One step ahead Your free recession guide Thursday 20 August 09 Supported by

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One step ahead -Your free recession guide
Thursday 20 August 09Supported by
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Alan Coats, Senior Manager Commercial Banking,
Lloyds TSB Graham Birse, Deputy Chief
Executive, Edinburgh Chamber of Commerce Kenneth
McDowell, Partner, Chiene Tait Mike Coulter,
Owner, Digital Agency Neil McLean, Employment
Law Partner at Anderson Strathern Josef
Church-Woods, Marketing and Communications
Executive, Edinburgh Chamber of Commerce Bryan
Leslie, Business Solutions Manager, Edinburgh
Chamber of Commerce
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Chiene Tait The Recession the essential guide

• 20 August 2009 Kenneth McDowell

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Introduction

• Credit crunch - a working understanding
• Impact for your business
• Pressure on profitability
• Pressure on cashflow/liquidity
• Cash is King
• Recession tool kit the fundamentals
• Customer cashflow management
• Management accounts red flag working capital
  management
• Active cashflow management
• Managing funding relationships.

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Customer Cashflows
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Customer Cashflow Management

• Accepting business
• Invoicing
• Cash collection
• Default options

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Accepting the business

• Know your customer
• Risk Assessment
• Engagement terms
• Credit assessments
• Staged payments
• Credit terms

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Invoicing

• Every day is a billing day
• Accuracy and completeness
• Late payment provisions?
• System of dispute resolution

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Cash collection

• Immediate contact when payment not received
• Dont be shy its your money!
• Future terms for persistent late payers
• Move customers to electronic transfer/direct
  payment
• Be alert to stalling tactics
• Have agreed action for old debt collection
  (including debt collectors/legal action)

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Default Options

• Make sure your facts are accurate
• Stop supplying further goods/services
• Commence agreed collection protocols
• Understand the positions
• Slow payment v problems
• Types of insolvency

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• Management accounting red flags

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Management Accounts red flag working/capital
management

• Timely and accurate
• Key customers/sector clusters/margins
• Know your costs
• Cost structure fixed v variable
• Investment in working capital
• Stock/debtor days
• Stock/debtor ageing

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Active Cashflow Management
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Active cashflow management monthly forecasting

• What is your strategy?
• Are customers stable?
• Channels for new work?
• Control of costs?
• Scenario planning/stress
• testing
• Cash modelling/ financing
• requirement

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Managing funding relationships
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Managing Financing Relationships

• Banks
• Covenant compliance
• Banks revisiting terms
• Preparation for any meeting
• business picture and projections
• Other financing options

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In Summary

• Credit availability issues foreseeable future
• Survival good businesses well managed
• Profitability important however Cash is King
• Recession toolkit
• Managing customer cashflows
• Management accounts red flag working capital
  management
• Active cashflow management
• Managing funding relationships
• Keep smiling

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Recession the essential guide downsizing,
restructuring employment law

• Neil Maclean
• Partner and Head of Employment Unit
• 20th August 2009

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Facing up to recession

• Credit control, debt management, and managing
  cash flow
• Business development, marketing and PR on a low
  budget
• But it still isnt enough.
• Downsize, restructure and employment law.

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Alternatives to redundancy

• Recruitment freeze and reduction of workforce by
  natural wastage
• Removal of temporary or contract staff
• Overtime ban
• Redeployment/retraining
• Lay off
• Short-time working
• Sabbaticals
• Pay freeze/cut
• Cancellation of bonuses/withdrawal of benefits
• Flexible Working
• Early retirement/voluntary redundancy

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What is redundancy ?

• Termination is due to redundancy if
• The employer has ceased or intends to cease to
  carry on business for the purposes for which the
  employee is employed either generally or at the
  employees workplace (Business disappearing)
• or
• The requirements of the business for employees to
  do work of a particular kind have ceased or
  diminished (or are expected to do so), either
  generally or at the employees workplace (Jobs
  disappearing).

