Banks handed stark warning by leading North West businessman

Barriers to Growth

Traditional financial institutions and banks are facing a bleak future according to one leading North West businessman.

Neil Pickstone, the co-founder of fast growing software developer Volcanic, was speaking at a roundtable organised by Manchester based law firm Freeths.

The roundtable, held in partnership with TheBusinessDesk.Com, tackled the issues facing businesses.

The roundtable was entitled Barriers to Growth and involved business leaders from a range of different sectors including health, construction and technology.

 

And the subjects tackled in the discussion ranged from the importance of accessing funding to how to attract and retain the very best staff.

The first subject on the table was the importance of funding when it comes to growing and developing a business.

And Neil Pickstone was scathing in his assessment of the traditional financial institutions.

He said: “The banks don’t do anything, if you are a small business dealing with cash they don’t do anything.

“If you are a business like ours, a digital business that exists in somebody’s imagination they don’t do anything.”

He then went on to talk about how the emergence of fintech will have a huge impact on the way financial institutions operate.

He said: “One of the things we learnt about the Stock Exchange is the Stock Exchange doesn’t realise it is dying.

“Fintech is no longer just a sexy word, it is a reality and it is going to continue. Lending is going to be swapped to this fintech place and the banks just don’t realise they are dead.”

Ged Rooney is a director of Bardsley Construction Group.

 

Ged Rooney

He spoke about the impact funding is having on the construction sector in Manchester and the North West.

He said: “We are very much about external funding and the barriers to growth are very much about the funding that is supplied to our clients.

“What we have got at the moment is a lot of institutional investors flooding the market, at the moment it is great because things are going well and the economy is in good shape.

“At the moment we are seeing a lot of Far Eastern money coming into the market. Funding is available, it is just where it comes from.

“There is money because we are growing. It is when the economy slows down when you get the problem.”

David Barfield, from Workspace Design and Build, was also critical of the banks.

He said: “For years you couldn’t build a thing, now the biggest problem we have with financial institutions is the speed of response. At the moment they are a necessary evil that we have to deal with.”

 

Jason Iftakhar, who runs Swifty Scooters with his wife, said he struggled to expand his business without backing.

He said: “Our ambition was to launch a brand we could control in every way. I made the first 25 bikes in a workshop and sold them for £5,000, that was great.

Swifty Scooters to export to US

“We got an order for 200 for a distributor in Singapore, that was great. It all looked really rosy until we came to trying to work out how we were going to do that.

“It was a battle for two or three years to find some kind of finance. It takes a lot of time to sort out all the paperwork. Our only investment has come from overseas, I am really sad we couldn’t do it in the UK.

“Finance is a huge part of trying to make a business work, it is a headache. I am very pleased that the Business Growth Hub has been able to help us.”

 

Debbie Parker, is the operations director at Revive Dental Care. She spoke about the problems facing businesses who work with the NHS.

She said: “We have tender documents in which we have to have an answer for everything, but they never come in and audit afterwards which is ludicrous.”

Janine Smith, from the GC Business Growth Hub, agreed.

Janine Smith

She said: “We are in the process of rebidding for work and it is a six month process, we are audited to death.

“When you are operating on contracts, it can be six months before you are paid. Cashflow for us is a constant battle to make sure everything adds up. It is a massive balancing act.

David Barfield had a very different view on the issue of working on public schemes.

He said: “Government contracts are good for us, once you have spent the time and investment and once we have been through the process payment is 14 days.”

The discussion then moved on to the importance of getting advice and support from people outside the business.

Rachel Davenport

Rachel Davenport is a director with Alphabiolabs, a firm which specialises in drug and alcohol testing in the workplace.

The Warrington based company also carries out paternity tests for the Jeremy Kyle show.

She said: “In early days we got a lot of advice and support, some of it was good but what we found is that because our business is so niche it can be very difficult.”

