National Westminster, which has pounds 11bn on loan to a million customers in the sector, tomorrow launches Making the Most of Your Business. The booklet is subtitled 'A Practical Guide for Managing an Established Small Business' and is designed to complement NatWest's Business Start-up Guide.
The idea is to help firms that have survived the first stage. As Jane Bradford, the bank's head of small business services, says: 'It recognises that once you've started up, that's not the end of the story by any means.' Indeed, one of the factors prompting the booklet was the demand from established businesses for the start-up guide.
But acknowledging the existence of a 'neglected audience' and developing a way of satisfying its needs turned out to be two very different things.
The co-authors of the booklet are Tim Atterton, executive director of Durham University's small business centre, and Simon Haslam of the David Hall Partnership, a Yorkshire-based consultancy. Mr Atterton admits they had great difficulty at first in deciding how to deal with a sector that covered a broad spectrum - 'from the professional at one end to the plumber at the other'.
Since the authors were targeting established businesses, there was no intention of telling people how to run their companies. 'We decided to stimulate thought and came up with the idea of giving them confidence,' Mr Atterton says.
Covering such topics as focus and direction, customers and markets, cash and profit, and managing resources, the booklet is endorsed by the Plain English Campaign and amounts to well under 100 pages. There are guidelines on producing cash- flow forecasts, operating budgets and financial ratios, as well as other measures that will help owner-managers in dealings with their bank managers.
Much of the content reflects the training courses run by the Durham centre for the bank's managers. As a result, a great deal of attention is paid to stock levels, debtors and other details that affect cash flow.
In addition, the booklet offers plenty of instances of the right and wrong ways to go about things. The intention is to encourage managers to 'observe the ideas of some of the more successful businesses,' Mr Atterton says.
For example, the guide recounts a story of two neighbouring houses served by two different carpet fitters on the same day. One family returned home to find the carpets catching the bottoms of doors and scraps left lying around. The other could open the doors of the house and, instead of a mess, found a bouquet of flowers and a business card asking them to make contact if there were any problems. Not surprisingly, the second company received the most new business through customer recommendation, and was able to charge the higher price.
Not only did the authors draw on the experience of many small firms in the North-east, those involved in the production of the guide have, they say, started to apply the lessons.
NatWest's own research has shown that the proportion of its small-business customers borrowing money for start-ups has fallen from 50 per cent to 20 per cent in the past five years. This is because many new businesses have been formed on the back of redundancy payments. This in turn provides a further need for the booklet, because the first in-depth contact between the business and the bank comes after 12 to 18 months, when the firm may be seeking advice and / or finance to expand.
Although the NatWest guide will be available to non-customers, Jane Bradford says the objectives are not only altruistic. By ensuring clients are better informed before they meet the branch manager, the bank can help them in a more cost-effective way.
'It's consistent with our overall approach to the market, which recognises it's in our interests as much as the business's to improve the quality of the owner.'
But Mrs Bradford also stresses the importance of the small-business sector to the national economy. Agreeing with the Chancellor's Budget assertion that this is where growth will come from, she says: 'There are 3.5 million small businesses. If just 10 per cent of them take on one extra person, it's a big dip in the unemployment figures.'
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