Posts for July 2012

Meet Dave - the bank manager with a difference

Could the reputation of banks sink any lower?

Outrageous bonuses and revelations of mis-conduct dominate headlines. At the same time, money is still being pumped into the banking sector — coming from us, the taxpayers, and printed by the Bank of England. It’s all part of the Government’s plan to get banks lending to businesses again.

But it just isn’t working. This week’s Trends in Lending figures show that loans to small businesses have fallen again and the Federation of Small Businesses (FSB) continues to highlight the “computer says no” culture in banking as four in ten SMEs are refused credit.

Enter Dave Fishwick

Dave Fishwick is an entrepreneur from Burnley. And he has a dream — to open a bank that will give savers a 5% rate of return and which will lend money to local small firms that cannot get funding anywhere else.

At first glance, Dave is not the obvious candidate to shake up the banking system. Let’s just say he’s not your typical bank manager. But when you’re looking for a revolutionary, you need someone with passion, a straight-talker — above all, someone who never takes no for an answer.

Dave is your man. And by the time I finished watching the two-part Channel Four documentary, Bank of Dave, I was convinced Dave could single-handedly turn around the fortunes of the whole country.

What’s so great about Dave Fishwick?

1.   He’s a successful businessman

A self-made millionaire with a minibus firm, Dave has two rules in business — rule one is “never lose money” and rule two is “never forget rule one”. He set up the Burnley Savings and Loans (shades of Jimmy Stewart in It’s a Wonderful Life) and — legally unable to call it a bank — he gives it the genius slogan “Bank on Dave”.

2.   He’s straight-talking

Dave tells it like it is. There’s a fair amount of colourful language but he’s so charming — and anyway his message resonates with everyone he meets — so he doesn’t offend. Not surprisingly, the high street banks get regularly trashed by him — “all they’ve done is s**t on people”.

3.   He never takes no for an answer

An entrepreneur, according to Dave, is someone who turns no’s into yeses. Trying to get a banking license from the FSA is a monumental challenge though. Banking guru Andrew Hilton tells him he’s got “no chance” and that he needs £50 million just to open. Hilton also suggests that Dave’s ambitions are “above his station”. Boo hiss. Dave looks crest-fallen for a few seconds but then he’s back up and running, telling his solicitor, “It’s going to be a bank and that’s that”.

4.   He’s a nice guy

He buys his customers cups of tea and coffee as they queue, he offers his small business customers valuable advice as well as a loan, he sings in the car and he’s fond of a chip buttie.

5.   He focuses on the things that matter

Dave’s main ambition is to lend money to small firms so they can grow. His branch in Burnley is basic but it does the job. What he loves to do is get out there and meet the people and lend them the money they need. There’s £185 for busker that needs a new amp, £1,000 for an internet firm and £75,000 for an outdoor pursuits company. A struggling café gets money to improve its kitchen and sees business soar. A tropical fish superstore wants £5000 for a shark tank and £500 for three black-tipped reef sharks. It sounds crazy but the idea is to create an attraction to draw in more customers — and it works.

6.   He challenges the rules

Getting a bank licence proves impossible — the FSA refuses to meet him — but he finds a way around it. He gets a consumer credit licence so he can lend money. Then he finds a clever way to take deposits from savers by linking the savings to the loans. Finally, he takes out insurance so that if Burnley Savings and Loans were to go belly-up, there would be no need for taxpayers to bail him out.

The day of reckoning arrives, six months after he starts the venture. The figures from the accountant are in. They show that Burnley Savings and Loans has made a profit of £9,511. Dave is delighted. “Chip butties — come on, let’s go”.

Then he walks out of his tiny Burnley branch and straight into the nearest charity shop where he gives the astonished ladies at the till a cheque for £2,000. Continuing up the high street, he hands out the rest of his profit and a bit more to several other charity shops.

It’s banking, but not as we know it.

The golden rules of using Facebook for business

Barely an hour goes by these days without some multinational brand desperately appealing to you to ‘Like’ them. Admittedly, this is on their Facebook page rather than them wanting to join you for drinks, but with an estimated 845 million global users, Facebook popularity for a business is now directly linked to its turnover.

But is Facebook just another marketing domain to be exploited by corporate heavyweights or can it work for new business just as well? The answer is no and certainly yes – if you do it right.

Creating your page

When creating a Facebook page for your new business, make sure the basics are covered:

• Great visuals – a picture prompts a thousand Likes. Make sure the visuals demonstrating your new business are strong and attractive. No holiday snaps (unless you’re selling holidays).
• Call to action - Place a clear call-to-action graphic in the landing tab, this will help getting more "Likes" from your visitors.
• Check your competitors – Look at what other businesses/competitors are doing with their pages. Mimic the good and mind out for the bad.
• Make sharing easy - Add an "Invite Your Friends" Box to your page enabling your visitors to instantly choose some of their friends and send them invitations to your page.
• Make purchasing easy – If you’re selling products online, constructing your page to be a one-stop shop for customers to interact, engage and buy.
• Join your forces – To maximise awareness and interaction of your new business, link your website to your Facebook page and vice-a-versa.

Finding customers

Your idea is formulated, product/service offering ready, logo designed, website constructed and Facebook page created. All you need now are customers and the beauty of using a ‘social network’ to find them, is that, if you’re already a private Facebook user, you very likely have a good-sized network already that likes you.

