The news reported on a daily basis is the news that hits the headlines and in most cases is the most dramatic of the moment, otherwise it would not be news and not worth reporting, right?

Well I have been thinking and for each news article I read I can normally try to see an upside despite the doom and gloom that is being offered. I think that this is important right now, as I have been very conscious of all the news reported lately on here, as being bad news, gloomy reports and all very much depressing stuff!

So I wanted to write a positive spin on some of the items around today to see what my readers of this blog think, so here goes:

Recession to hit the world!

This is a bad thing and no one likes a recession, well you could argue some do though. In a recession the World Banks usually put interest rates down a point or two, so if you are a home owner or more likely the readers of this blog, you are a property investor, then reduced interest rates is great news. Certainly, with my property portfolio, the 1/2 point cut was very welcome indeed on those of my mortgages that are not on a fixed rate – so bring on more cuts please Mr Bank of England! I am sure that all property owners will welcome this relief right now.

During a recession commodities prices are affected and in particular the one that is in most peoples minds is oil prices. Oil prices have dipped to around $66 per barrel this week, having been up at $147 only a few months ago. The price of oil has risen a bit today on the back of growing expectations that oil producers’ cartel Opec will cut output.

“The decision should not leave the producer countries in the situation where they will be joining the group of countries which are already suffering from the financial crisis.” Opec president Chakib Khelil

The value of US light crude recovered today by $1.63 to reach $68.38 a barrel on the back of this news. The likelihood is such that, despite Opec’s cut in production, the price of oil could drop as low as $60 per barrel – probably never thought possible back in July this year when the price was up at the $147 level!

However, the good news on this front is that we are already seeing reductions in pump prices, albeit slower than wished! This is not only good news for motorists, leaving them more money to spend in our businesses, but it also means that transport costs and especially for haulage firms, is cut too. This will all feed though the economy, thereby reducing inflation and leading to further cuts in bank base rates – Yet more good news for property investors!

Property crash, this must be bad news!

Not necessarily, where property prices are crashing, this leaves the market open for those investors looking to buy a bargain. This might seem a little mean, but it is a fact of life that there will always be winners, as well as losers in any market situation. So the good news here is not if you are a property seller, but if you are looking to buy.

The news papers report the bad news about repossessions, however, this does create a business opportunity to snap up a bargain or two from the banks when these types of property come to the auctions. Don’t get me wrong, I do feel sorry for the unfortunate people in the horrible position of having their home repossessed.

The travel and airline industry hit bad by crisis and oil prices

It is a little bit more difficult for me to see a good side to these stories, as we see US Airways and Air France-KLM have both reported heavy losses on their share prices due to the current economic slowdown. American airline US Airways has lost a staggering $865 million (£537 million) in it’s third quarter with shares falling over 14% to $7.28 (£4.50).

The European airline Air France-KLM’s shares have also taken a hammering on the markets when they plunged by as much as 11% to $15.55 (£9.59).

In these cases, the brave might say that the share prices have bottomed out and you can therefore pick-up these shares a low price. One has to be careful though when you look at what was happening with Italian airline Alitalia, as things can and do get worse so you could lose your money. However, after 9/11 in the US, share prices in all the major airlines tumbled, providing a fantastic buying opportunity for the brave and the prices recovered thereafter, making a lot of investors very rich indeed!

The other benefit these problems will have is that travel companies and airlines alike, will need to further streamline their businesses to make themselves more competitive. These streamlining measures will cut costs and thereby allow these companies to pass-on cost cuts to travellers. The airlines will have to put offers out there to encourage people to fly with them, which encourages competition, as all the airlines will need to remain competitive! Thereby, reducing prices further, because another benefit of the recession and the lower oil prices noted above is that airline fuel will be cheaper. Virgin Atlantic was one of the first airlines to cut it’s fuel surcharge on its flights, so a direct benefit to business travellers and to holiday makers alike.

