Business troubleshooter takes aim

By Simon Willis
Newsnight Scotland

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Firms featured in the Born in a Storm series are given advice from an expert

Donald Rumsfeld was right, sometimes there are "unknown unknowns".

A business might understand its problems and have a strategy for overcoming them, but there's always a little extra that might not have been considered.

These may be previously unknown problems or solutions that are as yet to be discovered.

But when you are a small business, how do you find them?

Last week, in our occasional series Born In A Storm, Newsnight Scotland and the BBC Scotland news website reported that three of the four new Highland businesses we are following had problems directly related to the credit crunch.

Now we have returned, taking with us a troubleshooter.

Scott Bruce carries a briefcase, not a six-gun, but clients all across the country have benefited from his wisdom.

Scott was suggested by the Inverness-based training organisation Development Partners, which helped to find our four businesses in the first place, and who agreed to fund Scott's visits along with Highlands and Islands Enterprise.

His task was to bring an outside perspective and wide expertise, and uncover those unknown unknowns.

Derek Grier - Keatek engravers, Morar

Derek Grier was facing a cash flow crisis

A problem with cash flow is common in small businesses.

Suppliers want payment in advance, customers pay late, and in a credit crunch the bank is reluctant to bridge the gap with an overdraft.

Derek was in exactly this situation, with his bank refusing to extend his overdraft. Scott discovers Derek was more interested in engraving than selling.

Apparently, it's not uncommon for craft business people to concentrate on what they do best. Scott suggests devoting more time to gently pursuing late payers, and he also came up with a few strategies.

But he believes increased sales is the best way forward, and recommended hiring someone, on a commission basis, to take Keatek's products around the country.

David Dignan Technical Services, Glen Spean

Customers delaying their projects was a major worry for David

When rural firms, like fish farms and saw-mills, need to introduce new processes or plant, David hopes they'll turn to him to manage the project.

In the last few weeks, as the economy slowed, his customers began delaying their projects and David admitted he was worried.

It's tempting to cut advertising in a downturn, but in this case, Scott's advice is to increase marketing. David acknowledges most of his work has so far come from existing contacts.

Unlike most new businesses, he got off to a flying start without advertising. He says he now intends to put that right.

Lisa Malone - Equus riding school, Roseisle near Forres

The short days and bad weather of winter means the equine assets of Lisa Malone's business are not working as many hours as possible. Lisa wants to build an indoor riding school, but that could mean doubling her £90,000.

The troubleshooter assured Lisa the banks will start lending again soon

She laughs ruefully at the idea of any bank lending that sum at present. So it's encouraging to hear Scott say he believes the banks will start lending again in around two months time.

However, he also predicts that, to avoid toxic debt, they'll set much stricter criteria than in the past.

If Lisa wants to borrow to build the indoor school she will have to demonstrate, almost to the penny, how it will generate enough extra revenue to pay both loans and return a profit.

Even then, with the loan secured on such a specialist property, there would be no guarantees.

So all four of our Born In A Storm businesses have challenges to overcome. We will return in coming weeks to see how they are progressing.