For anyone starting a new business, you must use all the tools you’ve got. Don’t be afraid to ask people to help you out and give your new product a try. Why does this work? Because those people with whom you share your life story on Facebook already trust you. There’s no target audience to build. No reaching out to other people in your niche, trying to gain recognition. Your friends will support you. They’re your friends, after all and if they ‘like’ what they see, then suddenly your new business reaches the eyes of their friends and so the social network beings to do what it does best – to network.

Getting engaged

Once your network is up and running, don’t bombard people with constant, well-worn sales pitches but rather engage them with your insight, offers and industry expertise.

• Create a resource – By including well-sourced and relevant industry information and comment on your page, followers will come to recognise you as a lot more than another shop or service provider.
• Interact with your customers – Whether it be offering discounts, reacting to customer comments, requesting comment on new product lines, initiating light-hearted debates or posing thought-provoking questions, engage your followers and they will readily spread the message of your business.
• Handle criticism carefully – Remember, Facebook is an open forum, so any negative comments posted on your business Facebook page by disgruntled customers must be dealt with ‘in public’. Problems that are seen to be being dealt with swiftly and compassionately reassure potential customers. Never be tempted to delete negative customer comments – it will invariably come back to bite you.

To Facebook or not to Facebook?

 A well-executed social media strategy can offer you the chance to engage with untold numbers of potential new customers and provide them with a valuable insight into your business ethics and character. When it comes to consumer decision-making, the importance of these factors should not be underestimated.  What you are meticulously cultivating is that illusive animal - consumer trust.

We all buy from brands we trust. Maybe we trust that they will give us the very best value, or perhaps we trust that they know more about what looks good to wear than we do, but we buy from them, and return to them, because we have, for one reason or another, formed a positive association with what they stand for. So if your new business is almost ready for launching, if you haven’t already done so, be sure to create your Facebook page.

Ken Eden is MD of WebEden, an independently run, London based, web Software Company.

10 key tips on avoiding and chasing late payments

A report published last year by Banks automated clearing system (Bacs) suggested that half of all SMEs are experiencing late payments and waiting an average of 28 days beyond agreed invoice payment dates.

Poor cashflow is the biggest reason businesses cease trading, so we’ve put together ten key tips on chasing late payments.

1 Know your customers

Running credit checks on new customers may sound underhand but it could save you valuable time and money in the future. It’s now possible to run quick checks online. This isn’t confined to new customers – if you have reason to suspect an existing customer may have problems paying their invoices, checking their situation may also be prudent.

2 Be clear about your payment terms

Make sure your payment terms are included on every invoice you send and keep them consistent. Additionally, outline your terms verbally to new customers. Be clear about timeframes, costs associated with late payment and acceptable payment methods.

3 Avoid cheques

Encourage customers to pay using cash, electronic transfer or Direct Debit. hearing ‘your cheque’s in the post’ won’t help your cashflow.

4 Choose the right people

Make sure people on your credit control team are equipped for the task in hand. They should be firm but polite, resilient and organised. It’s also important that they enable, rather than impede, future sales.

5 Make a courtesy call

If you’ve issued a customer with a large invoice, call them up before payment is due to make sure it has been received and there is no query. This is good customer service and pre-empts any possible delay in payment.

6 Start chasing right away

Don’t delay in chasing a late payment from the day after it was due. The longer you leave it before you contact your customer, the further down the queue your invoice will drop.

7 Claim interest

You have a statutory right to claim interest on late payments at 8% over the Bank of England base rate. Additionally, you can claim compensation for debt-recovery costs. Letting your customers know this as early as possible may encourage payment.

8 Be flexible

On large, outstanding amounts be prepared to offer flexible payment terms. Whether this means regular installments or simply splitting a bill into two manageable chunks, in some circumstances it may be your best chance of payment.

9 Don’t let the problem escalate

If you haven’t received payment, stop supplying the customer immediately. If the customer needs your product or service to run their business, cutting the supply may be exactly the leverage you need to secure payment.

10 Use a debt collection agency

As a last resort, employ a debt recovery agency to act for you. Agencies will often work on a no recovery no fee basis, however if the debt is large the percentage commission can be substantial.

By Gareth Underwood, of Sage software

• To find out how Sage can help with your finances call us on 0800 44 77 77 or visit sage.co.uk/finances

A handy HR checklist for November and December

With winter almost upon us, now is a good time to plan for the final few months of the year. Here is my handy HR checklist of things you should be thinking about over the coming months.

November 2012

• Make sure that staff have taken all of their holiday entitlement for the year, so that you minimise the number of holidays being carried forward.
• Review the training budget and consider whether all the training plans have been met or not.  Is it time to consider different or more training to boost skills and morale during the dark months?
• Consider offering flu jabs to employees or at least promoting the benefits of flu jabs to your team to help reduce absence through the winter.

December 2012

• The festive season is upon us, but it’s also important to remember those who don’t celebrate Christmas who may have their own religious requirements.
• This is usually a joyful time to celebrate, however for some it can be difficult personal time, so get to know your staff and bear this in mind.
• Many of us like to celebrate with a drink at the office party, but remember to take care of employees, make sure they get home safely and remember you need to set a good example.
• Thinking ahead for next year, you may need to consider salary reviews for 2013 and the benefits package that you can offer your team.
• Some benefits, although a benefit in kind, can be cost-effective to the business.  For example, private medical care, dental care or gym membership will also benefit the business by minimising disruption through absence and by promoting healthy lifestyles.
• There are also salary sacrifice schemes, for example, childcare vouchers or bike-to-work schemes, which can offer tax efficient benefits to employees.