Turnaround expert joins Foundation East
Foundation East interview: John Hendy
Foundation East is on the lookout to extend our expert board. This Q&A with one of our latest recruits, John Hendy, a retired turnaround interim manager with, amongst others, regional insolvency practitioners McTear, Williams and Wood, gives a taste of the sort of company new volunteers will be keeping…
With more than 50 years’ experience in finance, IT, administration and management, twenty of which have been spent as a turnaround expert for businesses in the East of England, John brings much relevant experience, expertise and energy to our board. Here’s what he has to say about Foundation East’s ongoing role in the community and the vital part that micro and small businesses have to play in the region’s continuing economic stability.
Why did you want to join the board of Foundation East?
I am really passionate about the essential role of small businesses in creating economic stability and employment, both locally and nationally. I believe that joining the board of Foundation East gives me an opportunity to contribute my experience and expertise to an organisation that already really makes a positive difference within the community I have worked and lived in for the last 55 years.
Why am I so invested in the region’s army of micro and small businesses? Well, one way to explain it is by using the analogy of the food chain. You have to have smaller businesses for medium and larger businesses to exist, let alone survive. If they’re removed or lost, it’s like removing krill from the oceanic food chain. The next stage up dies off, then the next, then the next until, eventually, all you have left is predators and no food. Thus, without the work of support organisations like Foundation East in helping to sustain the small and social business sector in the east of England, the region’s broad-based economy begins to shrink from the bottom up.
We are in a region that is much more dependent on small businesses than is commonly appreciated. Furthermore, it is much less well-served by governmental grants and support than, for example, Cornwall, the Midlands and the North.
This is, in part, due to the media and government’s focus on our two biggest success stories – farming and technology, and also in part due to the fact that, as a region we’re always the last into a recession and the first out.
Right now, no matter what happens next regarding Brexit, there will be turbulent times ahead. Our region’s small businesses will be hit hard. Foundation East and I share the same aim – supporting micro and small businesses - and this common objective has become much tougher in the last few years. So, it seems like a good time to get stuck in, lend a hand and join their board.
Given your deep experience working with micro and small businesses in the region who are struggling to survive, what do you think the greatest challenge they face is and how would you like to see Foundation East – and the wider finance sector –address this challenge?
The greatest challenge currently facing micro and small businesses is uncertainty. Brexit or no Brexit, the support small businesses have in this country is sadly lacking. I’d like to see more done to educate small business owners about the basics of running a small business. When times are uncertain or tight, having plans for your business and its cashflow are essential tools for monitoring progress. Otherwise you are taking a journey without a map and without a fuel gauge.
Foundation East has a strong track record in supporting its clients in putting these basics in place. By the time they have repaid their loans, the practices they have put in place, with Foundation East’s support, are embedded and, with these tools, most go on to make a success of their business.
However, for many small businesses who are not lucky enough to have been through the Foundation East process, and even for some who have, book-keeping – the basics elements of financial control - remains a challenge. It is easy to report progress against budget, but only once the budget and the time and regular procedures have been put in place. Without these simple admin disciplines, a scaffolder, for example, maybe can scaffold brilliantly but, because school did not give him the basics needed to run a business, a surge in business, which is seen as a success, could easily become the tsunami that drowns the business in debt.
Small business folk have a passion is for the business they are in, not for keeping the books, and, frankly, their tight margins leave little spare cash with which to employ a book keeper. Furthermore, their accountant, if they have one, is seen as a tax advisor/reducer and the accounts produced are usually so old that they provide little or no useful purpose. So, I think more support in helping them with the basics is key. And, having now joined the board, I am delighted to learn that there are plans to extend Foundation East’s services to include affordable, trustworthy book-keeping for small businesses. I would like to encourage banks and lenders in general, as well as Chambers of Commerce, to take a more pro-active stance in supporting education in business basics for start-ups and the SME sector. Success in this area would pay dividends for both the institutions and the fledgling enterprises.
Returning to what I said earlier regarding Brexit, I foresee things becoming even more uncertain and complicated, thus creating a larger unseen admin burden. If you have small businesses providing a product or service that requires importing parts, for example, well, they’re going to have to start somersaulting through new hoops, completing new paperwork around VAT and import duties, as we used to in the 70s.
Targeted education, support, information and communication on any new standard requirements will be key in easing us through this period.
Continuing investment in Foundation East from the EU and UK government funding pots is unlikely. This makes our organisation more reliant on companies and individuals investing in our Community Investment Tax Relief (CITR) shares. Who do you think might benefit from investing in our CITR shares – and why?
Too often the media focus on the bad stuff that goes on in communities. We forget about the everyday stuff that makes it nice to live and work where we do and more often than not, we just accept, without thinking too deeply, about the role that micro and small businesses play in our lives.
To see the value that micro and small businesses add to their community, just visit any of the wonderful markets we have in our towns and cities. These individuals and families, from the fruit and veg stalls, the ethnic food stalls, fish stalls, vacuum parts stalls, blinds, clothing, plants, flowers, leather belts, CD and vinyls, and old magazine stalls, all run small businesses. Or think about the regions’ pubs, not just an alcohol delivery site, but the social hub of so many villages – providing so many spin-off services to its local community. So much has been lost, economically and socially, right across our region by the multiple pub losses – one small business that requires support in order, in turn, to support a whole local community.
Please take a look at the success stories of some of the businesses Foundation East supports. We all, at some point in our lives, have benefitted from using a local estate agent, hairdresser, care at home service, bakery , care home, or building suppliers - to pick out just a few.
Investing in Foundation East and our CITR shares enables such businesses to start up and grow.
OK, so this is the advert bit, but why not? If I don’t ask, I miss an opportunity and so do you. If you had a spare £1,000 and invested it over a period of five years in Foundation East, you could claim back £250 of that investment in your Tax Returns over that five years. Plus, at the end of that five years, you could take your money back out. According to Foundation East’s past performance, the maximum risk of loss on the amount you invested is 20 percent, so, potentially, you might only get £800 back. But remember, you’ve already benefitted from that £250 tax relief! So, you’re still £50 ahead, plus you can polish your lapel and feel happy about yourself because your money has done a considerable amount of good in your local community.
Why should anyone consider joining the Foundation East board?
Foundation East creates and supports employment and it generates £15 worth of social and economic impact for every £1 it spends supporting micro, small and social enterprises in the region. I hope you agree with me that these enterprises are vital to our region’s economic resilience. So, if you have the time and expertise to help support the work of this vital not for profit provider of loans and support to such businesses, why wouldn’t you? Getting involved is the only way to make such a positive difference.
Don’t just take my word for it though. Let me borrow some words from one of our social enterprise clients, Storimarket’s founder, Tom Ellum, to encourage you to join us in making this positive difference:
“I liked the fact that Foundation East was a not-for-profit community finance company and that the interest clients pay on loans gets reinvested back into the local community. We, like many of the independent retailers we now serve, are aware that local communities are taking a battering. Foundation East exists to do something positive about this.”
Foundation East is looking to provide loans and business support to micro and SME businesses in the east of England with viable business plans.
If you know any, please put them in touch!
Foundation East needs you!
You can help too. Invest in our CITR shares. Help us deliver £15 social and economic impact for every £1 we spend delivering our service and help yourself to 25% tax relief over 5 years.
Looking for a non-exec role creating local social and economic impact?