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Collective redundancies

• Where employer is proposing to dismiss as
  redundant
• 20 or more in 90 day period at same establishment
  (minimum of 30 days)
• 100 or more in 90 day period at same
  establishment (minimum of 90 days)
• Must provide statutory information consult with
  employee representatives about
• Avoiding the dismissals (including reasons for
  the redundancies)
• Reducing the number of dismissals
• Mitigating the impact of dismissal
• Must notify DBERR
• Failure to inform consult
• Protective awards of up to 90 days pay per
  affected employee
• Unfair dismissal clams

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Is it fair ?

• Redundancy is one of the potentially fair reasons
  for dismissal.
• Employer must show that redundancy situation
  exists and that the dismissal of the employee is
  wholly or mainly attributable to that state of
  economic affairs.
• To be actually fair, the dismissal by reason of
  redundancy must be reasonable in all the
  circumstances of the case having regard to the
  size and administrative resources of the employer
  and the equity and substantial merits of the
  case.

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Was it a redundancy dismissal?

• Generally, employment tribunals will not second
  guess employers business decisions for making
  the redundancies. But they will look carefully
  at the genuineness of a redundancy programme
  involving just one person (or a small number of
  people) where the individual is claiming that
  there is an ulterior motive for dismissing him.
• If not within statutory definition, then not a
  redundancy dismissal.

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Was dismissal reasonable in all the circumstances
of the case?

• Fair Redundancy Selection
• Fair Procedure

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Fair redundancy selection

• Fairly free hand in choosing selection criteria
  provided the redundancy pool is fair and the
  selection criteria are
• Reasonably objective
• Not in breach of an agreed procedure
• Fairly applied
• Common criteria include one, or a combination of
  any, of the following
• Skill and experience for the remaining jobs
• Key skills
• Performance records
• Length of absence/absenteeism
• Disciplinary Record
• LIFO ???

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Pool for selection

• Adherence to agreed procedure or established
  custom practice would be starting point but can
  depart if employer can justify doing so for good
  operational reasons.
• Choice of pool should be reasonable having regard
  to all the circumstances.
• Tribunal will not second guess employers choice
  of pool, unless it produces inherently unfair
  results or it looks arbitrary.

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Application of criteria

• Apply the criteria fairly
• Check accuracy of factual details
• If absence is a factor, weigh reasons for absence
• Avoid discrimination in choice or application of
  selection criteria
• Watch for automatically unfair criteria
• E.g Union membership pregnancy or maternity,
  assertion of statutory rights, certain health
  safety matters, previous grievance, part-timers.

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Fair redundancy procedure

• To provide as much advance warning of the
  impending redundancy as is reasonably practicable
  in the circumstances
• To consult with the affected employees
• To look for and, if applicable, offer any
  suitable available vacancies to the otherwise
  redundant employees
• NB special protection for employees on maternity
  leave

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The Statutory Dismissal Procedure

• Until 6th April 2009 an employer was required to
• Write to the employee to invite him to a meeting
  and advising him that the employer is
  contemplating his dismissal for redundancy.
• Hold the meeting to discuss the proposed
  redundancy, at which the employee is given the
  opportunity to explain why he should not be
  dismissed.
• Following the meeting advise employee of outcome
  of meeting and of the right to appeal.
• If employee appeals, hold an appeal meeting and
  advise him of final outcome after the appeal
  meeting.
• Failure to take any one of these steps rendered
  the dismissal unfair.

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Costs of redundancy

• Notice
• Statutory Redundancy Payments
• Contractual or enhanced redundancy payments
• Enhanced pension benefits/early retirement
• Risk of unfair dismissal claim
• Risk of discriminatory dismissal claim
• Management time
• Morale, productivity, wasted recruitment and
  training costs.
• Emotional impact
• Message to market ?

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One step ahead ?

• No substitute for good management
• Need a good flow of information
• Pro-active management of resources (including
  staff) to seek to avoid need for redundancies
• Serious consideration to alternatives to
  redundancy
• Engage with your staff share information, share
  the problem, share the pain, share the solution ?

