Riding rough shod over Mervyn’s rocky road

Riding rough shod over Mervyn’s rocky road

Posted by

Martin Brown

February 2012

Thankfully the days are getting longer and brighter; which is just as well because media headlines are getting gloomier and gloomier, darker and darker…

Please – just give me a break from all this doom-mongering.

The Governor of the Bank of England, Mervyn King, caught my ear with his speech on the economic recovery being long, arduous and uneven. The UK, he said, was suffering from low growth not only because of the rate of inflation, but also because UK households have become net savers rather than net borrowers.

To be fair, the Bank of England Governor has a tough job when speaking in public; everything is carefully measured thanks to the effects a word out of place could have on financial markets. And, I think, looking below his cautious use of words, Mervyn King was positive about the economy. In a cautious, downbeat sort of way.

Now, as you can appreciate being Scottish, I’m a master at making my pound go further – it is always your round at the bar isn’t it? – but I’m only seeing an upside to these current economic conditions.

And I’m not alone. Despite the media’s damagingly depressing viewpoint, the SME businesses I speak to agree that it’s tough out there, but they are actually doing business. And have plans for cautious expansion and rising sales. Not quite the bleak outlook the media would have us believe.

The other upside, if you like, is that economic conditions such as these make companies reassess their business practices. Which, in turn, makes them into better businesses. Professor Russell Giggs has been talking about one aspect of this in his BIS Blog What brings cash – finance fitness It’s worth a quick read.

Professor Giggs says that those companies surviving the post Lehman meltdown had learned to spread their customer base without being dependent on one big income provider. Professor Giggs’ point is that with a larger sales base you can continue to make sales. Without sales there is no cash, he says – and we know what cashflow is to a business. The point is well made.

In our business we’ve seen more customers turn to contract hire, or use flexi-hire, because they’ve learnt the value of cash in their business.

In our business – fleet management and vehicle finance – we’ve seen more customers turn to contract hire, or use flexi-hire, because they’ve learnt the value of cash in their business. Products such as these provide transport for staff – vital for sales and support services – at a monthly price, rather than the fund-sapping outright purchase which for so long has been embedded in the psyche of small businesses. It’s about matching your requirements to cashflow – and making more sales. As a result, we now manage a record 10,000 plus vehicles.

We’ve also added to our team by way of three new sales offices: Tony Fryer, based in Portsmouth, Hampshire; Alison Jones, based in Birmingham; and Tom Fitzgerald, based in the Home Counties area.

I have no doubt that Mervyn’s road ahead is uneven, but it’s certainly nothing less than navigable – especially in two of the most recent cars launched to market: Audi’s A6 Avant allroad and Citroen’s stunning DS5.

Rocky roads? Rise up and clamber over them!


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