It is so hard to keep in touch with everyone. Family, friends, associates, business contacts, the list goes on and on.

I count myself lucky to know as many wonderful people as I do (and I am sure you know who you are!). But when I look back at my life I, realise how many wonderful people I have known, but who, for one reason or another, I have lost touch with.

Here’s a thought, perhaps not everyone we meet is supposed to be in your life for always.

Not all relationships can last forever. Relationships change over time. There will be times when a temporary relationship is necessary (such as bringing in a consultant or expert), times when a cry for help is best made to a stranger.

How long is the person we talk to next destined to be in our lives?

In business, as well as in my personal life, I can look back and see how my needs and wants have changed. And as I have grown and developed, I can see how I have drifted into (and out of) other people’s lives.

Rather than get depressed about how many good people I no longer speak to on a regular basis, I try to celebrate the wisdom I have gained from knowing them.

For a number of reasons, I decided to visit a networking event just outside Nottingham recently. Having overcome my fear of walking into a room of people I didn’t know some time ago, I was really looking forward to going. Apart from the hope that I might meet the one person who could unlock all my businesses potential (unlikely!), I was looking forward to expanding my contacts, and to learning about what was going on (in business terms anyway) in the area.

I have a theory about networking. It’s a bit like big game hunting in Africa. Some people run around like headless chickens, shooting anything that moves, or things that just look like they might be a target. Some people wander around aimlessly, hoping that they will eventually find what they are looking for. Some hunters just stay where they are, waiting for their prey to pass by.

I have chosen a slightly more scientific approach: I have thought long and hard about what kind of animals I am after, worked out where they go to drink, and have camped there. I know that sooner or later they will come to me.

It does mean that some meetings I attend are fruitless, but at least I know I will meet some interesting people while I’m waiting!

Networking can be a hard slog, and there is never a guarantee that you will meet the person you want to meet. But by carefully targeting the groups you visit, you can greatly improve the chances of meeting the right person.

I just picked up this article – although brief, it points the finger at what I believe lies at the heart of the economic “crisis”.

http://www.charityfinance.co.uk/home/content.php?id=2424&pg=&cat=58

Who is asking the hard questions in your organisation?

Met an interesting person yesterday – which sparked a debate about types of accountants. Not whether they are interesting or boring (!), but whether they are financial or management accountants.

Financial Accountants produce the raw data – they are the unsung heroes and heroines who make sure your numbers are produced on a timely and accurate basis, that debts are called in, and creditors appeased.

Management Accountants are a different breed. They look at the data and ask the “difficult questions”. Such as “Is this a good number?”, “Have we achieved what we thought we would, and if not, why not?”, and perhaps the most important question, “What is the implication of this data to our financial future?”.

Most businesses have Financial Accountants (for example the bookkeeper). I believe businesses need both kinds of accountant, and that it is very hard to find someone who can be both.

Who is asking the difficult questions in your organisation?

With thanks to David Pugh of Daymar Ltd

Well at 3.30 yesterday I settled down to watch the Report. The first half hour told me nothing except how well the government had done and that today’s problems were solely due to USA sub-prime borrowing. The next half hour mainly told me what they had leaked out to the weekend press anyway, so why bother ? And why bother indeed was the feeling after Alastair had sat down.

So for those of you who might have felt too excited to watch it – a quick update for you.

Gordon was there just behind Alastair – presumably just a coincidence that Alastair behaved like a glove puppet of Gordon. And Gordon did his nodding act again, and this time we got a few smirks as well. Good to see how seriously he takes our economic problems.

Apparently one of the main reasons for the global economic crisis is the high level of debt everywhere. So the government solves this by ….yes…increasing our country’s debt. But (in the words of the M&S advert) this is not any normal increase, but an increase to the highest level in history.  Hmmm – what was it that our friend Gordon used to say about “prudence” ?

Still don’t worry – Alastair said his budget should be back in balance by 2015/2016 – what a shame we can’t all wait for that date for our personal and company budgets.

Alastair has given us one short term (temporary) benefit before we pay (permanently) through our nose for this debt. Yes – VAT down 2½% from next Monday up until 2010. This is supposed to give a boost to spending. But……….. there is no VAT on food, children’s’ clothing, books, papers, postage, train and bus fares or council tax. There will be no reduction in petrol or diesel, or in heating bills. So no reduction in prices of the things you pay for every day. But there will be a price cut in televisions and all those things you buy once in  a few years, and then only when you have the disposable income to do so. Hmmm – so where is the boost to the economy?

Even so, with stores slashing prices by 20 to 30% I am not sure how we will actually notice this. In fact, how many retailers will keep the VAT cut as a contribution to their margins, or use it to offset the costs of changing tills, brochures, price lists and overtime for everybody to do this over the next weekend, and not pass it on? However, I am sure we will see the increase clearly when it goes back to 17 ½% on new year’s day in 2010 – so a happy new year to look forward to then. Still, if it does get consumer spending up, it will be on consumer goods in shops – so good news for employment in China as everything is made there now, but not much benefit for the UK. 

This VAT cut does nothing for our heating bills, as these have 5% VAT and this is not affected.