Retail sales in September see a fall

Retail sales in the UK are now growing at their slowest annual rate we have seen in 2 1/2 years, as reported by the Office for National Statistics (ONS). The report shows that high street sales fell by 0.4% in September, taking annual growth to 1.8%, from 3.3% a month earlier. An example is that DSG International, which owns Currys and PC World, reported a 7% drop in sales in the half year to 18 October, which is partly due to lower margins.

This is obviously bad news for retailers themselves and the business owners concerned, however, for the consumer this is good news. The retailers will be holding more “Sales” and reducing prices to encourage people to buy – look at what Currys and PC World have said, they are selling at lower margins, which means they are having to cut the retail prices to encourage selling.

The good news is that we are seeing more of a slow-down, which will point more towards a further cut in interest rates by the Bank of England next time around, let’s hope so!

The climate for small business is getting easier around the world, according to a new report by the World Bank and its private sector arm, the International Finance Corporation.

The report, Doing Business 2009, which measures how easy it is to do business in 189 countries, says that regulatory reform has gathered pace in the past five years, particularly in Eastern Europe and Central Asia.

EASE OF DOING BUSINESS
1. Singapore
2. New Zealand
3. USA
4. Hong Kong
5. Denmark
6. UK
Source: World Bank/IFC

African countries are also increasing the pace of reform, with 28 countries initiating a reform process, including some post-conflict countries such as Liberia and Sierra Leone.

The majority of the top-ranking countries for doing business, however, are still in developed countries, with the US third and the UK sixth in the world rankings.

Georgia, the former Soviet republic, is ranked 15th in the world, with one of the most business-friendly regimes in the world.

Bahrain and Mauritius also joined the ranks of the top 25 most liberal countries.

Different strokes

The developments are striking, particularly given the worldwide credit crunch and economic slowdown.

According to Penelope Brook, the World Bank’s vice president for private sector development, we should not be too surprised by these findings.

She told the BBC that many smaller developing countries realised they had to mobilise their domestic resources and create a more business-friendly climate.

And she argued that the more difficult economic climate worldwide, which has raised questions about how much globalisation benefits all, has intensified efforts by these countries to modernize their economies and attract investment.

Business and poverty

According to Ms Brook, helping small and medium-sized enterprises in developing countries is one of the keys to eliminating poverty, especially in urban areas.

She cites survey research that shows that most people in poor countries want to either start their own business or get a job in the formal sector to improve their condition.

But, she adds, the lack of clear regulations, such as enforceable contract rights in courts, means that many small companies in developing countries are in the informal sector, where they lack any legal rights.

This makes it hard for them to expand or get access to bank loans, and that in turn limits the number of workers they could hire.

And those workers lack both job security and legal rights.

And the poor make up one quarter of the world’s population.

In its latest estimate, the World Bank says that 1.4 billion people live in poverty, based on a new poverty measure of $1.25 per day.

Ms Brook says that their lives will be helped by an expansion of small companies.

But she agrees that the area of labour laws is contentious. The report argues that flexible labour markets generate more employment and so help the poor.

But Ms Brook concedes that this is a “sensitive area” for countries, and their policies need to balance the need for protection and the need to ensure business-friendly conditions.

In previous years, trade unions have criticised the Doing Business report for ignoring the rights of workers, particularly the right to join trade unions.

Limits of reform

It is clear that a liberal climate for businesses is only one part of the story of economic development.

Many of the biggest emerging market countries, such as India and China, come well down in the World Bank report ratings.

Ms Brook said that growth in countries like China and India was driven more by macro-economic considerations and increasing foreign investment.

But she pointed out that there had been significant reforms, particularly in China, giving more legal rights to business owners and establishing a system of credit ratings for individuals.

In addition, many of the developing countries that have a liberal economic regime do not have a liberal political regime.

Whether economic reform will ultimately encourage political reform, or whether political repression will in the end inhibit economic development, is still an open question.

News reported by The BBC

Irish bookmaker Paddy Power has issued a profit warning, blaming a run of unfavourable sporting results and the wider downturn in consumer spending.

