Tailored for growth

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					Autumn 2006

The magazine for business finance professionals

Tailored for
Essential start-up products
made to measure

Clients with
HR problems?
Getting up to speed with
Mentor Services

Advisor Award Winner
Hot tips and hints from this
issue’s winner

Inside this issue:
Facts and figures – expert advice – spotlight on agriculture
        Key contacts                                                                                               National Agriculture Manager:
                                                                                                                   Ian Burrow 01332 222888

get in touch
                                                                                                                   National Franchise Manager:
                                                                                                                   Mark Scott 07801 034063
                                                                                                                   National Healthcare Manager:
                                                                                                                   Dave Jones 07771 944806
                                                                                                                   National Rural Mortgage Manager (FAF)
                                                                                                                   Philip Coysh 07850 242805

                                                                                                      Gwynn Evans
                                                                                                      07747 486909
                                                                                                      PA: Linda Morris

   Sue Douthwaite                                                   NORTH WEST & SCOTLAND
   07769 960755                                                                                                         Alison Turton
   PA: Angela Fry                                                                                                       0121 566 0519
                                                                                                                        PA: Louise Redfern

                                                                                                                                 Martin Bugg
                                                                                                                                 020 8236 8056
                                                                                              NORTH EAST                         PA: Mick Enright
                      Denise Aitchison
                      07768 557562                                                                                                    Richard Rudman
                      PA: Lara Brotherhood                                                                                            020 8236 8190
                                                                                                                                      PA: Nita Hansraj

                                                                        LIVERPOOL &             EAST MIDLANDS
                                                                        NORTH WALES

                                                                                                                                      GREATER LONDON NORTH
        Dave Wilson                                                                                                                   Peter Hale
                                                                                                                EAST ANGLIA & ESSEX
        0121 566 0520                                                                                                                 020 8236 8135
        PA: Gemma Dixon                                                BIRMINGHAM &         CENTRAL ENGLAND                           PA: Katrina Crampton
                                                                        SOUTH WALES

                                                                                                                                      CENTRAL LONDON

                  Mike Lang                                                                                                           Mark Dowden
                                                                                        SOUTH CENTRAL         LONDON
                                                                                                                         SOUTH        020 8253 5495
                  0117 974 6075                                                                                           EAST
                  PA: Vicky Ellis                                                                                                     PA: Sandra Smithson
                                                                  SOUTH WEST
                                                                                                                                      GREATER LONDON SOUTH

                                                                                                                                      Glen Wilson
                                                                  Mike Donnachie                  Simon Teague                        020 8256 5532
                                                                  0117 974 6059                   01732 521529                        PA: Beverley Rudd
                                                                  PA: Claire Lewis                PA: Sally Joachim

National Westminster Bank Plc, registered in England no. 929027
Registered office: 135 Bishopsgate, London EC2M 3UR

        Key contacts                                                                                               National Agriculture Manager:
                                                                                                                   Ian Burrow 01332 222888

get in touch
                                                                                                                   National Franchise Manager:
                                                                                                                   Mark Scott 07801 034063
                                                                                                                   National Healthcare Manager:
                                                                                                                   Dave Jones 07771 944806
                                                                                                                   National Rural Mortgage Manager (FAF)
                                                                                                                   Philip Coysh 07850 242805

                                                                                                      Lee Crook
                                                                                                      07799 868125

   David Reed                                                       NORTH WEST & SCOTLAND
   07713 988313                                                                                                         Nigel Winkett
   david.reed@rbs.co.uk                                                                                                 07714 447120

                                                                                                                                 Liz Giles
                                                                                                                                 07876 390511
                                                                                              NORTH EAST                         liz.giles@natwest.com
                      Gault Picken
                      07770 990054
                                                                                                                                       Nick Winter
                                                                                                                                       07799 868037
                                                                        LIVERPOOL &             EAST MIDLANDS                          nick.winter@natwest.com
                                                                        NORTH WALES

         Trevor Clarke
                                                                                                                EAST ANGLIA & ESSEX
         07799 868303
                                                                                                                                      CENTRAL LONDON
         trevor.clarke@natwest.com                                     BIRMINGHAM &         CENTRAL ENGLAND
                                                                        SOUTH WALES                                                   Tony Clowes
                                                                                                                                      07766 726787
                  Trevor Perry                                                                                LONDON
                                                                                        SOUTH CENTRAL                    SOUTH
                  07770 990056                                                                                            EAST        OUTER LONDON SOUTH

                  trevor.perry@natwest.com                                                                                            Wayne Parker
                                                                  SOUTH WEST                                                          07799 868473

