31st March 2020

Q&A with John Playfair

31st March 2020

How would you define your role?

Business advisory. We think of ourselves as the GP of the SME business world; we can advise on most commercial issues, and have an established range of specialist expertise to call on when needed.  We work alongside businesses to provide comprehensive financial management services and business strategy, often helping to turn around businesses in severe financial difficulty.

Although we are accountants, we are not a traditional accounting firm – we choose to work with a smaller number of clients and think of the relationship as a partnership, working closely with the business owner on a regular basis to help protect and develop their business.

Given the unprecedented and extremely challenging situation we are all currently facing, what would your advice be to small businesses? What practical steps can they take to ensure their business is protected?

Well, yes… life changed last week and the situation continues to develop. With the exception of most professional service firms, there are very few businesses that will be able to continue operating normally, and some will have to close completely. In the SME market, many businesses will not have strong balance sheets to fall back on, so they will need help, and quickly, to avoid large-scale business failures.

Cash is always king – but in today’s market; even more so. Business owners will probably have to shelve some strategic plans and concentrate on the operational side of the business to protect their cashflow.

They should review all aspects of their income and costs and see what might be affected and how they can mitigate any impact. They may then need to approach their bank for assistance. If they do, they will need good financial information… and that is not always available in SME businesses!

So my advice would be to plan, prepare, be vigilant and communicate with all stakeholders in the business.

The support measures the Government are putting in place are good, the loan scheme and grants that are being made available, along with the abolishment of business rates will certainly help, as well as HMRC currently being very supportive, but ultimately I believe it will be businesses that find the answers, not the Government.

A month or two ago, how would you have described the market? The uncertainty over Brexit and the political situation was resolved to a certain extent, had things starting to feel more stable?

Yes, at the beginning of the year there was a feeling that we were coming into a bright new decade. We certainly didn’t see the signs of recession that some economists were reporting, we saw quite a lot of encouraging signs.

We have clients across most sectors – retail, construction, services, manufacturing, law firms – and they all have their different challenges, but nobody was saying the economy was down. Our clients are all owner managed businesses so the decision-making process is short, meaning they can move quite quickly and by their own actions they can make the best of a particular situation.

Current situation aside, what’s the best way for lenders to serve the SME market?

Whereas once the banks were the only lenders, they now seem to be more reluctant to lend to SMEs, so the best way for new lenders to support the SME community is simply by making funds available efficiently and at a reasonable rate.

One analogy would be to look at how the airlines have developed – some that began cheap and cheerful actually started a whole new way of working which has now become a benchmark for the industry, I would think something similar is also likely to happen in the financial market.

With new funding technology and platforms available, will there continue to be a place for the broker role?

There will always be a place for the broker, we all have our various areas of expertise and we welcome the new technology. Finding suitable funding for a business can mean a lot of time spent putting different business cases to individual lenders, because they all have their different criteria and application processes. By working with a broker or financial advisor, the process is faster and more efficient.

Connect with John on LinkedIn or visit Playfair Partnerships