THE WONDERFUL TOURIST ATTRACTIONS OF NORTH WEST WALES

As one of those who believed the weather forecasters’ predictions that we were due for a heatwave across the UK this summer, the damp squib that has accompanied much of my holidays in August was slightly disappointing, although it did allow me the opportunity to catch up on various box sets, novels and general housekeeping.

The continuing rain falling across our fair land last week did fill me with some trepidation over my visit back home to North Wales, as one of my best friends and his family were due to visit the Llyn Peninsula together for the first time.


I have known Dr Charles Li since we studied for our PhDs together more than 25 years ago and while I went into academia, he ended up going into finance and heading up both RBS and ANZ banks in China before retiring last year (although he still sits on the boards of some Chinese businesses). Whilst I am godfather to his eldest son (and he is godfather to mine), we have only been able to meet up occasionally when I have been on business in the Far East or he has visited London to advise his colleagues on the changing situation in China.
 Therefore, this was an opportunity to catch up with Charles and his family and, more importantly, to show them the lands where I was born and brought up.

We stayed in a cottage located at the end of the Llyn Peninsula near Aberdaron, which has been the point of departure since the 6th century for pilgrims wanting to take a boat to Bardsey, the 'island of 20,000 saints'.

When I was a child, Aberdaron was a sleepy fishing village but by now it has become a thriving tourist hub. In fact, there was nowhere to park in the village when we arrived at noon on Monday. This gave us the opportunity to go for a walk to the top of Mynydd Mawr in Uwchmynydd to gaze over the sound to Bardsey before returning to the village for a late lunch in the Ty Newydd Hotel.


Regular readers of the Western Mail will have noted the many column inches written about the wonderful beaches of the Gower. But although I may be slightly biased as a 'Gog', those to be found on the Llyn Peninsula such as Porth Iago, Porthdinllaen, Porth Neigwl and Porthoer (or Whistling Sands where sand does actually squeak under your feet) are their equal in many ways.
 Apart from the great food and local ales available at the Ty Newydd (and its sister pub The Ship 10 yards across the road), where else in Wales can you find a hotel where you can walk out of the front door and straight onto a sandy beach where dolphins are often seen only a few yards from shore? 


We were blessed with sunny weather on Monday although the following day brought clouds and rain, which was fortuitous as I had booked for all of us to go to the Zip World complex in Blaenau Ffestiniog, a unique tourism destination that is helping to cement Wales’ reputation as the place to come and experience activity-based holidays.



For those of you who have never heard of this attraction, it has to be experienced to be believed. Zip World Velocity was opened in 2013 at Bethesda’s Penrhyn Quarry and involves being attached to wires and flying head-first at speeds of up to 100mph for just under a mile down a mountain and then 500ft above the quarry lake. It has been followed at Llechwedd Slate Caverns by Zip World Titan (the first four-person zip line in Europe) and, at the same location, Bounce Below, a collection of giant trampolines, walkways, slides and tunnels all made from netting located deep underground.


If that wasn’t enough, they have recently opened Zip World Caverns, which is the place the Jones-Evans and Li families decided to visit. 
To say it was one of the most exciting and exhilarating things I have done in recent times would be an understatement, especially for someone who has a slight case of claustrophobia and vertigo. Not surprisingly, those phobias are both gone as I spent around an hour and half negotiating a range of underground zip lines, rope bridges, obstacles and tunnels, usually on the side of a 100-foot drop.

Finally, we ended the short break together in a very different environment, the unique setting of Portmeirion, which was packed full of visitors enjoying the inspirational vision of Sir Clough Williams-Ellis and, who, like my Chinese friends, were amazed by the location of this picturesque Italianate village on the banks of the Glaslyn Estuary.

Our three days staying on the Llyn Peninsula last week demonstrates the variety of visitor attractions available across north west Wales throughout the year.

I would hope that many will follow our lead and take the A470 and A487 roads north to a fabulous tourism destination that has has a range of experiences on offer to suit all tastes.

INVOICE FINANCE AND SMEs IN WALES

Whilst much of the recent debate on access to finance to small to medium sized enterprises (SMEs) has focused on traditional bank loans or equity investments, there are other forms of funding which should also be considered as an alternative source of money for firms in Wales.