                                                                           Steve Murcer                       Alan Collett
                                                                           07885 274167                       07799 868458
                                                                           steve.murcer@natwest.com           alan.collett@natwest.com

National Westminster Bank Plc, registered in England no. 929027
Registered office: 135 Bishopsgate, London EC2M 3UR

                                              04 NEWS                                                                   04 News
                                              Online banking gets bigger, internet
                                              set to boost retail sales over the
Welcome to Advisor, the                       festive season, and more…
magazine helping you to strike
better deals and win more clients.            05 AWARD WINNER
                                              After 30 years at Barclays, David
In this issue we’re focusing on
                                              Wright’s plans for a quiet retirement
start-ups. Last year saw yet
another increase in new business              were derailed when he was invited to
launches (see Facts and Figures               become a financial advisor. Now
on page 10), and in our Briefing              successfully flying solo, he reveals
(page 6) we look at financial                 the secret of his success.
packages that can help to see
them through the first year and
beyond – turning your start-up
clients into regular business!                                                        08 EXPERT ADVICE
                                                                                      Want to know how to effectively gauge
Former banker David Wright is
                                                                                      a client’s potential? Our experts deal
our Advisor Award Winner. Read
his useful hints and tips from life                                                   with this query and more financial
at the sharp end on page 5.                                                           posers. Plus there’s our 60-second
Plus our experts answer your                                                          guide to how your clients can benefit
queries on page 8, and Sector                                                         from Mentor Services.
Watch puts Agriculture under
the spotlight.
                                                                                      10 FACTS AND FIGURES
Finally, your feedback on Advisor                                                     Are interests rates going to rise further?;
is vital, so please complete our                                                      More recruiting and more vacancies
Reader Survey for your chance
                                                                                      filled; What drives small business
to win a Samsung DigiMax V6
digital camera.                                                                       owners?; Start-ups on the increase;
                                                                                      Agriculture under the microscope.
                                               10 Focusing on agriculture

                                              06 BRIEFING
                                              Lending for start-ups
                                              The number of new businesses
Pete Ferns                                    starting up in the UK rose again
Director of Business Banking                  last year, but 1 in 10 are failing.
                                              Here we look at how you can
NatWest is committed to helping               offer your start-up clients specially
independent financial advisors and brokers.
                                              tailored financial packages that will
If you want details on NatWest’s services
or want to subscribe to Advisor, email        help to make them more durable,
business.development@natwest.com              so that they stand a better
                                              chance of making it through their

advisor                                       first year and beyond – which is
                                              good news for your business, too!
                                                                                                         06 Lending for start-ups

Cover picture: Getty Images
                                                                                                                     ADVISOR 03

                  Business online                                   Internet holds key to
                  banking on the rise                               more Christmas sales                                               NEWS IN BRIEF
                                                                                                                                       A woman’s world?
                                                                    Retail businesses hoping to benefit from a
                                                                    busy Christmas season would be advised                             Flexible working could soon make
                                                                    to boost their internet campaigns, as online                       the UK a ‘women’s economy’,
                                                                    analysts Hitwise UK predicts further growth                        according to a new report.
                                                                    in web-based sales this year.                                      The BT research suggests that
                                                                      The company forecasts an 8% growth in                            women over 50 will be recognised
                                                                    visits to retailers’ websites compared to last                     as the best managers due to their
Picture: istock

                                                                    Christmas, with online sales for December                          recognition of flexible working.
                                                                    2006 likely to be 20% higher than last year.
                                                                      Hitwise UK’s predictions are based on
                                                                    two years’ data from more than 8 million                           Firms keeping it local
                  A growing number of businesses are going          UK internet users.
                  online to manage their company’s finances,                                                                           Nearly half of UK businesses call
                  it’s been revealed.                                                                                                  themselves ‘local’ despite the rise of
                    The British Bankers Association (BBA) said                                                                         the globalised marketplace, a study
                  that 42% of firms now use internet banking.                                                                          has revealed. Despite rising
                    Researchers also found that during                                                                                 international trade, 43% of companies
                  the last 12 months, nearly 547,000                                                                                   said they were focussed on their local
                  small businesses have established new                                                                                area. Report authors Microsoft called
                  banking relationships.                                                                                               the results “worrying”.
                                                                                                                     Picture: istock