But prices for tobacco, alcohol and fuel will not go down – because he is increasing duty to offset the VAT reduction. In fact those of us claiming VAT back on petrol and diesel lose out because there is less VAT to reclaim! I wonder if Alastair has thought of how goods get to the shops ? That lorry derv will now cost more so food prices will go up even more and there is no offsetting as food generally is not subject to VAT.

And when VAT goes back up at the end of 2009 – will they reduce the fuel duty and the alcohol duty to compensate for the increase in VAT – am I being cynical if I think not? So yet another rise in fuel and drink prices again in 2010 then – by the extra fuel duty today plus the extra VAT which in turn is charged on top of the duty.  And that increase in fuel prices will feed through to higher prices of everything else. Hmmm – and this budget is designed to boost the economy?

And tax increases to come in April 2011 – is it just coincidence that this date is after the next general election ?

Increased income tax in April 2011 for those earning over £145,000 – up to 45%, and detrimental adjustments to the personal allowances for those over £100,000. Also not until April 2011 is that other income tax increase (oh sorry I mean national insurance which of course is not income tax is it?) when it will go up for both employers and employees – an extra ½% on all rates.  But it’s more than that – between you and your company you will be paying 1% more. And this is on top of the national insurance increases which happened just this last April – he forgot to remind us of those.

So no higher tax or national insurance until 2011 – is this because after then Gordon and Alastair and company expect that they will not be earning their high salaries by then ? (can’t think why not…………………). So it’s a good job that London MPs last August quietly awarded themselves a £6,065 rise in their London allowances to take effect next April to help them through this.

But some good news – the personal allowance increase this year (after the 10p tax fiasco) will become permanent. This is the amount you can earn before income tax is taken off. And that 2p income tax he proudly announced early this year off earned income – well it  has still not been taken off savings income, although again he did not mention this.

For those on state pension – well, not bad as there will be an increase in the basic amount from January (although this is not a budget point as it would happen anyway) plus a £60 boost payable in January.

So how is it for those of us with small businesses and companies ?

Well some (temporary) good news – the increased corporation tax rate for small companies next year from 21% to 22% has been “postponed” – he did not say until when but probably only 12 months deferment. It has still been increased from the 19% we enjoyed a couple of years ago.

But of course the increased employer national insurance will hit – not just on salaries but on benefits in kind too. He also forgot to remind us that in 2012 we will also have to bear a compulsory 3% employer costs on pensions.  So a good help to employment in the economy by then……….

He also gave some help in spreading tax bills if the company needs it – but it means phoning a specific helpline and negotiating with HMRC, and interest will still be payable on the delay. Still if it all does not help – then company losses (up to £50k) can be offset by previous years’ profits up to 3 years, increased from the previous one year limit.

They have confirmed there will be no action in 2009 on “income splitting” following the Arctic systems case, but they are keeping it under review. So we are OK for sharing dividend income with our spouses next year but we don’t know for how much longer. With the increase in national insurance we will help you to avoid this by paying through dividends which we can continue to do under current legislation.

So in summary – not really any good news in the short term despite the government spin  - no reduction in food prices, heating bills, fuel prices, council tax or anything else we classify as essentials – but bad news in the long term as we will all be paying for that increased government borrowing in the future.

But if you get really stuck – you can now pay tax to HMRC by credit card (for a fee which they will charge you as well) – and this from a government complaining we have put too much on credit. Am I being cynical again?

As always we need to see the details in the press releases which may refine some of the points above, but we will keep you up to date with developments. Please feel free to raise any queries with us, or to refer us to any colleagues who we can help.

Oh and don’t be fooled by the stock market increase yesterday – that was due the US bailout of Citigroup and not Alastair’s speech. So we have to be grateful to Bush after all.

After following this blog for many weeks, and appreciating how much I have learnt from it, I thought I’d share the link:
http://www.financeweek.co.uk/ceos-diary

It’s the story of a CEO facing the same day to day issues and dilemmas that every business manager has.

OK, you may have more or less zero’s on the end of your income and expenditure targets, but the honesty, relevance, and rawness of his story is just great.

It may help to read the blog from the start, so grab a cup of your favourite brew, and enjoy.

Interesting article here:
http://www.irishmedicalnews.ie/index.php/component/content/article/1-news/440-health-charities-funding-concern

But it got me thinking about the term “recession proof”. I don’t think any organisation (with the possible exception of high street banks, given the government’s recent action) can ever be recession proof.

The best any business can hope to be is aware of the economic climate, and be able to adjust its business plan accordingly. Periods of growth demand a different strategy from a period of decline.

Are businesses out there struggling because they are unwilling to take the steps required to stay in good shape? No business has a “god-given right” to survive, not even a charity.

Social networking seems finally to be “coming of age”. Business leaders I meet vary in their opinion of such sites and means of communication, but this article shows that even serious sites have a lot to offer.

http://lateralaction.com/articles/social-networks-for-creatives/

That said, I don’t think that online networking will ever beat the good old fashioned chat over lunch or a cup of coffee. Or is it me that is old fashioned?