The company now expects to make an operating profit of 75m euros ($110m; £60m) in 2008, down from its previous guidance of 82m euros.

It said 4-5m euros of the reduction was due to big payouts, including bets on Irish golfer Padraig Harrington.

Reduced betting business in the UK and Ireland will cut a further 2-3m euros.

Slowing growth

“The performance of the Irish and UK economies has deteriorated” Patrick Kennedy, Paddy Power chief executive

“Much has happened since our last trading update three and a half months ago,” said chief executive Patrick Kennedy.

“The performance of the Irish and UK economies has deteriorated, and the growth rates in our businesses have slowed accordingly.”

Paddy Power also said it had been hit by a number of heavily-backed wins for horses trained by popular Irish trainer Aiden O’Brien.

Shares in Paddy Power were down 8% to 14.78 euros in early Wednesday trading.

News reported by The BBC

Mexican cement giant Cemex plans to go to the World Bank to seek arbitration after Venezuela’s government seized the firm’s local subsidiary.

Cemex argues that the move to take over the firm’s assets in Venezuela and nationalise the business, is illegal.

Unlike other cement firms Holcim and Lafarge, which have agreed to hand over local subsidiaries to the Venezuelan government, Cemex has yet to agree.

President Hugo Chavez plans to nationalise a number of businesses.

‘International law’

Government officials, with the backing of the National Guard, took over the firm’s factories on Monday after 60 days of talks ended without agreement.

Cemex now intends to go to the International Centre for Settlement of Investment Disputes, arguing that the move was a “flagrant violation” of the country’s constitution.

The firm said it was offered $650m for its local operations – a sum that “significantly” undervalued the business. It had wanted $1.3bn (£697m)

“The Venezuelan government actions highlight a lack of respect for the principles of international law and the treaties relating to reciprocal protection of investments,” said the firm.

France’s Lafarge and Swiss group Holcim had already handed over local subsidiaries to Caracas by the time Cemex was seized on Monday.

Other industries set to be nationalised include banking and telecommunications.

News reported by The BBC

Nearly 300 workers at Land Rover in the West Midlands have been moved to the nearby Jaguar factory because of a lack of work, unions have said.

The staff have agreed to move from the Solihull factory to the Jaguar plant in Castle Bromwich where they have been guaranteed two years work.

Solihull plant convenor Bob Nason said they would work on the Jaguar XF model.

A spokeswoman for Land Rover said it was just “good business” practice and the moves were voluntary.

‘Production fluctuates’

The brands were recently bought from Ford by Indian motor giant Tata for £1.7bn.

Mr Nason said the 284 staff would have had very little work to do if they had remained at Solihull.

The Land Rover spokeswoman said: “It’s part of the deal that we have and they were all voluntary moves.

“Production fluctuates between the two brands and this is a good business way of dealing with those changes.”

News reported by The BBC

Union body the TUC wants an extra UK bank holiday to celebrate the work of volunteers and to boost the economy.

It wants the “community day” to come in late October and to encourage people to get involved with communal activities.

The economy would benefit from the extra spending that would result from people having a day out, it said.

But the government said it had no plans to change the current pattern of bank holidays, claiming there were other ways of promoting work-life balance.

“The government regularly receives a variety of suggestions for new or different bank holidays,” said a Department for Business, Enterprise and Regulatory Reform (BERR) spokesman.

“However, it is not possible to please everyone as to whom or what should be celebrated.”

‘Spending boom’

The TUC said nearly a million businesses in the retail, hospitality, leisure, tourism and transport sectors would benefit from a new bank holiday from 2010.

“Creating space and time for volunteering is essential for the health of our society” Justin Davis Smith Volunteering England

Some £90bn of spending a year in the UK economy comes from days out, which would be encouraged by the extra break.

The TUC’s report also suggests that it would also lead to employers benefiting from a workforce with improved productivity, morale and health.

Justin Davis Smith, of Volunteering England, said it supported the idea of a community day.

“Creating space and time for volunteering is essential for the health of our society and I firmly believe that this day would encourage more people to get involved with their local community,” he said.