                    The BBA also said lending to small
                  companies has increased by 10% over the
                  year, while overdraft lending is also up by 8%.                                                                      Business plans snubbed
                                                                                                                                       Many entrepreneurs are failing to attract
                                                                                                                                       funding by believing they do not need a
                                                                                                                                       business plan, according to Business
                                                                                                                                       Link for London.The organisation said
                    The benefit of a NatWest business account                                                                          that 68% of budding business bosses
                                                                                                                                       in London felt they didn’t need a plan,
                                                                    G Exclusive remortgage rates
                    N    atWest has released a range of
                         services and benefits aimed at
                    supporting businesses who open a new
                                                                      As well as the financial benefits,
                                                                    NatWest is offering the services of a
                                                                                                                                       fuelling an 80% failure rate when it
                                                                                                                                       comes to securing finance.

                    NatWest business account. It offers more        dedicated Business Manager, who can
                    than £1,000 worth of incentives, including      provide advice and guidance to help                                Striking a balancing act
                    a variety of banking, marketing and             ensure your clients’ success.
                    insurance discounts including:                    In addition, all NatWest’s small                                 Surprisingly, most business bosses
                    G Free mobile phone insurance for 12            business customers can have a direct                               aren’t all workaholics, according to
                    months on two handsets                          line to their Business Manager, as well                            new research by business software
                    G Free marketing support for 2 months           as 24/7 support from our Advisors.                                 company MYOB. The survey
                    G Free business card for 12 months                To take advantage of these offers, clients                       found that 6 in 10 bosses defined
                    G Free life cover for 3 months                  can either visit any NatWest branch, or talk                       success as a balance between
                    G Up to 25% discount on insurance               to a Customer Advisor on 0800 282 700.                             family and career.

                  04 ADVISOR                                                                                                                                     www.natwest.com

                                                                                                                                     D WIN

                         It’s vital to get to


                         know the banks

                                                                                 R AW
                                                                       VI               A                                      D WINN


Former banker David Wright is this issue's Advisor Award Winner. He’s shown real


aptitude and appetite for finding creative solutions A Wcomplex deals and introduces
                                                S O R to
                                                                       A          SO
clients’ cases in a way banks like. Here he offers key insights into handling transactions.
                                                                           R AW

                     R AW
           VI               A


                                                Where do you find your clients?             need to find an individual in each bank you
  VITAL STATISTICS                                                                 WINNER deal with. If you stick with them for
                                                I have four main sources of introductions:  can

  NAME: David Wright

          V                                     a mortgage broker, an insurance broker, a   deals, the more helpful they’ll be in future.

  AGE: 53I S
              O R A WA
  PREVIOUS JOB: Barclays Bank – 30 years
                                                businessman with his own property           The other crucial thing is to line yourself up
  HOME: Fairlight, East Sussex                  portfolio and individual recommendations.   with introducers. Also, I use banks and
  HOBBIES: Playing golf, watching rugby                                                     building societies that are more prepared
  and cricket                                   Where’s the best place to advertise?                      AWARD
                                                                                            to lend and will offer stronger repayment
  LAST BOOK READ: James Clavell’s Shogun        I don’t advertise and don’t have a website. terms. Finally, try to charge fees when
  LAST FILM WATCHED: Star Wars Episode
                                                There’s a worry people who respond to       you produce the offer letter. Most of
  III: Revenge of the Sith                      ads may have been declined elsewhere.       the people I deal with accept this as
  CONTACT: 07977 572 829
                                                You could be dealing with a county court    standard procedure.
                                                judgment or an ex-bankrupt.
                                                                                                    What’s happening in your sector?
What does your business do?                     What’s the secret behind your success?              London seems very buoyant. Property
I arrange finance for buyers of businesses      Having spent 30 years in banking, I tend to         prices are still rising rapidly, but residential
or properties. I also help to arrange           know whether the bank will lend, what               buy-to-let is not really worth it as rental
associated spin-offs, such as life insurance    amount and the fees and charges. Clients            prices remain static, so the yields are
and business insurance through contacts.        trust that if I say I can’t do it, I can’t do it.   lower. I also read a lot that local shops are
                                                                                                    under pressure from supermarkets, but
How did you start?                              What are the pitfalls to avoid?                     those I deal with still feel they can make
I planned to retire, but was offered a job. I   Never talk down to people, use jargon or            money. London is built up heavily in some
took it, but felt the way they handled          try to confuse them.                                areas, so retail sites are hard to secure.
clients was unethical, so set out alone.
                                                What’s your most satisfying deal?
Where are you now?                              The Brick Lane office block refinancing. It           WHO’S NEXT?
It’s just me. My turnover’s under £100,000,     was legally complex as there were lots of             Have you got what it takes to be
but the workload’s about right.                 tenants. It took three months, but we                 an Advisor Award Winner? If you
                                                eventually got the money released.                    think you have, simply email your
Who are your clients?                                                                                 details and a brief summary of
Mainly those buying a business for the first    What advice would you give someone                    your achievements to:
time. I also get involved in some big deals     starting out?                                         business.development@natwest.com
and recently refinanced an office building      It’s key to understand what the banks will
just off Brick Lane for £4m.                    offer and their sector preferences. You

