Interesting times to be a part-time FD in the SME market at the moment – trying to produce forecasts for 2008/9 for one of my businesses and to predict the levels of demand, hence staffing resources and working capital requirements is like sticking a finger in the air when you have the shifting sands of currency movements, interest rates and predictions of job losses across the board.
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Many of my businesses are reacting to the various price rises that are now filtering through in different ways – looking at the necessity of making that journey, car sharing, travelling by train, flexible working, conference calls etc – but the one unavoidable consequence of rising prices is going to be increased pressure on salaries in the coming months.

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Keeping it simple is one of the traits that I like to follow – it’s all too easy for us FDs to obscure and complicate matters through use of jargon and masses of numbers. Our colleagues really appreciate it when we break things down into small chunks, however, highlighting the issues and clarifying.

I’ve been looking at foreign currency issues with one of my businesses this week – typically we buy around €6million per annum in order to settle overseas bills as nearly all of our billing is in sterling. As we need to provide fixed price quotes to our customers, we are exposed to movements in currency over the period of the contract. With the Euro having moved around 20 per cent against the Pound over the last nine months the business needed to protect itself against this in order to avoid our profit margin being eroded.

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