The danger of bad advice

Last week I heard a familiar tale.

A recruitment company has just signed up to an invoice financing deal and quickly found that they are being hit with all sorts of charges as well as being unable to draw down sufficient cash due to restrictions 

They were placed with this lender because their accountant informed them that he had a “special relationship”. 

Yes really.

The special relationship is of course nothing more than the fact he gets commission without having to do the legwork to explore the market. No doubt he gets a few nice days out too

There are 40 or so lenders in the invoice financing market. They vary enormously on terms and facilities. Maybe this accountant can do some maths

The maths are? The chances of his client getting the best possible deal is one in forty. Or 2.5% 

The client is stuffed and the accountant has received commission for frankly doing very little. I would also suggest that his ability to negotiate and find the best solution would be minimal. 

That takes time and resources as well as a constant exposure to an ever shifting market. Its also enjoyable too. Finding a real solution for a borrower is very satisfying.

And yes that is my role

But if you were this client what would you be thinking? If you knew? 

And where would you tell the accountant to go?

 

 

Cameron and small businesses

/>http://www.theguardian.com/politics/2014/jan/27/david-cameron-green-regulations

Few would argue that less regulation would be welcomed by small businesses. I am of the view that it is a natural tendency for authorities to impose regulation as a means to justify their existence (or just give them something to do some might claim) and certainly their are some politicians who seemingly believe that everything is resolved by another form

I always keep politics out of this blog and it should be remembered that whilst it would be easy to point the finger at the Harriet Harman’s of this world and their proposed small business gender equality forms, the right also has its less than thoughtful moments. Look at the media coverage of UKIP’s last manifesto

Also a closer look at Cameron’s proposals leave me to believe that these are very fringe environmental planning rules which will affect very few businesses and even then, to a very minor level. 3000 regulations sounds substantial of course . But it also makes a good headline

London on Fire

One of the benefits of being self employed and working with great flexibility is being able to work where ever you desire. Perhaps my favourite “office” is the members room at the Tate Modern. And with views like this (taken with my phone today), you can see why

No tears for this failure

http://www.insolvencynews.com/article/16537/corporate/controversial-lender-collapses

Consolidated Finance ltd have gone into administration. 

n a 2013 court dispute between two former customers of Consolidated Finance and its sister firm the Bankruptcy Protection Fund, a judge lambasted the business for the high interest rates it charged despite securing its loans against equity held in the property of its customers

The RT. Hon Sir Stanley Burnton said that this practice effectively wiped out any risk Consolidated Finance faced, as it only lent if the bankrupt customer had sufficient equity in their property to secure the loan repayments and the charges for their services.

The Bankruptcy Protection Fund was subsequently wound up in August 2013 after the Court of Appeal ruled that the loan agreements were not drafted properly by sister firm Consolidated Finance Limited and were thus unenforceable.

Both businesses and a non-trading subisidiary called Alpha Mortgages Manchester – all run by an individual named Christopher Holmes – were also subjected to sanctions from the Office of Fair Trading in 2010.

In a statement issued by the OFT at the time, the regulator criticised each business over a lack of transparency in its dealings with customers and for failing to adequately outline the risks involved in taking their loans.

It also said the companies had also misled consumers about cancellation rights and, in one instance, failed adequately to take account of the needs of a consumer with limited mental capacity.

Good riddance And i hope their homes are repossessed

 

Statutory Demands. Not in dispute

The blunt instrument of the notorious Statutory Demand can recoil badly if the claimant does not properly evaluate the debt in question or receives poor advice

Heres a good article explaining why

http://www.debtscotland.com/news.cfm?utm_medium=email&utm_campaign=Personal+Data&utm_source=theemailservice

This resolves around the issue of disputed debt. That is of course just one consideration but vital all the same

In essence, if you try to force a resolution to a dispute using a “stat demand” you are wasting your time and money as well as increasing your risk

Homebase. And the future of retail

Visting Homebase is not an experienced to be savoured. The attached picture is of a false fire alarm at a store but last Sunday it could well have been a real one at my local branch. I would have happily burnt the place down.

Two tills opened at a peak time with ever lengthening queues and gormless staff standing around. This is a retail experience to forget.

Is this retailer in any way aware of the competition out there?

No effort was made to placate increasingly angry customers and this is from being an isolated experience at the Twickenham branch. I simply dumped my basket and left but the key to this is that there is an enduring attitude with this retailer that under no circumstances should you be able to go straight to a till and be served immediately. Frequently no more than a single till is opened for what is a massive store. Which is incredible

This is no doubt down to some staffing “initiative” driven by bottom line obsessives but the damage is done

Its quite simple isnt it? You may have to wait a day or two for a delivery from Amazon or John Lewis but how long does it take to confirm your order? Amazon “one click” or standing in a long queue in a dated tired store with zero added customer service?

That is what Homebase is up against and whilst other retailers have woken up and responded positively, this frankly dismal and badly run chain is stuck in a timewarp 

And here are some others experiences

http://www.trustpilot.co.uk/review/www.homebase.co.uk

The Late Payment Code. “Toothless”

http://www.ibtimes.co.uk/business-brands-prompt-payment-code-toothless-ineffective-1432142

A study by Sage has come up with the following

Barely any firms have faith in the “toothless and ineffective” Prompt Payment Code (PPC), a set of guidelines on making payments that businesses can sign up to and display an attached kitemark of approval.

The Sage survey of 572 businesses found that 84% had received payments delayed by 30 days or more, while 57% said they had received payments 90 days or later than the agreed deadline. Moreover just 1% of firms said the PPC was “extremely effective” while 38% said it was “ineffective”.

Big businesses were the worst late payment offenders, accounting for 46% of the delays. Next was small firms at 16% and then the public sector at 13%.

I dont know what the SMEs are complaining about. They have the governments Supply Chain Finance scheme to fall back on

Of course they do

Sarcasm apart, these results should not surprise although only 1% finding the scheme to be “extremely effective” is a quite stunning rebuttal. 

So “what can be done?”. Frankly no one in the political spectrum has any real idea and that is probably because an improvement  is not easy to define and is probably best achieved by incremental steps rather than a rather pointless headline grabbing “initiative”.

And what steps can be taken? I will let you know shortly

 

Shame on Adidas and Nike

http://www.standard.co.uk/news/london/small-sports-shops-face-ruin-as-nike-and-adidas-axe-supply-9036651.html

Suppliers can supply to who they want to and on whichever terms they see fit. There is no question about that but the moves by Adidas and Nike to cease supply to smaller retailers unless they hit certain turnover targets is a huge blow to independent retailers

The reason given is that such supplies are uneconomic. Really? So long as a profit is being turned, it’s hard to see why that should although it is perfectly possible to deem many transactions as “uneconomic” simply by applying measures in a certain way.

More salient may be the inherent credit risk but it is hard to believe that insurance is not in place

What can be be denied is that this further swings the power of retail towards the major chains. It’s hard to defend that as a desirable development especially in an age when the high street is becoming ever more barren. This feels like a faceless unnecessary “cost of everything, value of nothing” ill thought decision. They should know better