If there is a defining difference between the British and American culture it is about the role of money. In America, everything has a price. In Britain, I believe that we place a greater emphasis on support, that has no price. Whether it’s volunteering on a regular basis, caring for others, or just being there to help out, the value of what we give is worth far more than the value of our financial donations.

I am not suggesting that we shouldn’t be giving more funds to good causes, but it is also worth stopping to think for a moment about the value of your time given to help others. As businesses know, time is money, and is equally valuable whatever you do with it.

There is a debate about whether charities should record the value of non financial contributions (particularly volunteers time) in their accounts to show the true value of their “receipts”. Needless to say this has been contentious. After all, is an hour of one person’s time worth the same as another? Do we value time on the basis of what it is worth to the giver or the recipient?

What we give is personal and should reflect our ability to give, which might mean its less about money, and more about our skills and experience. To me, the important thing is that we give what we can to the community that we are part of. Sometimes just giving time is the most valuable donation of all.

VAT is an amount added by the supplier of most goods and services to what they sell, and which they must by law pay to the government. As individuals are usually not VAT registered, what we buy includes VAT, and is not reclaimable as it is to most businesses.

Offers by shops to cover the rise in VAT mean that they keep the sale price the same, but reduce the amount they get to keep after deducting the VAT they owe to the government. For example, if you buy a sofa before the increase for £500.00, the VAT due by the seller is £74.47; after the increase, the seller has to pay £83.33 to the government, meaning they are £8.87 worse off.

To most of us, the increase will mean very little, as the impact of adding 2.5% to the cost of a purchase is pretty small. For example, assuming no other changes to its price, an item costing £100.00 in the shop will be re-priced at £102.13. To incur, say, an extra £20.00 per month as a direct result of the extra VAT would mean you were spending £940 per month.

As an individual, it’s doubtful you will feel a financial impact from this change.

So although an increase from 17.5% to 20% sounds a lot, the only real winner will be the government. Some things never change.

To some, this is “situation normal”, and many organisations exist in this financially precarious state for months and even years. Having very little money is not a crime, nor is it always a sign of instability. Money in the bank is only working for the bank, think about what you could be doing with your cash to further your own business goals.

But when it happens to you for the first time, or if you walk into a role, or organisation, in a position of responsibility for the first time it can seem a frightening situation. Questions like “Will we be able to pay our staff”, “How can I please the screaming creditors”, or “The bank manager might pull the plug”, can keep even the strongest of us awake at night.

The first thing to do is not panic. Knee jerk reactions might further de-stabilise the organisation and, at worst, tip you over the edge.
Work out who owes you money. Chase it, hard.
Work out who you owe money to. I suggest you are open and honest with them. I would rather be thought of as a “slow payer”, than a “no payer”.
Take control – write down your realistic financial goals. Then write down what you need to do to achieve them. Then start doing those things.

Perhaps the best advice is to talk with someone who has been in that situation themselves (and survived!). It might not immediately solve your problem, but you might gain some strength, insight, and develop some tactics to help you pull through.

Thankfully most things that go wrong can be corrected.

But are there things that can go wrong that you can’t correct?

What is it that tips a business over the edge and into administration, or bankruptcy?

Top of the list has to be cashflow. No cash means no business.

Also up there is an inadequate capacity to deliver.

Perhaps the most difficult to deal with is a lack of confidence. It’s intangible. It’s not always something you know about, or can do something about.

Confidence is one thing you can create without spending a lot of money. Being positive can have a huge positive difference on you, your business, and your customers.

I believe that the rules are probably about right, possibly a bit generous, but basically right. The governing document makes it very clear what should, and should not, be claimed, and why.

However, I have major issues with the way in the rules were administered. Greed and maladministration have allowed MP’s to claim for items that do not fall within the rules they themselves set. Quite clearly, not only did some MP’s break their own rules, but the laws of the land as well.

This is not a modern problem, in AD130 Juvenal wrote, “Sed quis custodiet ipsos Custodes?” (But who will guard the guards themselves?).

There is no perfect system. But there is a compelling case for better independent scrutiny.

It got me thinking. What was really at the heart of his problem?

The Credit Crunch refers to a bank’s unwillingness to lend money. Was he looking for a loan? If so, what for? To invest in greater capacity? To launch a new line of products or services? To help with poor cashflow?

If it was the last reason, I can understand the bank’s reluctance to lend, and crunch his credit.

Banks have not helped themselves in recent months, but their core purpose remains the same: to lend money to businesses. In return they expect a profit on their investment.

If you are having difficulties convincing your bank to lend money to you, maybe it’s because of something you need to do, or say.

If you need help talking to your bank, let me know. I might be able to help.

So what is the Balance Sheet? In a nutshell it tells you three things:

1. How much you owe to others
2. How much other owe you
3. How much cash you have

Now I may be simplistic, but I would say these three facts are the three most important things every business owner needs to know – all the time.

There is a lot of jargon in finance and accounts. I make it my business to explain everything in plain English.

The Balance Sheet is getting a lot of air time because it’s important. If you still don’t know what it’s about. Call me!

Later, a cop comes in for a haircut, and when he tries to pay his bill, the barber again replies, ‘I cannot accept money from you. I’m doing community service this week.’
The cop is happy and leaves the shop.
The next morning when the barber goes to open up there is a ‘Thank you’ card and a dozen donuts waiting for him at his door.

Later that day, a college professor comes in for a haircut, and when he tries to pay his bill, the barber again replies, ‘I cannot accept money from you. I’m doing community service this week.’
The professor is very happy and leaves the shop.
The next morning when the barber opens his shop, there is a ‘Thank you’ card and a dozen different books, such as ‘How to Improve Your Business’ and ‘Becoming More Successful.’

Then, a Member of Parliament comes in for a haircut , and when he goes to pay his bill the barber again replies, ‘I cannot accept money from you. I’m doing community service this week.’
The Member of Parliament is very happy and leaves the shop.
The next morning when the barber goes to open up, there are a dozen Members of Parliament  lined up waiting for a free haircut!!

And that, my friends, illustrates the fundamental difference between the citizens of our country and the Members of Parliament.

She was talking about the charity she worked for, but made a compelling case for the involvement of all businesses and individuals to get involved.

The world we live in is no longer restricted to those we live next to. Our next door neighbours now live across the globe.

Our success (individual and corporate) depends on the well being of those we live with. As we hope to be looked after when things don’t work out, it is our responsibility to look after those less fortunate than ourselves.

How do we know who to help?

The message is: find out who you can best help, and get involved…

The media has led us to expect a significant budget, responding to extraordinary economic circumstances. Having run the “what this means to you” calculator a couple of times I can’t see any dramatic change to my personal, or business, circumstances.

Perhaps the message is that the chancellor hasn’t got a wand to fix the problem. In fact, perhaps the problem is not tangible enough to fix. I have suspected that a good proportion of our current and future woes are self perpetuated, by the “ever ready to tell a bad story approach” of the media, and by our own insecurities.

If there is a way out of the hole we are in, perhaps the message is that it’s up to each of us to grasp opportunities as they come, and take control of our own destiny.