A recent ABN AMRO Commercial Finance round table event at Penarth Pier Pavilion showed up an intriguing truth about financial advice – some business people just don’t get it. A colloquium of business leaders and advisors were brought together as part of an initiative to focus on contemporary opportunities for growth. In the process they offered up a surprising insight into what it means to do business in 2014. The forum was heavily geared towards those such as accountants offering business advisory services and the role that those agents might play as catalysts for growth amongst their clients.
It seems that some people don’t get financial advice in the sense that they don’t make any use of it, and that’s largely because they don’t get it in the sense that it doesn’t actually mean that much to them. Taken at face value, these insights suggest there may be areas where cultural factors – rather than any prevailing economic or commercial conditions – are likely to impede prospects growth in the months and years ahead.
From the evidence of the ABN AMRO Commercial Finance round table the problem appears to be one that is particularly embedded within the mentality of business owners who come from more remote, community-based areas. In sum, delegates identified small business owners who would rather do business with people they know than reach out to new, previously unexplored markets.
Of course the problem with such a mind-set is that it makes learning new ways of going about developing a business difficult. As the ABN AMRO Commercial Finance round table delegates agreed, this led to reluctance to take on debt, diminished appetite for growth and an equally damaging lack of awareness of the financial tools with which to achieve it. Taken together these factors represent the exact opposite of a virtuous cycle.
It is, perhaps, telling that a forum brought together to explore avenues for growth spent a considerable chunk of its time describing what it saw as growth limiting factors. One point of consensus was the need to foster a greater appreciation of the economic need for growth – as opposed to the ‘tick-along’ mentality of rural lifestyle businesses.
It is, it goes without saying, quite a journey to go from discussing the business case for growth per se to start talking about asset finance, private equity funding or invoice factoring. Such devices might generate immediate economies or cash flow benefits, but it seems there is some way to go before the conversation might head that way.
Before we slip into the realms of easy stereotype, it should be pointed out that there are plenty of rural businesses enjoying sustained growth both at home and abroad. However, that cultural predisposition to look inward does point to a factor that might make it more difficult to develop a high growth, sustainable business in the more far flung reaches of the nation – especially if it happens to be a business geared towards the provision of financial services!