubt will be available both now and coming out of this.

[00:15:16.640] – Jane
So it’s really interesting. So do you see hopefully then on that basis this because I’m going back to what I said right at the very beginning, that it can sometimes be hard to look on the bright side or look for opportunities and thinking about that, would you see this as an opportunity for SMEs to really be able to react and be a little bit more dynamic?

[00:15:42.910] – Shaun
Yeah, I think we’ve probably already seen a lot of that in terms of if you think of the smaller organizations out there that are diversified or certainly changed their medium for selling really quickly in order to capitalize on them, capitalize on the fact that not everybody could move that quickly or the change in the market and the change in the needs so they couldn’t offer the same service that they were before. So sure to do new things. So, yeah, I think I think we’ve seen that a lot. And I think we all know that in times of change, yes, some places will suffer, but there’ll be great opportunities for others. And it’s just making sure that smaller organizations are looking out for them as much as larger ones.

[00:16:32.920] – Jane
Sure, absolutely.  And I think that’s a positive kind of look on what has been clearly, you know, a dark few months. And hopefully, obviously, it’s quite bitter at the moment and I think people want a bit of sunshine and want a bit of a bit of hope. So to think there might be some optimism out there is a good thing to have. And if you could provide one kind of professional tip Shaun, particularly now if we’re thinking about, say, start ups and growing SMEs, those who perhaps may even have kickstarted that journey, probably, maybe even before covid kicked in, and that might have been paused, pivoting, we’ve talked about looking at other channels, but if you could provide one professional tip on how to cope in this climate, what would it be.

[00:17:36.030] – Shaun
If I really only had to pick one it would be that cash is king and particularly in startup, but also when you’re growing and monitoring the cash and just making sure that you’ve always got enough for tomorrow and  for your plans has got to be the largest priority. But I mean, I’d also say staying positive and looking for the right opportunities as they come along on the basis that cash is monitored is always the right thing to do for any entrepreneurial business.

[00:18:17.450] – Jane
Absolutely, and was that number two, by the way, Shaun, your optimism, did you slip that one in?

[00:18:28.820] – Jane
Yeah, very useful advice, I think. And as much as I’m sure you know, businesses and growing businesses are constantly thinking about cash, you know, when difficult times arise and panic sets in perhaps sometimes that can not be the only focus. So it’s good that you’re you’re bringing that to the fore again. But what’s also really useful to know and the helpful advice that you’ve given is to look at the other means of support that you can have to do that.

[00:19:06.170] – Jane
By that, I mean either by talking to experts like yourself or by looking at perhaps some of these other added tools, depending on what software they’re using, but looking at other added tools that might be able to help them manage that cash. It’s not necessarily something that, you know, everyone is aware of. And it’s great that you’ve been able to share that, certainly with your contacts and client base. Perhaps, we can have a think about some of those particular tools and we can share later, too. But it’s certainly been a very helpful piece of advice to take on board today.

[00:19:53.270] – Jane
Thanks so much for joining me today, Shaun. I’ve really appreciated it.

[00:19:58.050] – Shaun
You’re most welcome any time.

[00:20:00.540] – Jane
Always a pleasure. And to our listeners, I hope you enjoyed talking SME. Look out for future episodes coming soon.

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