October 1999 - Small Business News

Last week we reported AOL's offer of 1p per minute, 24 hors a day. This weekend BT BT and Freeserve Freeserve spent a fortune in response. For £11.99 per month BT are offering 3 free hours each month, they also offer "simpler lower prices (5p minimum call charge)4p 3p 2p 1p"

(Ed: sounds like national rate through to local off peak to me!).

The following is an excerpt from the Freeserve site:

   "Freeserve offer 10 free hours if you spend over £10 each month on national or international calls, and you can also save 10% on BT standard rates. You can now claim up to 10 hours worth of free Internet time per month with our new service called Freeserve Time. Not only that, but you save on other phone calls too. Once fully registered, all you have to do is dial 162 before making your day-to-day national and international calls. This will save you 10% on standard BT rates and qualify you for your free Internet time. If you usually spend between £3 and £9.99 per month on national and international phone calls, you will get 3 hours free Internet time.

   If you usually spend £10 or more per month on national and international phone calls, you will get 10 hours free Internet time. This free Internet time can be used at weekends and evenings.

   With Freeserve Time, you keep your existing telephone number and remain a BT customer. All you need to do is remember to dial the prefix 162 before national and international calls, whilst continuing to use BT for your local, mobile and premium rate calls. Every month you will receive an e-mail with a bill attached. The bill will itemise your 162 calls and show the free Internet time that has been credited to your account. Payment for your 162 calls will be collected by Direct Debit every month.

   To qualify, you must be a Freeserve member and be an account holder with BT. Please click on the links below to access our Frequently Asked Questions, further details or proceed to register now."

(Ed: I have received and set up my AOL software. No problems to report, compatible with my other Internet accounts. I think we are watching the first round -won by AOL?- I also think there is a long way to go, especially from that scrooge BT).

Banks are understanding (slowly) the value of Internet customers. After Egg (the Prudential's exclusive on line bank), we now have Smile (from the Co-op) launching this 28th October. Smile will be offering 4% interest on credit balances, £500 overdraft with no set up fees at a rate of 0.79% a month interest. As with the new war on Internet telephone costs, the banks will have to offer better deals than they have

in the past. 'High street' bank accounts will surely shoulder the cost of the better Internet deals!

The following figures are the Internet customers for the top five banks, sourced from The Sunday Mirror:

                            Barclays           1 million   Citibank         30,000

                            Lloyds TSB      90,000     Co-op             30,000

                            Royal Bank of Scotland    50,000

The True Cost of Merchant Services

A number of companies have entered the Merchant Services market as a one stop e-commerce solution, however, all is not what it seems! The companies offer you "the chance to accept credit cards and sell your goods/service world wide in a matter of days".

Although this claim is possible, it is highly improbable. You will need to apply to your bank for an Internet Merchant account (even if you have a current Merchant account for mail order). If you do obtain the authorization to trade on the Internet you may find the cost prohibitive to your profit margins. The company offering the one stop solution will charge you 2-4% of each deal, with a set up fee from around £500. The Merchant Services will also charge 2-3% per deal, again with a set up fee if you do not bank with their bank.

MARKETING

Spend a Penny at 'go to.com'

The following is an article I recently received. If any of you are selling world wide on the net, and looking for a reasonable marketing avenue this article is for you. As a sourced article you will have to put up with the hype language):

1                    -0-              -0-         -0-

2                 154             $24         15 cents

Keep in mind these are targeted prospects who clicked (my link) after searching for key words related to my site. Being included in Netscape's Netcenter search has greatly increased the number of people who are searching at GoTo each day. Here are my 4 secrets for drawing over 1,000 visitors a month at the GoTo.com search engine.

SECRET #1 Try Several Keywords and Phrases 

Select a variety of words and phrases that best describe your website. Think of words potential customers would use to find a business or product such as yours.

SECRET #2 Use Highly Searched Terms 

GoTo provides a listing of top search words if you need help finding words. You'll get more traffic bidding on popular words (that large numbers of people are looking for) then by selecting words that are seldom searched. But only choose words that are related to your site.

GoTo let's you write your own descriptions. Tell a prospect why they should visit your site. Ask a question or include web known attracting words such as Free, Discounts, Specials

and other tempting choices to get them to click. Try using different descriptions for several of your bid words.