One solution that is being increasingly used by companies to deal with late payment whilst improving cashflow is that of invoice finance. This is where a finance provider pays an agreed proportion (usually 80-85 per cent) of approved invoices to the company on receipt of a copy of the invoice. The balance (less a small charge) is paid upon client payment.

With the economy growing, there has been a surge in demand for working capital in the SME sector that has created opportunities for more invoice financing. Despite this, its current use is relatively low compared to more traditional sources of lending and only 43,000 SMEs out of a total of nearly 5 million in the UK are currently utilising invoice finance. With such unfulfilled potential, it is estimated that there could be an untapped market of up to 600,000 SMEs indicating that the overall market has significant growth potential. 

Whilst invoice financing is available from both the banks and independent providers, one of the major problems is that there is a general lack of awareness by SMEs of the advantages of utilising this source of funding. 
In this respect, there needs to be a more concerted effort by the Welsh Government’s business support services to raise market awareness of this type of financing that could, if adopted properly, have an impact on the way some businesses in Wales can gain access to capital to grow their business. 

In terms of any direct financial support, there has been a reluctance by Finance Wales to support this type of funding in the past. As a result, a new Development Bank for Wales that is currently under consideration by the Welsh Government could develop its own invoice discounting products to support businesses. However, unlike other types of products that have been developed by Finance Wales in the past, any publicly funds should not compete with the private sector and should only be developed where there is evidence of market failure.  

Currently, independent invoice finance houses – such as Henry Howard Finance in Newport - tend to be restricted in the funding lines they can obtain from their own funders due to their capital constraints and the cost of borrowing which restricts the size of their ‘lend’ to a maximum of £500,000. In contrast, invoice financing provided by the high street banks is primarily focused on the larger ‘corporate’ deals where they are providing over £1 million to firms. 

This means that there is a funding gap in the £500,000 - £1 million segment that is best served by independent invoice discounters that have a much greater acceptance rates than bank providers, provide a more flexible facility and a higher level of service. 

There are also a significant number of Welsh SMEs that fall within this range of funding need but are not adequately catered for. If additional funding lines were available through a Development Bank for Wales for invoice financers in Wales to close this gap, then there would be considerable impact on these businesses and the jobs they wish to create. 

More importantly, the risk in lending (especially compared to traditional loans) would be minimised because of the very nature of invoice finance i.e. one of the major advantages of invoice finance is that the cash lent ‘turns’ on average every 57 days. In other words, the amount lent is repaid by collections from the debtors in this timescale and is then lent again. 

With such a 57-day debt turnaround, the same amount of funding can be lent over six times annually which means that an invoice finance provider lending of £500,000 to one client can, in fact, lend this amount six times annually even though the provider only needs to borrow £500,000 once. 

Therefore, there is a need for greater innovation in the provision of funding SMEs and a more positive view on invoice finance help close the funding gap experienced by many Welsh firms. 

Certainly, there are real opportunities for Wales to lead the way in supporting such alternative sources of funding which are relatively easy to set up and manage but, more importantly, can help fill a gap in funding that can make a real difference to the growing economy.

Heads down for a winning line

What is the one thing that almost all of your prospective and existing customers do over 150 times a day?

 Answer – Check their mobile phones!

Imagine that you placed a business advert in the local paper and you were told that almost all of your target market was guaranteed to read it; you would be pretty excited, wouldn’t you?… Read the rest

The post Heads down for a winning line appeared first on Business Growth Wales.

THE EVOLUTION OF ENTREPRENEURSHIP POLICY IN WALES

I have recently published a paper with Dr Martin Rhisiart, of the University of South Wales, in the journal “Technological Forecasting and Social Change”.

It examines the impact of “Wales 2010”, a project developed by the Institute of Welsh Affairs in 1993 to set out the future policies to make our nation prosperous, and how its proposals for developing entrepreneurship had impacted upon the Welsh economy.

One of the clear recommendations from the Wales 2010 was the development of an entrepreneurship culture through key institutional actors such as the Welsh Office and the Welsh Development Agency.

And it was the Welsh Office that initially responded to the challenge and vision of Wales 2010 in its economic strategy document, ‘Pathways to Prosperity’ in 1998 where a commitment to establishing an entrepreneurship action plan was included as the basis for establishing a bespoke programme for enterprise.