www.natwest.com                                                                                                                       ADVISOR 05
                      ADVISOR BRIEFING

                      Lending to help                                                                               1 START-UP ACCOUNT OFFER

                                                                                                                    NatWest has put together a special

                                                                                                                    start-up business account with a
                                                                                                                    wide range of benefits and services
                                                                                                                    to help your clients get their business
                                                                                                                    up and running while saving them
                                                                                                                    time and money. The details of the
                      Successful new companies make regular clients and NatWest’s                                   account includes:
                      suite of start-up packages are aimed at helping businesses to                                 G Free banking for up to 18 months
                                                                                                                    G Discounted account fees for a
                      get through those difficult early years
                                                                                                                    further 6 months
                                                                                                                    G A choice of a local Business
                                                                                                                    Manager and/or telephone-based
                                                                                                                    business banking
                                                                                                                    G A NatWest Business Card
                                                                                                                    G Business deposit accounts
                                                                                                                    G Free Business Advisors over the
                                                                                                                    phone (Businessline) and NatWest
                                                                                                                    OnLine Banking
                                                                                                                    G A free Business Review, whether
                                                                                                                    your clients bank with NatWest or not
                                                                                                                    G 12 months free use of the
                                                                                                                    award winning MyBusiness
Picture: Masterfile

                                                                                                                    Essentials software.
                                                                                                                       Account users also receive a copy
                                                                                                                    of the NatWest Business Planner
                                                                                                                    software which won the award for
                              very year more than 400,000             The three-year survival rate has also         Best Business to Business Service at

                      E       businesses start trading in England
                              and Wales and, at some point,
                      each one will need extra financing,
                                                                      evened out at just below 70%, decreasing
                                                                      slightly for businesses registering between
                                                                      2000 and 2001 (www.sbs.gov.uk/survival).
                                                                                                                    the 2005 Revolution Awards. This
                                                                                                                    software has been designed to take
                                                                                                                    the hassle out of planning. Users can
                      whether it’s to buy new equipment, raw          Businesses still trading beyond their third   do a quick reality check on their
                      materials or to finance growth. The             year tend to survive for the long-term.       business idea, focus on personal
                      flipside is that, unfortunately, an                To help make start-ups robust enough       and business goals, and manage
                      estimated 330,000 fail. As there were an        to last – which means a client that keeps     their accounts, appointments,
                      estimated 4.3 million business enterprises      on coming back for advice – NatWest has       jobs, invoices and customer and
                      in the UK at the start of 2005, according       developed a suite of products and services    supplier records.
                      to the Small Business Service – an              to help businesses get started and obtain        In addition NatWest also offers
                      increase of 59,000 (1.4%) on the                the funding they need. There are three        every start-up access to the NatWest
                      previous year – this means that around          parts to NatWest’s start-up offering:         online library of Business Guides for
                      1 in 10 businesses fail every year.                                                           expert tips and guidance.
                          Ideally, you want the companies you                                                          To take advantage of the Start-up
                      advise to be there year after year. The good      1 START-UP ACCOUNT OFFER                    offers, your clients only need to pop
                      news is that, recently, the one-year survival     2 THE FLEXIBLE BUSINESS LOAN                into any NatWest branch, or talk to a
                      rate (those businesses trading beyond their       3 NATWEST TRAINING COURSE                   Customer Advisor on 0800 282 700.
                      first year) has levelled off at around 92%.

