Careless talk costs business

Mar 24 2009 by Neil Warwick, The Journal

NO one is predicting when the green shoots of economic recovery will emerge.

After Gordon Brown’s statement that he had abolished boom and bust, bold statements have understandably gone out of fashion. However, what is puzzling about the trend for talking the economy down is the concept that all sectors of the economy and all geographic regions will perform in the same way.

Using the institutional dinner circuit as a litmus test for how things are in the North East is as good (or bad) a test for the regional economy as any other economic measure.

In the past few weeks nebusiness has been running heats for the Business of the Year Award. Entries for the awards and the number of people at the dinners have increased substantially on last year.

At last week’s dinner there were a number of bankers (a sign that they are willing to be out in public again) and accountants specialising in turnaround (insolvency practitioners) and when asked if they were busy, the consistent answer was that yes they were, but nowhere near as busy as in the recession of the early 90s.

A couple of weeks ago, Entrust hosted a talk at the Investors Forum by the chairman of the British Business Angels Association (BBAA) which began with a question: What do Ford Motor Company, the Bell Corporation, Microsoft, Sage and Body Shop all have in common?

The answer was that all started with Business Angel Finance and all were established during recessions. While the BBAA accepted markets in London were very low and could remain so until the 2012 Olympics, it seemed keen to see if there were deals to be done in the North East.

The innovations and technologies being presented at the Investors Forum demonstrated that there definitely was life in the start-up and owner-managed business sectors.

All the major high street banks in the region have now done Enterprise Fund Guarantee (EFG) schemes for the SME sector and there are also a number of new technology proposals on the go. While no one would be bullish enough to predict green shoots in the North East, the words of one insolvency expert in the region are worth bearing in mind: “If you aren’t careful, all of this negative talk will make things much worse than they need to be.” Perhaps now is the time to start talking positively.

Neil Warwick is partner in the corporate and commercial department at Dickinson Dees LLP