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Contacts

• Edinburgh Office
• 1 Rutland Court
• Edinburgh
• EH3 8EY
• T 0131 270 7700
• F 0131 270 7788
• DX ED3
• Edinburgh
• www.andersonstrathern.co.uk

Glasgow Office 4 Blythswood Square Glasgow G2
4BG T 0141 242 6060 F 0141 221 4733 DX
GW157 Glasgow
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Edinburgh Chamber of Commerce

• Keeping you One Step Ahead

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Background

• As the recession hit we took action
• Added value to membership offering
• Re-structure of our approach to membership
• Recession support package for members
• One Step Ahead campaign

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One Step Ahead

• Launched on 19 March 2009
• Sign-post leaflet website www.edinburghchamber.
  co.uk/onestepahead
• A range of free and discounted
• offer to members
• Interactive platform for members
• offers

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Campaign to date

• 30 offers, services and initiatives to date
• Almost 700 members have made use of the campaign
  since launch
• 10 providers from within our membership

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One Step Ahead initiatives include

• ECBE Edinburgh Chamber Business Exchange free
  for members!
• Free listing on Council procurement site
• Free IT security consultations
• Free IT support
• Free sales development consultations
• 3-4-2 on adverts in the Chamber e-newsletters
• Spire private healthcare offer to members
• Free design consultation with qualified architect
• Free listing in online business directory -
  Digital Directory

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Latest OSA news

• Chamber events advertising offers on ECBE
• Free graduate recruit-
• ment site
• Launch of brand new
• meanbusiness.tv
• Economic Action
• Resilience Network
• (EARN)

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How to get involved

• Go to www.edinburghchamber.co.uk/onestepahead
• Alternatively contact our Customer Services Team
  
• 0844 736 2992
• customerservices_at_edinburghchamber.co.uk

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Business Solutions

• Bryan Leslie
• Chamber Business Solutions
• gt A member organisation
• Value-added support
• What Ill cover
• 1) The wider support available
• 2) Solutions to key issues
• 3) Opportunity for you
• Contact Information

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Edinburgh Chamber of Commerce

• Track record of providing support to business
• An extensive range of business and economic
  development services
• From start-up to maturity
• From small lifestyle businesses to high growth
  companies
• One-stop-shop for all your business needs
• Many free services - some paid for

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Edinburgh Chamber of Commerce

• The Free Services
• Business Gateway
• over 1,480 start ups last year
• High growth pipeline businesses
• Access to funding
• Business Mentoring
• Executive Skillsbank
• Specialist mentoring support for third sector
  organisations
• Signposting

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Chamber Business Solutions

• Solutions for your business
• Help you need, when you need it
• Customer Services Team
• Business Health Check
• Comprehensive range of business development
  services
• Delivery in-house or through trusted associates
• Opportunity for members to become preferred
  suppliers

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Chamber Business Solutions

• Consultancy support
• Organisational review
• Strategic development business planning
• Market research feasibility studies
• Marketing strategies plans
• Promotional plans campaigns
• Sales business development
• Financial management planning
• Fundraising strategies
• Change management
• HR management development
• Facilitation

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Chamber Business Solutions

• Business Training
• Open course programme
• keeping those customers,
• time is money,
• dealing with difficult people,
• project management,
• cold calling,
• recruitment and selection
• Bespoke training solutions
• management and leadership,
• team building
• selling skills,
• finance for non-financial managers
• Introducing CPD, distance learning and accredited
  training courses

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Chamber Business Solutions

• Market intelligence
• Translation services
• Tender alert service
• International Trade
• Training
• Research
• Consultancy
• Technical support
• Contacts, etc

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Chamber Business Solutions

• Position Yourself as The Obvious Expert?
• We want a range of options for our solutions
• From free stuff to paid for consulting and
  training
• Free stuff includes tip sheets, audio downloads,
  etc
• I need experts to help create them
• Generally will be an interviews
• Questions agreed in advance
• Promotion for your business
• Recorded and made available for download
• F2F, 11 telephone or via a group telephone call
• Interested? Drop me an email
• bryan.leslie_at_edinburghchamber.co.uk

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Key Contacts

• Bryan Leslie, Chamber Business Solutions Manager
• bryan.leslie_at_edinburghchamber.co.uk
• 0131 221 3173
• Fraser Lusty, Business Mentoring Manager
• fraser.lusty_at_edinburghchamber.co.uk
• 0131 221 3172
• Ian McGuff, International Trade Manager
• ian.mcguff_at_edinburghchamber.co.uk
• 01506 468916
• Customer Services
• info_at_chamberbusinesssolutions.co.uk
• 0844 736 2992