 

Jason Iftakhar added: “I would be a foolish owner manager if thought I knew it all, there are holes to fill in my skillset.

“It is very refreshing to have impartial advice, we have had fantastic advice. It is good to have someone who you know doesn’t have an agenda but is just there to help.”

Alan White is a director with the Translation People, a firm which supplies translators.

He said: “We have had a few different people who have come in and it has helped. You take the advice that comes in but then you put your own spin on it. You take the best bits and then see how it applies to your business.”

The discussion then moved on to the importance of recruiting the right calibre of staff to help grow a business.

Neil Pickstone said: “I get frustrated being told that there are no people out there, I don’t struggle at all.

Neil Pickstone

“The talent is all over, its often right in front of you.  The people who have a real passion for it haven’t necessarily gone into university. Careers change every five years, a university course takes four years.

“In digital it is nothing but change, every single year there is change. I look for the best people, I employ the best people and they come from all over the world.

“I don’t hire in my own image. I don’t hire people with qualifications, I hire people with the ability to go further.”

David Barfield added: “Construction is a cycle. There was a point last year where quantity surveyors in Manchester were the highest paid in the country except inside the M25.

“Some of the large construction firms were just buying up the market. There is a skill shortage, people with broader business skills are hard to find.

 

“The key for us to find like minded people who are keen to move the business forward.”

Alan White then talked about the impact of Brexit on recruitment.

“Brexit is an issue for us because when we are trying to recruit people there is not as big a pool. Its been a bit of a struggle to get people.”

Neil Pickstone added: “The Brexit thing is a huge problem, anyone who thinks it isn’t is just naïve.

“If you want to grow a business it is a huge thing, the message that Brexit gives to my staff in particular is that we don’t want you. The message in Europe is very clearly Britain doesn’t want you.”

Charlotte Rees-John, a partner at Freeths, argued that action can be taken now to mitigate against the problem.

Charlotte Rees-John

She said: “There are proactive things you can do. Everyone thinks the situation is uncertain, but we have already been given a lot of guidance about what is going to happen with immigration.

“Most of the guidelines are in place, you can get ready for it now and there are steps that can be taken to help and support staff.”

Janine Smith talked about the importance of a company’s values and beliefs to potential employees.

She said: “People want to know about the company and the company’s values. These are the questions the 20 to 30-year-olds are asking.

“We have 150 staff, the majority are doing it because they want to put something back into society.

“That is very much part of what we ask. The question we ask people is why do you want to do this?”

Rachel Davenport added: “We are always looking for good people and it is a challenge for us. It us such a massive investment from our point of view.

“It is such a specialist area, they could have six months before they can pick up the phone and have a conversation with someone. In terms of the time spent it is such a massive investment, we don’t want to make a mistake.”

Neil Pickstone believes it is important to adopt new approaches when it comes to recruiting.

He said: “We don’t interview, we never ask people to come in for an interview we just ask people for a chat.

“The questions about what they do doesn’t interest me, the question about where they want to be is the most important part.

“It is really important to adapt your interviewing to get the right people.”

David Barfield added: “We are spending a lot of time with our clients in making the working environment a fun enjoyable space. Staff retention is key because of the investment we make in recruitment.

Social Chain’s offices in Mancheter

“A lot of spaces we create now are adult playgrounds with kennels for dogs and adult slides.

“One of our clients is Social Chain, we had to create a Harry Potter drawbridge with integral moat.  This was in a 19th Century warehouse with wooden floors, that took a lot of effort for us.”

Jason Iftakhar then spoke generally about the key factors when it comes to growing a business.

 

He said: “The key to growth is you, it is having that mindset. You can always find a solution. You are the barrier to growth, if you recognise that then you can overcome any problems you face.

Debbie Parker

Debbie Parker added: “The word is why, not what. People know what we do and how we do it, but do they understand why we do it?

“If your staff and your management team, if everybody knows why you are doing it then you have got that buy-in from everyone involved in the business.”

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