As this blog has discussed several times, the impact of the Entrepreneurship Action Plan (EAP) for Wales established in 1999 was profound. Through actions such as embedding an entrepreneurial education in Welsh schools, colleges and universities, creating funds for SMEs and start-ups and encouraging entrepreneurship within the public sector, it began to transform the Welsh economy into a ‘Land of Enterprise’.

Its main target was increasing the number of new businesses and according to data from the UK Office for National Statistics, the number of start-ups created during the period 2002–2005 increased by 21 per cent as compared to 13 per cent for the UK. More relevantly, there was an increase of 24 per cent in the poorer region of West Wales and the Valleys where the above programmes were specifically targeted.

And then there was a moment of policy madness within the Welsh Government when, in 2004, the organisation responsible for implementing most of the EAP, namely the Welsh Development Agency, was abolished. The EAP closed down soon after and entrepreneurship became largely absent within the innovation and economic policy sphere in Wales. As a result, what support there was available was fragmented rather than drawn together under one strategy.

For example, in the most recent economic strategy published by the Labour-Plaid Cymru Welsh Government - the 2010 Economic Renewal Programme - entrepreneurship was only briefly mentioned once in 53 pages, illustrating that it was not particularly high on the Minister’s agenda.
In fact, the assertion that “entrepreneurship is vital for developing a strong economy and therefore crucial for our future prosperity” was not backed up with actions or programmes within the strategy and was more of a vague statement.

The result of not having a strategic focus on entrepreneurship within the Welsh Government can be clearly seen in the start-up statistics between 2005 and 2011. Whilst there was an overall fall of 6 per cent in the number of new businesses in the UK, the decline in Wales was more pronounced (−30 per cent) with a higher deterioration in the West Wales and the Valleys (−33 per cent).

Given that in the preceding period Wales had actually overtaken the UK in terms of business births through the development of a co-ordinated and coherent plan, the subsequent removal of any strategic policy in entrepreneurship clearly impacted directly on the number of new businesses in Wales.

However, since the appointment of a new Minister for the Economy within the Welsh Government in 2011, there has been a gradual reintroduction of key initiatives that suggests that entrepreneurship may be moving back up the policy agenda.

In fact, it is interesting to note that the approach of Welsh Government's policymakers has moved away from a formal strategy for entrepreneurship towards a looser approach in which there are now distinct programmes that address the different elements of entrepreneurship policy including access to finance, high potential start-ups, business support and entrepreneurship amongst young people.
More importantly, there is again a clear strategic intent to develop entrepreneurship that has learnt from the previous policy vacuum since 2005 and has now developed a series of specific interventions that are again reflecting the aims of Wales 2010 namely to create a suite of action areas and needs to support entrepreneurship.

A new entrepreneurship panel has also recently been set up to provide the Welsh Government with strategic guidance and expertise on the development and delivery of the entrepreneurship agenda in Wales. As a result, new firm formation has been increasing again in Wales for the period 2011–13, growing by 38 per cent as compared to 33 per cent for the UK. Interestingly, as there is no longer a specific European Union funded programme focusing on encouraging entrepreneurship predominantly within West Wales and the Valleys, this region has experienced slower growth (34 per cent) in business births than the rest of Wales.

The changing fortunes of entrepreneurship in Wales is best illustrated by the figure below which shows the business birth rate (i.e. new companies as a proportion of all enterprises) over the period 2002-2013.


Therefore, what this paper shows is that through having a dedicated and innovative entrepreneurship strategy, there can be real positive impacts on the economy, especially if it specifically addresses the historical and institutional weaknesses in this area and, more importantly, has a long-term view on entrepreneurship policy.

Certainly, if Wales is to continue its recent economic revival then the original principles of the original Wales 2010 plan published twenty two years ago, namely to ensure that everyone can develop their talents to the full in establishing a thriving ‘enterprise culture’ in Wales, must be at the forefront of government policy for years to come.

Doing marketing the right way

There is a common misconception about marketing: that it works as a ‘bolt-on’ if sales are a little slack whereby you can ‘do’ a bit of marketing to generate some new business. That is one way to do marketing, but it will contribute little to developing your business over the longer term if its application […]