The government said six million workers in Britain gained an extra four days annual holiday in October 2007.

It said that figure would increase by another four days next April, bringing statutory annual leave to 28 days a year.

“Bank holidays are well established in this country and any move to introduce an additional holiday would need to balance the benefits it would bring to some individuals and businesses against the cost and disruption it would involve for others,” the BERR spokesman said.

News reported by The BBC

You’ll never see an entrepreneur wearing a sandwich board and predicting that the end is nigh.

Those who have set up their own businesses tend to be among the worst at foreseeing their collapse, experts say.

Perhaps it is the emotions involved, maybe selective blindness of the facts, or above all it could be the fear of failure.

But with the economic downturn continuing, it could soon be time for many to face those demons and accept their business is in trouble.

Facing collapse

One of the key barometers of the economic climate is the number of businesses going into administration.

“I am pretty sure that during the next 12 months we’ll be in some fairly choppy waters” Alan Bloom Ernst and Young

This is the point at which outside experts – the administrators – come in and take on the role of the directors.

Any action from creditors is frozen as the administrators to try to save the business, sell it or close it.

The latest figures for England and Wales revealed that the number going into administration in the three months to the end of June rose by 9.2% on the previous quarter, from 859 to 938.

After a revision of the numbers, the Insolvency Service says that the latest figure is 60% higher than the same period of 2007.

But, if analysts prove to be correct, a big rise is still to come.

“I am pretty sure that during the next 12 months we’ll be in some fairly choppy waters,” says Alan Bloom, global head of restructuring at Ernst and Young.

The first date to look for 29 September.

This is the next “quarter day” when retailers have to pay the next three months rent to their landlord, and which can prove the final financial straw for some.

There has been lobbying from some retailers to pay monthly, rather than quarterly, rent to ease the hit.

After this date retailers will also be entering the critical pre-Christmas quarter which Mr Bloom expects to be the toughest for many years.

Spending

But it is not just retailers which will be affected by the tough months.

Wrapit collapsed leaving hundreds in fear of losing their wedding presents

With household finances being squeezed by food and fuel, consumers’ discretionary spending is likely to be drawn in.

A number of furniture companies have felt the pinch with some going into administration as people spend less on improving their homes.

Mid-range travel companies, the motor retail and leisure sectors will also face tough times, according to Geoff Carton-Kelly, partner at administrators Baker Tilly.

This, alongside the downturn in the property market and advertising spending, has led to his prediction that the number of businesses going into administration will rise by 50% by halfway through 2009.

During the high-profile collapse of wedding list company Wrapit, the business’s bank and main creditor HSBC was accused of withholding credit and debit card income, with a Wrapit director saying this caused a cash crisis.

The bank said it had done everything it could in the preceding months to assist the directors.

And Mr Carton-Kelly says that the banks, despite their own lending coming under pressure owing to the credit crunch, “do not do rug-pulls anymore”.

“The banks have armies of people to support businesses with a decent recovery strategy,” he said.

“They are happy to work with a business’s advisers to find a way through.”

Early assistance

Both Mr Bloom and Mr Carton-Kelly have years of experience in dealing with businesses in administration.

Discretionary spending is likely to continue to go flat

Mr Carton-Kelly says he has dealt with businesses ranging from abattoirs to firms built on chemical waste dumps in his role as an administrator.

He has stood in front of hundreds of disgruntled staff and hired security to protect goods from unhappy customers.

Mr Bloom says that the complexity of business – owing to its increasingly global nature – makes it an art for them to survive in the current downturn.

“Lawyers and accountants should not run the world but I think a little bit of help from them at the moment will be a good thing,” he says.

A different form of management is required in times of economic downturn, he says.

The duo agree that the holy grail is for entrepreneurs to seek external help early, giving a rescue package more opportunity for success.

And here’s the good news.

Up to eight or nine out of ten businesses survive in one form or another, according to Mr Bloom.

A good chunk of these are the result of “pre-packs” – when a business secures a buyer when it knows it is heading into administration.