                      06 ADVISOR                                                                                                         www.natwest.com

   From starting out to building             and when they have surplus cash.             quarterly payments, depending on
   a business – financing                    G  Take a payment holiday for the            their cash flow.
   through the stages                        first few months or just pay the             G Make lower payments at the start
                                             interest. Then the repayments simply         of the loan, then increase them later.
   This borrowing option lives up to         rise to cover what they would have               The real beauty of the FBL for an
   its name. It allows businesses to         paid over the holiday period.                advisor is that it fits practically any
   borrow money and then pay back            G Increase their payments whenever           business and any eventuality you’re
   on terms that are convenient for          it suits them.                               likely to come across. For example,
   them. It not only offers more             G Withdraw money from any extra              if your client wants a loan that
   choice right from the start, but          loan payments they have made                 starts with low payments while they
   also gives your clients further           should they need money quickly.              find their feet, or needs to take a
   options as time goes by, like pay         G Withdraw the loan in stages and            payment holiday because the new
   nothing or pay less. Essentially,         pay less interest overall – useful if they   equipment they’ve bought won’t
   the FBL allows businesses to:             don’t need the full amount all at once.      start producing revenue for a few
   G Make lump sum payments as               G Switch to weekly, monthly or               months, then the options are there.
                                                                                              As Mark Lucas, NatWest’s FBL
                                                                                          Product Manager, says: “The FBL
                                                                                          will fit any client – it can be as easy
                                                                                          or complex as the business wants.
                                                                                          There’s an option to suit everyone.”
  Your start-up clients can also get free   demographics of the area,                         The rates charged for the loan are
  guidance on running a new business        including population, employment              also negotiable as is the loan period.
  through the NatWest Training Course.      levels, age profile, qualifications, a            “NatWest will lend money for
  It’s designed to help companies think     demographic review and business               periods up to 25 years, and the
  about the business sector they’re         rates, through to broadband                   loan amount really depends on the
  about to enter, as well as providing      connectivity. Plus there are details          business type,” explains Lucas.
  valuable marketing advice and tips.       of local support agencies.                    “What’s more, our Credit Team aims
      The course is entirely online and        Next, clients are sent one email           to turn around FBL requests in 24
  takes seven weeks, but users can          every day for the next week. The              hours, with draw down available as
  work their way through it at their own    daily emails are meant as a sense             soon as the security is in place.”
  pace and there are no tests at the        check and the content is aimed at a
  end of it.                                fairly high-level. They ask questions         YOUR HOME MAY BE
      To sign up for the course, all        like: “Have you looked at health and          REPOSSESSED IF YOU DO NOT
  businesses need to do is register in      safety issues,” and: “Have you                KEEP UP THE REPAYMENTS
  the Start-up section of natwest.com.      thought about where you’re opening            ON YOUR MORTGAGE.
  After this they’ll be sent two fact       your business.”
  sheets by email.                             After this the emails are weekly
      One is a business profile on their    and cover business in more detail.
  particular business type. This covers        Even after businesses have                 WHERE NEXT?
  details about the business, market        completed the course, they will               G For more information on NatWest’s
  trends, key start-up considerations,      continue to receive a monthly                 start-up packages, contact your local
  and gives sources of further              newsletter containing information             Business Manager – see page 2.
  information. The other sheet tells        and guidance that’s intended to help
  clients about their location. It covers   them as they get up and running.

www.natwest.com                                                                                                         ADVISOR 07

Put it to The Experts
From getting help assessing clients to the benefits of cutting out the middle man, our
team of experts provides advice and answers your professional queries

