The address is Highwoods Square, Highwoods, Colchester, Essex C04 4BB (01206 853888). IF YOU run an SME or Owner-Managed Business and you want to cope with potentially tough times ahead, you need to pay attention to the 3Ms – management, market and money. If a recession strikes, and all the danger signs are present, firms must act now to ensure they are ready to respond to fast-changing market conditions. It is vital some of these steps are taken if firms want to be around to enjoy the recovery.
ManagementFOR MANY SMEs and owner-managed businesses, family involvement can lead to a lack of democracy or a business where ineffective family members hold down jobs which are not necessary or could be done better by others. Family involvement, if not carefully watched, can lead to an inflexible management team that is insufficiently skilled to effectively steer the company through difficult times.Directors should ask themselves if the voices of younger, motivated managers are penetrating the ears of a self-opinionated and autocratic chairman? They should also consider if there is a strong finance person on the board, and will they stick to their guns during opposition from others?MarketTHE SME’S market position, relative to its competitors, is crucial. Companies that may need to review their strategies before the going gets rough will have many attributes. They may have taken on a “big project” or an exceptionally large contract, for example, which, if it fails, has the potential to bring down the company.Firms that have lost traditional export markets owing to high exchange rates may no longer be competitive in those markets when rates adjust downwards.

Also, firms which have not adjusted to their European customers’ requirements by, say, considering the use of the single European currency will be at a disadvantage. Sales-driven companies, where turnover is increasing, have to watch not just margins but the growth in their working capital requirement. When recession looms and sales volumes fall, banks seek compensating reductions in facilities.MoneyFOR MOST SMES and owner- managed businesses, the management of cash as a scarce resource is probably the single most important issue in running a business. For all businesses, liquidity management must be competent, reliable and creative. Businesses that do not effectively address certain issues will be caught out. Assuming the management information system is effective, does management make proper use of it? Are cash implications deduced from the trading results explained to the “non-accountant” directors and are action plans developed?Cashflow and budget forecasting is not a “once-a-year” activity.

Companies should continually re-forecast and build in an analysis of the sensitivities of normal commercial hazards.Also, can the company competently present its cash-management plan to its bankers when dealing with its facility renewal? Has the company really understood and addressed the issues most likely to be of concern to its lenders? If they get this wrong, it is an uphill task to re-establish confidence the second time around.What’s the solution?SOME SMES and owner managed businesses fall in a recession because managers do not recognise or will not admit they need help from company outsiders. Twice during the week I have managed an ambrosial start to the day, held back from more regular gluttony only by the fact that mushrooms are so thin on the ground in our part of the country. IS THERE any better breakfast than one of wild mushrooms, picked with the dew on them at 7am, cooked briefly in butter (with plenty of salt and pepper) at 7.30, and eaten at 7.35? As with new potatoes, speed into the pan is everything: if you delay more than a few minutes, half the magic is lost. absurd as it sounds, I think that the real explanation was our innocence.Will his son ever have recourse to it?. WHO EVER used some coinings logged by the OED? Swimgloat was invented by Bernard Berenson’s brother-in-law, that languid man of letters Logan Pearsall Smith whose Trivia is much admired by Gore Vidal. a term which suggests the eternal resilience of the picaresque hero”.