SECRET #4 Bid More Then 1 Cent

How much is a customer worth to you? That will depend on your own product or profit. Many top bids can be purchased for under 30 cents per click although words such as "marketing" or "promotion" may run as high as $2. I am finding penny bargains on MLM or referral words

(for my own personal sites). Fewer people are bidding on these  type of words. You don't have to be a #1 choice but the closer you are to the top the greater are your chances of getting clicks.

TIP: 40 listings are displayed per search page. Bid high enough to be included on the first page. GoTo will never replace Yahoo or the other main search engines. It is an excellent way to learn about drawing search engine traffic. Once you discover which words and phrases work at GoTo, you can apply these same terms at other search engines. You can't bid for top placement at AltaVista or Excite but knowing which words are most valuable will help you attract more visitors at any of the major sites. GoTo has brought me over 1,700 new visitors at a very reasonable price. I highly recommend it for all webmasters with any size advertising budget.

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Microsoft Year 2000 Compliance Summary

The Microsoft Year 2000 site will give you an extensive report on all of 'your' installed Microsoft applications, through their on line wizard. Whatever other test product's you have used it would surely be of benefit to run your applications through the wizard.

If you have never received a New Business Starter Pack from the high street banks I would strongly suggest you request one. Like newspaper media packs they can be a source of great ideas. Unfortunately, the following bank web sites are difficult to navigate, as such a telephone call is best (and free).

Nat West 0800 777888

Lloyds 0800 0560056

This week we will explain the basics of the balance sheet. The numbers preceding each category are relevant to the notes following the Balance Sheet. The numbers in brackets (3) represent a minus figure.

A Balance Sheet (BS) is a financial statement at a given point in time. The BS will show you how the company is funded i.e. in Capital & Reserve by current trading profits and capital invested by the owners, and how the funding is currently being used i.e. stock, debtors, buildings, cash etc. 

The fundamental, and permanent situation is that 'Net Assets' (No.17 that represent how you are using the funding), must equal 'Share Holders Total' (No. 21 representing where the funding comes from).

1. FIXED ASSETS: 2. Tangible = land, buildings, plant, machinery, fixtures & fittings

                                3. Intangible = goodwill, development costs, licences, patents,     

                                    trade marks, web site domain names

4. CURRENT ASSETS: 5.6.7.8.

Stock, work in progress, raw materials, debtors, cash at bank & in hand, pre payments, short term investments.

9. CURRENT LIABILITIES: 10.11.12.

Trade creditors, short term bank loan & leases & other finance commitments (under 1 year), overdraft, advance/corporation tax, PAYE & NI, VAT.

13. NET CURRENT ASSETS: Otherwise known as 'working capital', this figure represents your ability to meet current cash needs, and is not an indication of your profitability (see profit & loss account). Cash flow management concentrates on this figure more than any other. If you have a negative figure you are technically insolvent. If you calculate that your company cannot get this figure into a positive position, and you have no other way of raising cash (i.e. by selling an asset), you should seek the services of an insolvency practitioner: through your accountant.

14. TOTAL ASSETS: This figure represents all assets, both fixed and current.

15. CREDITORS: 16. Amounts due after one year. This can represent a bank loan, a finance agreement or a lease. The figure in this section does not show the amount due in the next 12 months under a loan, lease etc (the next 12 months is shown in 9. Current Liabilities).

17. TOTAL NET ASSETS (LIABILITIES if insolvent): This figure represents all assets, less all liabilities.

18. CAPITAL & RESERVE: If No.17 is a positive figure, then that figure is the amount of wealth that is owned by the owners of the company: the share holders. The share holders can either take a divided (i.e. for each share held, an equal amount of money per share is paid, or the full amount can be kept in the company as retained profit, and thereby help finance further growth: or a mix of the two.

19. Profit & Loss Account (P&L). The cost to manufacture and deliver your goods, or to supply your service, will be listed within the P&L account (you will notice that all the areas in the BS have nothing to do with the day to day running of a business as these are only shown in the P&L account). If, after supplying your service or goods, you make a profit

the P&L will show a positive figure that will then be entered in No.19. 

20. Share Capital. This is the amount of finance that the share holders have put into the business - like a loan to the company.

21. SHARE HOLDERS TOTAL: this figure will always be equal to 17. Net Assets. The worth in the company belongs to someone, not a penny more, nor less.