Aware of the growing numbers of companies facing collapse, investors are lining up funds to buy businesses for a bargain as they enter administration.

For those which are not bought as a going concern during administration – which typically lasts for six to eight weeks – the administrators oversee the sale of assets.

Staff are among the hardest hit when a business folds, sometimes only having a few weeks or days notice before losing their jobs.

“The problem is that this often happens with enormous speed; the good bosses will help cushion the blow,” says Sarah Veale, head of equality and employment rights at the TUC.

Strict rules govern how administrators dish out any money that is left in a business.

Customers, suppliers and contractors – known as unsecured creditors – are towards the back of the list with the taxman. At the front is the bank, with staff just behind.

These can be difficult negotiations to deal with for the administrator – but a job that is predicted to become a lot busier.

News reported by The BBC

They are two of global aviation’s biggest birds – and by cosying up close to each other they hope to keep themselves out of the turbulence rocking the world’s airlines, especially on key transatlantic routes.

British Airways and American Airlines are effectively applying for the right to break the US laws that prevent companies from co-operating too closely.

Anti-trust immunity, as it’s known, is designed to stop cartels unfairly dominating markets and it is a big issue in aviation.

The reason is that of the three big airline alliances operating out of Heathrow Airport, two have anti-trust immunity.

Skyteam, including Delta, Northwest and Air France is one. The Star Alliance including Continental and US Airways is the other.

But One World – the British Airways and American Airlines alliance – is the third, with no such immunity.

Fixing fares

If BA and AA can persuade the US Department of Transportation of their case they will be able to merge in all but name.

Incidentally they can’t actually merge because of American laws preventing foreign ownership of US airlines.

“A BA/AA alliance would be bad for passengers, bad for competition and bad for the UK and US aviation industry” Sir Richard Branson Virgin Atlantic

But it would mean BA and AA could fix their fares, routes and schedules together.

A passenger using the BA website would also be able to buy through tickets on American to some of the smallest US destinations.

They would get BA air miles the whole way. Theoretically their bags would be checked all the way through, as if there was just one airline.

All of which may sound good for passengers.

But what happens when you let two massive airlines become practically one even more gigantic carrier?

‘Too dominant’

Well this is what Sir Richard Branson – chief executive of BA’s eternal rival Virgin Atlantic – says about it.

“Make no mistake. A BA/AA alliance would be bad for passengers, bad for competition and bad for the UK and US aviation industry”.

Virgin believes that BA and AA are already too dominant – controlling 200,000 of the 480,000 take-off and landing slots at Heathrow.

And 62% of passengers travelling between Britain and America use one of the airlines.

This, Virgin says, is an advantage at Heathrow so big that the two shouldn’t get anti-trust immunity even though their rivals have it.

“BA would argue that by reducing the number and synchronising services they could provide a more efficient operation and reduce costs” Peter Morris Aviation analyst

For the transatlantic partners this tie-up has been on the wish-list for years.

They have already applied twice, in 1997 and 2001 but were told they would have to give up too many slots across the Atlantic to make it acceptable to them.

But now we have the Open Skies agreement which gives rights for a wider variety of airlines to fly between the US and the UK.

British Airways says this means that there is now more competition, and that BA and AA should be given a freer hand.

Dire outlook

“I think it’s a question of just how much is enough competition?”, says aviation analyst Peter Morris of Ascend.

“If you look out of the UK you’ve already got 21 carriers operating scheduled services at the moment across the North Atlantic.

“I think BA would argue that by reducing the number and synchronising services they could provide a more efficient operation and reduce costs.”

Regardless of the historical aspiration, the dire situation facing the world’s airlines provides an added spur for BA and AA to do the deal.

Look at it from the American side.

“Few of us thought that we would ever look back fondly at $90 a barrel oil,” American Airlines’ chief executive Gerard Arpey told his shareholders in May.

“But, as you all know, the rise in the price of oil – and by extension jet fuel – has accelerated during the past several months to extraordinary levels.