                                                                                            the aim of deciding if the business brings in
                         MEET THE EXPERTS                                                   revenue regularly. Have they put enough
                                                                                            aside to pay the bills? Will they be able to
                                                                                            cope with periods where revenue is slack?
                                                                                               Then there is security, and by this I
                    Keith Heron                                 Alastair Hutt               mean is the property being offered
                    National Association                        Head of Introducer          acceptable to the lender in terms of its
                    of Commercial Finance                       Development, NatWest        condition, location and of course its value?
                    Brokers (NACFB)                             Business Banking            Alastair Hutt adds: Although serviceability
                    www.nacfb.org                                                           is something that will have to be looked
                                                                                            into when assessing a business, and
                                                                                            Keith’s points are spot on, this is one of
                                                                                            the tasks you can leave to NatWest’s
                                                                                            Credit Team, as they can pick out this sort
START-UP HELP                                 RECOMMENDATION CRITERIA                       of detail pretty quickly.
I’m just starting out. Where can I get        What key features should I be looking
help assessing clients?                       for in a business before making a             GOING DIRECT
Keith Heron replies: My advice to             recommendation?                               Why should I deal with NatWest directly
anyone who is inexperienced in                Keith Heron replies: An experienced           rather than through an intermediary?
assessing clients is to establish a           broker will look at three aspects, which I    Alastair Hutt replies: When you’re
relationship with a specialist commercial     call ‘the three S’s’ – status, security and   experienced you should know enough to
finance broker.                               serviceability. Essentially you need to       find the best deals and spot the best
   In this set up you will be, effectively,   determine the status of the individual –      customers, so you can cut out the
the lead generator. The broker will           are they experienced in the business, do      middleman and go direct. It’s better for
provide you with back up when it comes                                                      your clients, as they get a faster response,
to gaining an understanding of the                                                          and you get more revenue as you don’t
client’s business needs, together with a
                                              “Experienced brokers                          have to split the fee. For example, say your
wide source of finance and a nose for            will look at three                         client owns personal property. If they have
how successful a business will be.            aspects of a business:                        around £300,000 equity, are looking to
   The advantage to you of building this                                                    get a loan of £490,000 to buy a freehold
kind of relationship is that you have          status, security and                         commercial unit worth £700,000 and
access to an experienced broker who               serviceability”                           want to loan the money over a period of
can quickly gauge the likelihood of a loan                                                  15 years, you will get the full introducer
being made. What’s more, over a period        they have a track record, is the business     payment of £2,450. So if you could refer
of time, you should be able to pick up        located in the right place?                   two similar clients a month to NatWest,
their skills at assessing whether a              Then in terms of serviceability, it’s a    you would increase your annual income
potential client is a good or bad risk.       question of looking at their funding with     by £58,800 a year.

08 ADVISOR                                                                                                            www.natwest.com
                                                  Get focused in 60 seconds
                                                  NATWEST MENTOR SERVICES

                                                                                                                                                        Picture: istock
                                                  NatWest’s Paul Whittaker explains the benefits

                                                  Q     What is Mentor Services?                 programme of training services. We often
                                                                                                 act as a second opinion for these

We want to be able to recommend
                                                  A     NatWest Mentor is the fastest-growing
                                                        employment law, health & safety and
                                                  tax consultancy in the UK. We help UK
                                                                                                 customers, helping in-house HR and
                                                                                                 health & safety generalists who need
                                                                                                 specialist advice on complex issues.
commercial mortgages but we’re not                businesses of all sizes achieve and maintain
sure when it’s appropriate and when
it’s not, are there any guidelines on
                                                  compliance and are unique in UK banking.
                                                                                                 Q      What sort of advice does
                                                                                                        Mentor offer?
buying versus renting?
Alastair Hutt replies: Buying isn’t for
everyone, but it does give a company
                                                  Q      Is Mentor intended to replace
                                                         a business’s in-house HR or
                                                  health & safety function?
                                                                                                 A     We offer advice on all UK employment
                                                                                                       law and health & safety issues. Plus
                                                                                                 our Health & Safety Crisis Management
greater freedom than renting property. In
general, the advantages to buying are:
G Fixed overheads – in years to come
                                                  A      That depends on the customer. In a
                                                         small business or start-up Mentor
                                                  can be used instead of a dedicated HR or
                                                                                                 Service gives our customers the help they
                                                                                                 need, when they need it most.

