Sage Blog

We knew it was going to be bad.

But as the first official breakdown into what the Government owes is published, the UK’s debt crisis appears to be much worse than anyone thought.

Steve Porter, Sage Accountants Division

New figures confirm that Britain is now in the red to the tune of £4 trillion – a hefty £65,000 per person. And experts say that as analysts continue to pore over the country’s post-election finances, the figure could rise even further.

So how does it all add up? And where do we go from here?

According to research from the Office of National Statistics (ONS), the amount owed is double that previously predicted by analysts – including the Centre for Economics and Business Research.

ONS experts say our borrowing is now so huge it would take each of the UK’s 62 million residents five years to pay off their share.

Their report, published last month, attempts to present a comprehensive review of our debt by adopting an approach pioneered by former Prime Minister, Margaret Thatcher.

Thatcher advised assessing spending and debt in the same way that households calculate what they can and can’t afford.

Round up of our financial health

The ONS says their survey represents the first realistic round up of our financial health since the election and looks at amounts spent on public sector and state pensions, bank bailouts and costs incurred by Labour’s Private Finance Initiative.

The figures are truly mind-boggling. The report calculates there is now a net public sector debt of £1.08 trillion but values state assets – including the worth of every school, hospital, office, council house, railway, ship, aircraft, vehicles and land – at £1.4 trillion.

Analysts added the large amounts spent on pensions – there is some dispute about these but the ONS estimates the public sector pot is £1.2 trillion and the state pot £1.35 trillion – to the additional costs taxpayers must cover, including £40billion for decommissioning old nuclear power stations and £500billion for contingencies.

Another £1trillion to £1.5trillion was spent on banking bailouts and take-overs, setting the total debt at around £4 trillion.

More bad news to come?

ONS chief economist Joe Grice said that the estimates were ‘important steps to help assessment of the public finances and their sustainability.’ But others have warned that there could be more bad news to come.

Mike Denham from the TaxPayers’ Alliance warned that the amount could double as the true cost of helping the banks is revealed and our pensionable population increases.

As he says: “Once you take account of the full extent of state pension liabilities and other costs associated with an ageing population it may be that the real liability could be double even these figures.”

For now, the Treasury’s response has been to establish an Office for Budget Responsibility and a Public Service Pension Commission to look into spending and sustainability respectively – amid fears about cuts and freezes.

Managing public finances

But professional bodies like the Institute of Chartered Accountants in England and Wales (ICAEW) say more wide-scale action is needed to address the problem and are calling for an overhaul of the way public finances are managed.

Chief executive, Michael Izza, explains: “While there are important debates to be had about specific spending cuts, I believe that meaningful reform is necessary to underpin sustainable public finances over the long term and create a culture of fiscal responsibility.”

As he says, there is still a lot of number crunching to be done but finding meaningful, permanent solutions to our debt problem is a challenge we all face.

Thinking business

At Sage our aim is to do our bit in terms of helping sustain a slow but steady recovery. We pride ourselves on our mantra of ‘thinking business’, and this includes an understanding of how important is to keep a track of the financial health of your company. We know the value of financial control and visibility, and this is something that we try and weave into everything we do – whether as part of our software solutions or the advice we offer via our wide-reaching support network.

Business advice and Accountants

Coming specifically from Sage Accountants’ Division, we’re also aware of the key role that accountants can play here – in terms of providing the right software and support to businesses. After all, in our last Pulse survey we saw that small and medium-sized companies now see accountants as their first port of call for business advice.

We’re all in it together, and the time and cost savings that we can produce from our continued close relationships – understanding the needs of a business or practice and offering the most efficient solutions or guidance – mean that we can all play our own part in edging towards economic recovery.

Steve Porter, Sage Accountants’ Division

Sage World is back again in 2011. This year we’ll be in Manchester’s EventCity  on the 12^th and 13^th of October. To register for your free ticket visit www.sageworld2011.co.uk

Marketing Specialist, Geoff Ramm, talks to the Sage Blog about why Sage World adds up to an event not to be missed.

They say business is a numbers game, so here goes;

Geoff Ramm

On the 8^th and 9^th of September 2010 over 1,500 businesses will descend into The International  Centre, Telford.  The investment £0.

In just 48 hours 15 professional speakers will share their own ideas, techniques and vast knowledge to help transform your business, take it to the next level and maybe help you to stay, 1,2 or even 3 steps ahead of the competition.

By my own calculations all you have to do is take a minimum of 1 idea from us in those 2 days and you will walk away 30 ideas richer.

Now let’s think for a minute of the potential of networking with 1,500 entrepreneurs, companies and organisations who will be there.  You will also have your very own Spotme tool to help you to network with exactly the right people you want to connect with!

As for me…..  my ‘Now That’s What I Call Marketing’ – Volume 1 & 2 keynotes will be packed with great cost effective ideas to help you gain more customers, retain more customers  and yes I will also reveal how using powerful numbers will help you to stay ahead of the competition!