“The slowing US economy and our industry’s persistent overcapacity, have prevented us, or any other airline, from pricing our product in a way that reflects our skyrocketing costs.”

No quick answer

That is the problem in a nutshell.

Its not quite as bad for British Airways, which made profits of nearly £900m last year despite an air crash and a PR disaster at Terminal Five.

But BA is facing fuel bills of up to £3bn this year.

Sir Richard Branson has already written to America’s two presidential candidates, one of whom will end up making the decision, to persuade them to say no.

BA and AA have tried – and failed – twice before to have a tie-up.

The problem for BA and AA is that both Barak Obama and John McCain are pretty protectionist.

Will their desire to help a struggling American Airlines overcome their reluctance to give British Airways a foothold in a big American company?

The hiatus caused by the US election means the US authorities are unlikely to give a quick answer.

Uncertainty

And even if they do give the go-ahead, the deal would certainly involve British Airways and American Airways giving up slots across the Atlantic.

But which slots?

Answering that question is likely to involve lawyers, regulators and a lot of wrangling.

Yet the fate of this proposed deal is worth watching closely.

The basic rule of the aviation market is that when the going gets tough, airlines either consolidate by merging or finding allies, radically cut costs, or go under.

BA and AA now wait to find out how far they can go in protecting themselves from an uncertain few years.

News reported by The BBC

Keep your existing customers happy and you will have a great business!

Secure customer relations will help keep your customers coming back to your business and you can do this by:

1. Preferential pricing – you can offer your existing customers the first bite at a sale you might be holding before the public. Be careful with this though, there are many banks and credit card companies that offer a preferential interest rate to attract new customers only to leave existing customers disheartened!

2. Post purchase reassurance – After customers buy from you, a phone call to them will keep them happy and give them confidence in your business. If you decide to have your business operate a customer post purchase reassurance system, you will be out in the lead over your competitors, as not many businesses do this. Take a look back over the last few purchases that you made yourself, how many of those companies called you to say thank you for the sale and how you are finding the product? Not many I suspect!

3. Build rapport with your customers – This is similar to the post purchase reassurance and really builds trust in your company from your customers view point. People like to deal with honest and ethical people so keeping in touch will show integrity!

In order to keep in touch with your existing customers, you will need to build and maintain an accurate and up-to-date customer list. This will enable you to write or call your customers on a regular basis and keep them informed of new products or services and any new deals or sales that you are holding.

You should keep a record or what each of your customers buy too – like for example, the big supermakartets do by offering their customers loyalty cards – These cards, like the UK’s Tescos Club Card, gives the supermarket your home details so they can write to you. Each time your club card is swiped at the end of your shopping spree, they will make a record of what you like to buy! This data is held on a computer and will be used in their marketing strategies for pricing and promotions.

The All Business Class airline Silverjet went into administration this week after it faced major financial problems that forced the company to suspend all its flights. Passengers already booked on flights were left stranded and left just under 10,000 customers needing to make alternative plans at rather short notice!!!

One of the major contributors to Silverjet troubles stems from the soaring cost of fuel – and only this week we have also seen the lorry drivers protest to the Government over rising prices at the pumps. I wouldn’t be too surprised to see a number of haulage firms going bust too if oil prices and consequently pump prices continuing to rise, as they have done over the last 12-24 months!

Also, in the airline industry two of Silverjets competitors Maxjet and Eos have both gone out of business too and there are many other carriers struggling and even British Airways put up its fuel surcharge today!

“For sale Silverjet said it was “with deep regret” that it has appointed administrators.” The company have been unable to secure the necessary funding to continue its operations so had to call in the administrator Begbies Traynor. There were interested parties in the potential sale of Silverjet and the administrators seem confident of a sale. Shares in the carrier were suspended earlier this month when it failed to obtain a critical $5m (£2.5m) loan.

The business operated with three Boeing 767 aircraft and flew out of London Luton Airport to New York and Dubai – the average cost of a return fare was around £1,000 and Silverjet started its service in January of 2007.