you can control your spending.
G The value of the premises may
                                                  Health & Safety Officer, or to formalise
                                                  employment law and health & safety             Q        Is commission to an Introducer paid
                                                                                                          for as long as the contract lasts?
increase – over time this can prove to be
a good capital investment.
G You could let the property in the future
                                                  systems as the business grows. For these
                                                  customers, we offer fully compliant
                                                  documentation and a Telephone Advice
                                                                                                 A        If an Introducer signs up a customer,
                                                                                                          they are rewarded with 10% of the
                                                                                                 first year sales value each year for the
– if your business plans change, the              Line staffed by employment law and health      initial three-year contract. Then, if the client
property could provide an alternative             & safety professionals. In addition, our       renews with us for another three-year term,
source of income.                                 optional insurance indemnity covers our        commission continues at 5% per year.
G It may be cheaper – to finance                  clients’ legal costs and expenses should
a mortgage may give a lower monthly
outlay than to rent a similar property in
                                                  they face a tribunal claim or prosecution
                                                  under health & safety legislation.*            Q     When do I receive the commission
the area you are considering.
   However there are also disadvantages
to buying a property, such as:
                                                     Larger businesses can subscribe to the
                                                  same service or we can audit and update
                                                  their existing systems. We also provide
                                                                                                 A     As soon as the customer has paid
                                                                                                       their third monthly payment, you’ll
                                                                                                 get 10% commission on the sale.
G It’s not so easy to move or give up the         one-off consultancy services and a                                        *Terms & conditions apply
premises when you want to – it may be
harder to react to changes in your
business because of the time it takes to sell.                                                   Brokers (NACFB) and the services it offers
G You need a substantial deposit –                WHERE NEXT?                                    visit: www.nacfb.org
commercial mortgages require larger               GFor more information about NatWest
down payments than residential                    Mentor Services visit: www.natwest-            G Got a professional query about any
property loans.                                   mentor.co.uk                                   aspect of the financial market?
G You have more responsibility for                                                               Then put it to the panel by emailing
the maintenance and security of                   G For more details about the National          business.development@natwest.com
the property.                                     Association of Commercial Finance
   In the end, it really depends on the client.

www.natwest.com                                                                                                                       ADVISOR 09

 THE ECONOMY                                  SECTOR WATCH:
 Are further interest rate
 increases on the horizon?
 The minutes from the September               Snapshot of a key sector for IFAs
 meeting of the MPC suggested that
 Committee members viewed the                 The agricultural sector is currently going
 August hike to 4.75% as having               through a period of change. The new
 reduced “the degree of monetary              Single Payment Scheme – which
 accommodation”, implying that a future       replaces 11 schemes, has decoupled
 rise will happen if the economic news        subsidies from production and is now
 suggested it was needed.                     based on the land farmed – is proving
     Since then inflation has risen faster    complex to administer.
 than expected and survey evidence                Three months after the date when the
 suggests that more businesses across         first payments were to be made, there
 all sectors and regions are passing          were still 11,200 farmers waiting for the
 cost pressures through price rises.          balance of their payments to be paid,
     This makes another hike to 5%,           while 200 were still to be paid anything.
 probably in November, very likely.           With £40m outstanding, this has
 Whether it goes further is harder to call.   obviously affected farmers cashflow.
     The biggest worry for the Bank of            The hot weather this year has also
 England will come if businesses not          had a major affect. Dairy farmers are
 only pass on the price rises, but also       suffering most, as the summer hasn’t
 share the resultant profits with their       produced enough grass for the cows,
                                                                                            Picture: Alamy
 workers in wage increases. Some 60%          and farmers are already feeding their
 of pay bargains are struck in the first      cattle winter grazing. Arable farmers         reflected in supermarket chains
 part of the year, just when most             are likewise affected by the changing         purchasing. For example, Booths in the
 economists expect inflation to peak.         climatic conditions.                          North West ensures that 25% of its stock
 The peak will be at nearly 3%, which is          One of the fastest growing agricultural   is locally sourced, and Waitrose will
 the upper limit of the MPC’s target level.   sectors is organic produce, and it is         choose a local source if it exists.
     It may be this, therefore, that takes    expected to continue growing.                     The other major trend is diversification.
 rates up again early to pre-empt the         However, there is increased competition       As a result of competition from Europe
 impact of wage settlements. But that         from farmers in Europe                                       and the rest of the world,
 could feed the beast if negotiators          where organic                                                more and more farmers are
 want income compensation for rising          regulations are less strict
                                                                              Farmers are                  diversifying into different
 mortgage costs. Better perhaps to            than in the UK. But the         diversifying                 areas and are opening
 wait and see – and if they do they
 might spot a saviour on the horizon.
                                              complementary ‘food
                                              miles’ issue may negate
                                                                             into different                new enterprises, such
                                                                                                           as maize mazes and
     Petrol prices at the pump react          this competition, as             areas and                   converting barns or
 quickly to oil prices, which at the time     consumers start to search      opening new                   buildings into conference
 of writing have dropped nearly 25%           out produce that is locally                                  and wedding venues and
 since the August rate hike. Wholesale        produced rather than            enterprises                  small boutique hotels.
 gas prices take longer and should filter     imported or driven
 into lower household bills next Spring.      miles and miles.                              G For more information email
 What an unlikely saviour oil may be!             This is also being                        agriculture@natwest.com