Warning there will be great prizes to be won too.

Look forward to meeting you at the 2 day conference.

Geoff Ramm, International Marketing Speaker, Marketer & Author

Register free for Sage World at www.sageworld2010.co.uk

Offering social proof – showing that other people have taken a similar decision – is a proven method of driving marketing response rates.

Jason Sullock

Negative social proof

But one of the most common mistakes, made even by experienced marketers, is provide negative social proof.  And this, with the best of intentions, can actually decrease the likelihood of getting you a good result.

Surely no-one would do such a thing?

You’d think so wouldn’t you?  But it happens all the time… the sign in your Doctor’s Surgery that tells you ‘36 patients did not show up for their appointments last month’… the notice at the National Park that tells you ‘Your countryside is being spoilt every day by the picking of wild flowers’… the politician who tells you ‘22 million young people did not vote in this year’s election’.

What these examples tell you as the reader or the listener is that ‘this is the norm’.

In fact, in one test, a negative social proof statement actually increased the rate of theft of petrified wood in an Arizona National Park by a whopping 5%; whereas the picture of a lone thief and a simple statement asking the tourists ‘not to steal’ reduced the rate by 1.25%.

Another test, again in Arizona, improved the level of recycling by 25.4%, simply by displaying the slogan ‘Arizona recycles’ and an outline of the state filled with the smiling faces of different people.

Clear evidence of how important the use of positive social reinforcement can be.

Using positive social reinforcement in the workplace

And this can be taken into your workplace too.  Rather than expressing disappointment at how many members of staff have not implemented a new process (and highlighting that people have not listened to you), it might be more advantageous to publish a list of all those who have already done so.

So the next time you’re trying to change a situation… think positive.

Jason Sullock, Customer Marketing Manager in Sage’s Small Business Division and author of 555 Quick n Dirty Marketing Tips

Sage World is back again in 2011. This year we’ll be in Manchester’s EventCity  on the 12^th and 13^th of October. To register for your free ticket visit www.sageworld2011.co.uk

We’re getting closer to our free small business event, Sage World 2010. So, we’ve asked another of our top speakers, Rory MccGwire– to tell us why he’s taking part.

I was delighted to be invited to speak at the forthcoming Sage World event as I believe it will provide a great platform for start-ups to gain practical insight, contacts and advice to help them set up and run successful small businesses.

Rory MccGwire

I’m also pleased to see that Sage World is trying to do something different from the usual business event with their ‘interactive delegate technology’. The fact the event is technology driven (and yes, Sage can provide that technology) means there will be lots of demonstrations of the software tools you can use to get your business idea off the ground.

If you’ve already established your business, then you’ll find plenty of ideas to help you build on that foundation and meet the technical challenges that small firms face in the modern business climate. So it’s not about the technology for its own sake. It’s about what the technology can do for you, and the event will be looking at finance, HR, marketing – many of the most important aspects of running a business well.

Which is where I come in. As founder of the Donut small business advice websites , I’m well-versed in what small businesses really need to know. In my presentation, I’ll be encouraging you to take a realistic look at your business and its potential and I’ll be sharing my thoughts on how you can hone and reach your objectives. Sage World also offers a tremendous opportunity for you to build useful contacts. If I were a start-up owner at the event, however, I would be looking to take home more than a fistful of business cards, some leaflets and vague recollections of having spoken to someone from somewhere about something. Networking is about meeting the right people, making the right connections and tracking them during and after an event. So I’m dying to try out Sage’s Spotme electronic networking device. I’m sure this could really help me find and talk to the people that matter to me.

I’m sure it’ll help you, too. So please do track me on Spotme, come and say hello and make the time to hear my presentation.

Rory MccGwire.

Register free for Sage World at www.sageworld2010.co.uk

I recently had the privilege of joining Carl Hopkins and Jonathan Hick (who you might have seen on Channel Four’s Secret Millionaire) as judges for the North region heat of The Pitch 2010.

The Pitch 2010: North England heat

What is the Pitch?

The Pitch 2010, for which Sage is one of the sponsors, is in its third year and is Britain’s largest pitching competition.  It is similar in style to Dragon’s Den and instead of pitching for an investment they are pitching for a chance to win a prize of business services worth £50,000.

It’s a tough competition with five finalists selected from regional heats and one people’s champion selected from an online public vote.  The winner will be announced in November at The Business Factory event.

As a judge my goal was to understand and evaluate the business concepts, identify the opportunities and the threats as well as the business and presentation skills of the people pitching, searching for the best of the best.

The North Region Finalists

• Gaist – Utilises Microsoft Bing Maps and overlays this with information about transport infrastructure such as road works etc to enable organisations such as local councils and the fire service to collaborate real time.
• MyMall – A virtual shopping mall which enables you to experience all elements of online shopping in one place.
• Meltwater – A chocolate fondue which uses hot water allowing you to enjoy chocolate in a healthy way with the minimum of fuss.
• Acadreamia – An innovative service that enables university students to rent textbooks easily and affordably.
• Philip Porter Guitars – Hand built electric guitars to Phillip’s specifications which he believes will eliminate amplification feedback.

