Paul Carroll: Joining up the dots
Taxing times
Well, no agencies are in that financial league, but it all counts. Put in simple terms, an agency selling its business over the last ten years would have paid £100,000 per £million sales value in CGT. Now it will pay £180,000 per million. That’s one heck of a difference.
One of the key factors for me selling my own agency business back in 2001 was the introduction of tapered tax relief – brought in by Labour in 1998 to encourage an enterprise culture and to reward entrepreneurs.
So the new rules mean a few fat cat agency bosses are going to miss out – is that so bad? Well, yes – and not only for the agency principals but also for their staff, because with more money to be made in a sale, good business practice means that sensible agency chiefs invest more in staff, salaries, benefits, marketing and resources to hit the sort of performance levels that attract buyers in the first place. That incentive to invest is now reduced.
There may well have been a flurry of last minute deals to cash in on the 10 per cent tax rate as the April 5 deadline approached, but you can bet the new rate is going to slow down the volume of deals in the marketing sector, which is strongly represented by owner managed businesses.
That’s a shame, as it’s not the Ken Morrisons of this world – or people who’ve already sold – who are going to miss out. It’s you.
Can I help you?
The disastrous opening of Terminal 5 last week was yet another landmark in our apparent national inability to get it right first time. One might have known, after the Millennium Dome, Wembley and the Scottish Parliament, that sticking lots of enthusiastic but unbriefed volunteers in ‘Can I Help You?’ t-shirts was not the key to a successful take off for T5.
For me though, one of the more interesting aspects of the debacle was the analysis of the PR for the launch, which came under detailed scrutiny and criticism in many channels of the media.
Once a fully-fledged member of the Hidden Persuaders club, PR these days appears to be as much the story as the news it peddles – particularly when things go wrong. This time, BA got it with both barrels, as did BAA.
It seems everybody in the media, as well as the man on the Clapham Omnibus (or T5 check-in at least) is now an expert on PR and all to ready to pinpoint ‘where it all went wrong’ and ‘what they should have done’. As if the job wasn’t hard enough already.
A gruelling week for BA’s corporate communications team as well as Willie Walsh then. They’ll get over it, and they’ll learn. OK, so we don’t seem to do launches very well in this country, but I’m sure they’ll have T5 sorted it out in time for the 2012 London Olympics…
Paul Carroll, founder, Zuma011