Finance: It’s not like it used to be!

I was reminiscing with a client recently about how different it used to be trying to raise finance from the bank, prior to the credit crunch.

Just over ten years ago our business moved office and had a lot of expenditure upgrading the premises, which put a strain on our cashflow. To help tide us over a quick email to our relationship manager outlining the financial projections of the move and the impact on our cashflow forecast moving forward, followed by a lunch, was all that it took to secure a 12-month loan, at a very reasonable interest rate and low arrangement fee.

The next day the paperwork was signed without any need for endless security, and by the end of the week the money was in the bank. I can always remember the manager’s words at the end of lunch. “Colin, you won’t let me down will you?”  Well no, I didn't let him down, and the loan was paid off in full over the 12 months as forecast.

How things have changed since the credit crunch! I know that banks are constantly saying they are open for business, but I cannot imagine a loan being granted at such short notice these days on the same terms.

One thing that still remains constant though, is the need for robust forecasts, both profit & loss and cashflow, that allow business owners to plan for the future.

These forecasts are vital if a business is looking to invest in new products or services, and if a bank is going to grant a loan they will want to ‘stress test’ a company to ensure that it can afford the repayments, as well as having necessary security in place.

Having a Finance Director within your business, whether full- or part-time, who is adept at putting these forecasts together, will help your company to gain considerable credibility with the banks and help secure funding. I believe this so strongly that I now work part-time with small businesses as an Associate at South West FD (SWFD), in addition to my long-standing role as Chairman and Finance Director within my own business, Target PR.

As the UK hopefully continues to recover there is likely to be more borrowing requirement to boost the economy. So let me unashamedly plug SWFD, which has a number of Associates who can give businesses financial credibility by putting in place budgets, forecasts and cashflow statements that will ensure you will be in the perfect position to approach either a bank, or external investor, to raise funds and move your business forward.

Colin Spencer

Chairman

What’s PR for and how can we tell if it’s working?

This question is more pertinent than ever when organisations of almost every kind are under pressure to perform at their highest despite the economic climate.

Here’s how I see it.

PR strategy must contribute to organisational success.

Except it’s not all that simple. Measuring the value of PR has been a bugbear for our industry, well, forever really.

In the past, the weight of the cuttings book seemed a fair indicator of a campaign that had done well, and this ‘volume’ metric evolved into the pseudo-science of AVEs (Advertising Value Equivalent) in which we argued that the value of each piece of ‘free’ editorial was worth one/three/name-your-figure times the price of the media space if it had been purchased for an advert.

More sophisticated ways of measuring the quality of coverage, however, are a step forward. By tracking our success in reaching specific audiences with key messages designed to influence the way we view the organisation, we can begin to assess the success of a campaign. Balancing qualitative and quantitative measures is important. But these are still ‘outputs’ – what we need to try and do is measure ‘outcomes’. Are we having the intended affect? Are we contributing to a change in opinion or behavior?

The great and the good of the international PR community, including the CIPR, got their heads together in 2010 and came up with seven key factors which should shape best practice. These are known as the Barcelona Principles:

1. Importance of goal setting and measurement

2. Measuring the effect on outcomes is preferred to measuring outputs

3. Effect on business results can and should be measured where possible

4. Media measurement requires quantity and quality

5. AVEs are not the value of public relations

6. Social media can and should be measured

7. Transparency and replicability are paramount to sound measurement

Success starts with excellent planning and strategy. A wise and successful businessman I know, Stewart Barnes, explained that “Strategy is doing the right things. Tactics are doing things right.” True of business planning, true of PR planning too. There’s little point in delivering an amazing PR campaign (doing tactics really well) if it doesn’t meet the objectives of the client.

So here’s my top seven, the Bryars’ Principles of PR planning and measurement:

1. Understand as much as you can about what success means for each client

2. Create a strategy that will support the journey to success

3. Be specific

4. Execute your plans and tactics brilliantly

5. Stay focused on outcomes

6. Don’t get lost in tools – measurement is a discipline, not a single metric

7. PR rarely functions in isolation – own your part, share the success

What’s your version?

Sarah Bryars

Chief Executive