Scamming small businesses and individuals

On two successive working days, I have experienced attempts to obtain bank details via cold calls.

The first call purported to relate to a renewal of insurance for an appliance. We did have such insurance but I thought it was up to date. I was suspicious and thought that if it needed to be renewed we would have received a paper schedule via the post. The caller assured me they were trying to save trees. I told them they could send an email, but they were not interested in my email address and rang off.

The second call was from someone claiming to represent the “Call Prevention Service”. They would prevent cold calls from abroad for a fee of £1.99 per month on a four year contract. Again I was suspicious. I asked “Surely my telephone provider would offer such a service if available?” I was told they worked with all telephone providers.

I asked for a number to call back and was provided with one before they rang off. My research on this number led me to this link, so it seems the police are aware. Whether they do anything about it is another matter, but do be careful with these callers. If anyone else in your business is authorised to deal with purchasing, banking and payment matters, do make sure they are aware too.

The tools of our business – choice, discretion and honour

Back in January when visiting the local branch of my bank, I was whisked in by the customer relations manager and offered their premium service at a discounted rate. I weighed up the benefits and agreed to sign up. It looked like a good deal.

A couple of weeks ago I had a standard impersonal printed letter from the bank’s mass mail saying that the bank had looked at my banking practices and decided that I no longer qualify for their discounted rate because I do not satisfy the conditions, which they listed. Guess what? My account charges would be going up 43%.

Now, it is important to note that the bank’s customer manager told me that I qualified for the special rate. I examined the criteria set out in the impersonal letter I had received. I have to say that I never qualified for the discounted rate in their terms because the accounts I run for three different business entities and several income streams are not managed in a way that could satisfy the requirements.

I am not pleased. Because of the benefits I thought I was getting I cancelled some insurance I had elsewhere and my existing car breakdown cover amongst other things.

I called the bank and was told there was “nothing they could do” other than apologise and register my complaint. They cannot offer the service at a discounted rate.

Now, this is not supposed to be a whinge about large organisations in general. Of course, once upon a time, bank managers had discretion to change things and fit services and charges to individual customers.

It so happens that my first job was with a bank. I accepted a job offer at a salary which turned out to be higher than the amount normally offered to someone of my then age. My new employer, or at least the personnel manager, realised the mistake but told me the bank would honour their offer, and this was all before I started the job.

As small business owners we are in a different position. We have a choice as to what services to offer at what price, and to cement our relationship with our customer thereby. Our customers still have a choice to use us or not, but as long as we can offer a valued service at a valued price we should be able to keep them.

Should something go wrong we can use our discretion to put it right. We should keep our word, our self respect and our honour by honouring our commitments. We can even get a nice warm feeling in doing so. If we stick to our ethics we can grow our small business into a big one and instill our honourable approach into our staff by allowing them discretion.

Large organisations such as banks have lost all connection with customer service through becoming remote from us in ivory towers known as call centres. They may say they need to be competitive in terms of cost, but I would not mind paying for a proper service from a bank which honoured its commitments. They should note that supermarket chains generally take customer complaints seriously and try to put things right. It is not about being too big: it is about having real customer-facing staff with discretion to act on their own initiative. Banks and mobile phone companies haven’t a clue about this.

As a small business owner I am happy that choice, discretion and honour liberate me from becoming like the banks, including mine which has just been voted the worst in the UK for customer service. Are you not pleased, but not complacent, that you are not as they are?

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Better to have a business plan than have your dreams shattered

I was shopping in our village this morning and found the butcher’s shop was closed. There was a notice in the window, presumably put there by the shop landlord, which announced that the shop owners had paid no rent since they started trading last April, six months ago.

I always try to support our local shopkeepers, especially on a Saturday when I always go the village, sometimes with my wife. It is hard-going for many local traders. We are blessed with a very successful hardware shop who seem to sell virtually anything from light bulbs through egg-timers and fire guards to those things you use to unblock toilets. The business has been in the same family for 100 years and they know exactly how to cater for the needs of local people. Recently they have expanded into the shop next door.

We also have a successful baker’s shop. They do a roaring trade in the morning and also make sandwiches for the lunch time trade from local workers from the offices, shops and the factory units we now have down the road. They again cater for a known need.

Until a year ago, the village butcher’s shop was occupied by a local family of butchers, who also own a “farm shop” a couple of miles from the village in which they sell local produce – all the usual things you would expect a butcher to sell, including game. They closed the shop last Autumn because as they told me, the overheads in the village were just too high, and whilst the shop was quite busy they were not making very much money. They had decided to concentrate on the business out of town where they owned the premises on the farm and had more control.

The sad reality is that many people now prefer the one-stop shop available at the two large supermarkets within ten minutes drive and where parking is free. In the village, unless you know where to park, you will have to find 60 pence even for an hour, which of course discourages people for shopping locally even with the high price of fuel used in driving to the supermarket.

The people who took the butcher’s shop last April should have asked themselves why an apparently successful business from down the road could not maintain their village venture profitably. The likelihood is that the rents and business rates prevented the shop from being viable. Such a shop would have to rely on a very high turnover to cover the costs, which frankly they were never going to be able to do in the face of supermarket competition, and of course the farm shop owners who were their predecessors.

It reminded me of the cafe owners in a local town who asked me a couple of years ago to help them make their business profitable. They had a dozen tables, but were paying an annual rent of £17,000 as well as a large amount for utilities given that they were cooking all the time. It was clear that they could never make a profit even if they employed no one else. The figures did not stack up and never could have even before they opened. Rents based on floor area tend to reflect a higher expectation of profit often through a turnover of higher valued items. If you have a cafe you have to have a fantastic following or be really exceptional to stand out in a seaside town with numerous similar offerings. My clients lost the business they should never have started.

The lesson is to always have a business plan. A business plan is not just something we put together for the bank to raise finance. Sometimes we have to look past our romance and our dreams and think whether we really have a shot at making our ideal business work. If we have not done our sums properly and have not thought about contingencies for our teething problems and things that go wrong, our dreams can become nightmares and our hopes can be wrecked, as well as our financial security. A business plan is not just for the bank manager, but something that has to be carefully thought out, and adhered to. It can be changed as circumstances alter, but always has to make sense, otherwise starting a business will just be a leap in the dark.

© Jon Stow 2009

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