The entrepreneurial spirit is alive and well in the North

Throughout the event I was really impressed with the entrepreneurial spirit of the North Region; the presenters were passionate about their business and where they saw it would fit in the market.  They talked us through their idea, where their business was now and where they saw the future.

The ultimate winner of the North Region was Gaist who impressed us all with their business acumen, an impressive track record and some existing and potential contracts which have been borne out of their past success.

With all of the businesses they had real areas of strength as well as areas where we could help with advice on other options to consider.

Advice to start-up businesses

1) Don’t restrict your market

If possible open your business to as many options as possible. For example with MeltWater initially their business concept was a healthier way to enjoy chocolate which may limit its appeal to people who want to be healthy.   The product itself is also completely transportable so could also be marketed as a way to enjoy fondue on the move as part of a romantic picnic or whilst camping.  By opening up the concept you widen the markets you can operate in.

2) Don’t underestimate the logistics of your venture

Whilst starting out and having a small client base it might be feasible to manage the operation yourself but once the business grows will that infrastructure still be appropriate?  When you only have a few customers you may be able to purchase package and ship yourself, however when you have 100’s of customers you may need premises and staff all of which need to be built into your business plans.

3) Understand your customers

Who is your customer and what are they looking? Don’t only consider what product or service they need, but what sort of customer experience are they looking for? Customers will have a preference in how they interact and how they purchase. For example many will research on the internet but for certain products they will choose to buy in the store as they want the experience that brings.  By understanding this and making it easy for customers to move seamlessly through channels you will widen your appeal.

4) You don’t need to be overwhelmed

Starting your own business and then running it successfully can feel like you are having to become an expert in a variety of fields from marketing to service, sales to finance and it can feel like you are on your own.

It doesn’t have to be like that. Take advantage of free advice and software on starting up and running your business. We have a range of free business white papers covering  topics from starting your business to understanding your market. There’s also plenty of free software out there to help you get off the ground, such as:

• Sage Planning for business – free software that will help you plan and launch your new business
• Sage Invoicing – free invoicing software

Good luck!

I wish all you budding entrepreneurs out there the best of luck and would recommend you take up all the advice available. And of course, best of luck to all of the The Pitch’s finalists.

Kim Eyre, Sage’s Small Business Division

Sage World is back again in 2011. This year we’ll be in Manchester’s EventCity  on the 12^th and 13^th of October. To register for your free ticket visit www.sageworld2011.co.uk

We’re working hard to get everything ready for our free small business event, Sage World 2010. So, we thought we’d ask one of our speakers, Chris Hunter - writer, businessman and former bomb disposal specialist – to tell us why he’s taking part in our event.

As somebody used to taking risks and dealing with pressure, the chance to become immersed in a forum of this kind, is an opportunity I simply couldn’t miss.  Sage World’s ‘Immerse Yourself’ event not only offers an amazing number of networking opportunities but  also an impressive line up of inspirational speakers all of whom promise to offer business beating techniques that attendees can implement immediately.

Chris Hunter, speaker at Sage World 2010

Personally, I’m going to be drawing some parallels between my life now – as a businessman – and the lessons I learned in my former life where I frequently operated in high pressure environments in which disabling terrorist bombs and dealing with the continual threat of insurgent ambushes were everyday occurrences.

Stay focused

I’m going to be covering a lot of topics, but I’m especially looking forward to discussing the importance of staying focused: Four days into my tour in Iraq, a tabloid published fake photographs that led to a local cleric putting a price on our heads. That night, my driver and I were shot in a terrifying ambush. Staying focused was all that kept us alive.

Pursuing your goals

I’m also going to be sharing my thoughts on importance of pursuing a goal relentlessly – but not over-complicating a situation. In Iraq, as we became more skilled at disabling terrorist bombs, the bombers also became more skilled and determined.  My team only stayed alive because we didn’t cut corners and were relentless in seeing the task through to the end. But the bombers weren’t our only enemy.  Because of the intense heat and the harsh terrain, our kit and equipment often broke down right at the critical moment.  Our ability to improvise and think on our feet was the difference between instant failure and total success, and we quickly learned that it often pays to keep it simple. NASA spent $12m designing a pen that could write in space. The Russians took pencils!

Overcoming fear

And finally, for those of you who get nervous at the thought of networking…I’m also going to be offering a few techniques on overcoming fear: ‘You’re going to do the world’s most dangerous job in the world’s most dangerous place.’ That’s how my bomb disposal tour in Iraq was sold to me, and I wasn’t overly enamored at the prospect…but I knew that fear can be your friend; and if you take nothing else away with you, this event will teach you to embrace and nurture fear – and how to gain strength from it to give yourself a competitive edge.

Life is a daring adventure…or nothing at all.  See you there!

Chris Hunter

Register free for Sage World at www.sageworld2010.co.uk