10 ADVISOR                                                                                                           www.natwest.com
                                                                                      WHAT’S MY MOTIVATION?
  More recruiting, more vacancies filled                                              Small business owners are not all driven
  A new report from Jobcentre Plus             559,000 in 2004. Small businesses      by the classic desire to make money,
  shows that over a quarter of British         were particularly active with over     according the latest NatWest/SERTeam
  businesses were looking to hire new          half (56%) recruiting or trying to     Quarterly Survey of Small Business.
  faces in 2005. Last year saw 27% of          recruit externally in 2005, up 4% on   Only 2%, for instance, are mainly financially
  businesses (586,000 establishments)          the previous year.                     motivated and have the aim of expanding
  actively recruiting new staff, up from         More vacancies are also being        their business significantly over the
                                               successfully filled across the         next three years.
     Sector                % of vacancies
                                               country – 88% in 2005 compared to         The group of micro-firms in which the
     Retail                            16%
                                               86% in 2004. Despite a marginal        proprietor or partners work without
     Hospitality                       14%
                                               drop in the overall number of jobs     employees are mainly motivated by
     Public Sector                     11%
                                               available throughout the UK, in        independence and do not aim to grow,
     Healthcare                        12%
                                               some regions the volume of             but these only account for about 3% of
     Manufacturing                     10%
                                               vacancies has grown considerably.      small firm owners in the survey.
     Construction                      3%
                                               For example, the total number of          Other motivations include sheer
     Call Centres                      4%
                                               vacancies is up 25% in Scotland        enjoyment, as well as the desire to fulfill
     Transport                         3%
                                               and 20% in the South West.             a market need which otherwise would
  Source: Jobcentre Plus
                                                                                      not be satisfied. The majority of firms
                                                                                      with employees aim for their business to
                                                                                      expand over the next three years. Those
  Rise in start-ups hits new high                                                     which aim to grow their companies
                                                                                      significantly mainly describe themselves as
  The Small Business Survey (SBS) SME Statistics 2005 shows a rise in                 entrepreneurs, rate their businesses as
  new companies starting out. The start of 2005 saw 59,000 more start-ups             entrepreneurial and almost all have made
  than 2004 – a rise of 1.4%.                                                         major innovations over the past year.
     The total number of companies rose by 61,000 (5.9%) during 2004 to
  1.1 million. This is the eighth successive year that companies have increased          What drives small business owners?
  in number.
     The number of sole proprietorships has changed little, up just 0.8% to
  2.7 million, the third successive annual rise. Meanwhile, the number of
  partnerships has gone down by 4.4% to 520,000.

    Percentage businesses started per sector                  2005 %     2004 %

    Business & Financial Services                              27.76       28.51

    Motor Trades, Wholesale & Retail                           17.07       16.48
                                                                                      Source: NatWest/SERTeam Quarterly Survey of Small Business
    Construction                                               13.73       12.43

    Other Services                                             12.31       15.32

    Hotels & Catering                                           7.57        7.53
                                                                                         WHERE NEXT?
    Property Services                                           5.95        5.82
                                                                                         G For help and advice on
    Production                                                  5.85        5.60
                                                                                         economic trends and how they
    Transport, Post & Telecoms                                  4.51        3.76         could affect your business, contact
    Health, Education & Social Work                             3.37        2.98         your local Business Manager at
    Agriculture                                                 1.88        1.50         business.development@natwest.com

www.natwest.com                                                                                                               ADVISOR 11