Latest Scotsman Insider emag focuses on margin pressure hitting Scotland's OMBs

Latest OMB 100 table here >>

Few Scottish business owners need telling that margins are being squeezed. 

Our latest OMB 100, updated with the most recent accounts, puts numbers on that pressure for some of Scotland’s most important private companies.

Turnover across the list rose 6.6 per cent, but pre-tax profit fell 15 per cent, from £1.06bn to £905m. 

Combined wage bills rose £173m – more than the £160m that disappeared from the bottom line.

That final figure is the telling one, showing where independent businesses are feeling the squeeze hardest.

Owners do not have the option of standing still and they have to look inward at how they operate and outward at the partners they rely on.

Those mounting margin pressures, raised in our conversations with business owners, were why we chose margin efficiency as the theme of our latest Owner Managed Business roundtable.

The clearest message from the panel was that strong cash reserves and margin discipline are the two most important tools owners have. 

Good margins matter, but a business that runs out of cash midway through the year is not sustainable, however profitable it looks by year end.

Panellists also stressed the value of supplier relationships. 

Making it easier for suppliers to work with you cuts their costs and yours, and not squeezing them when times are tough builds goodwill you may need to call on.

There are lessons too from Conor McKenna of Glasgow merchandise firm Go Swag, interviewed in this edition. 

Its technology lets it take on more business without costs rising at the same pace and its early decision to chase only big-ticket orders laid the foundations for growth that is now accelerating.

JW Filshill has been vocal about rising staffing costs. The grocery wholesaler has responded by using data to drive efficiency.

These home-grown firms employ thousands of people. When they struggle, so does the Scottish economy.