October 2000 - Small Business News

CREDIT RECORD + INTERNET = BAD RISK

A vast number of you are requesting information as to your credit reference record and in particular, what effect are lender searches having on your record in response to applying on-line for personal loans and mortgages. Beyond doubt, on-line loan/mortgage applications are logged on your credit record with every enquiry. The credit report agencies say that application information is a way of monitoring fraud say, someone applies for 10 loans in one week and you are the tenth loan provider, are you going to pass this person for a loan? Probably not! In some cases reported to me the application is only "out of interest" with no real intent to actually take the loan. In such circumstances you will still have this application on your record should the search only be logged if finance is provided? I think so. For the record all enquiries are held for 1 year on your credit file. There are two types of searches 

1. General Enquiry

This type of enquiry produces a report on your voters role details, county court judgments (CCJs), but not credit information. This type of enquiry is used by everyone who does NOT fit the profile of a Credit Enquiry (below). 

2. Credit Enquiry

Credit enquiries are ONLY available to companies that provide two-way information being, a company that offers credit to its customers, and then provides the credit reference agency with the finance details, and any payment defaults or further finance provided. This creates a self perpetuating database of credit that cannot be accessed by any company that does not share two-way information. 

The nasty taste of the two-way arrangement is that the credit companies, banks, finance houses etc. refuse to allow access to this database which means that, say, a small business wants to search on a customer for a big deal, they will not get more than the voters role and CCJs to help them assess a credit risk little wonder some appalling credit deals are sinking businesses every day. Ask your bank manager the next time you meet why their bank insists on withholding prime information yes, cartels are alive and well in our own back yard!

TOPIC 2

10 WAYS TO GET SMALL BUSINESS CUSTOMERS

The following suggestions are not the top ten ways to gain small business customers, nor are they in any order of performance. There are too many parameters that will affect the success of using the same tactic in two different locations to say what will work do some local research. 

01. Network Groups Almost every area has a business networking group, if not a dedicated small business group. The idea here is to build up a rapport with other small business owners who, it is hoped, will recommend or use your services/product on the basis that it is preferable to deal with someone you know this has been proved to be so. Groups also provide added benefit this means that when you talk to a customer and that customer wants a product/service you do not provide, you will be able to get the deal based on your networking knowledge and connections. Your local Chamber of Commerce will be able to help you, and you may want to sign up with them. 

02. Local Newspapers If you provide services/products that serve a local community, you must have exposure in your local or free paper. The weekly cost is generally £25  a week you can decide to insert weekly at £1,300  a year, fortnightly at £650  a year, or monthly at £300  a year. Having an advert in the classified section is less expensive than having an advert in the news pages, and block booking will reduce the cost by 10 - 25%.

03. Brochures, Leaflets and Flyers Many small business owners will tell you that brochures etc are a waste of money as they very rarely bring in business by themselves: I tend to agree with that comment. They are useful for exhibitions an  envelope stuffing with the monthly statement, but struggle to carry a message to potential customers as they have   leaning towards presentation rather than the technical issues of your business. Leaflets/flyers can have a more specific message about special offers and current prices: the things that customers want to see. The presentation is not as important as on the flag waving brochure, and the customer generally has more belief in what you say due to the more basic presentation. Providing your customers with up to date information is essential, with the cost efficiency of leaflets/flyers I suggest past and current customers receive something as regularly as you can afford. 

04. The Mail Shot A mailing list is expensive, but you can argue with some list companies that you want a trial number of prospects before committing yourself to many thousands I have done this myself. It is most important that your list is as relative as possible to your target customer. You can get lists for small office, home office (SOHO) that will give you access to those needing supplies of relevant products that are used or consumed in that environment.

However, if you sell to small medium enterprises (SMEs) you will probably need to know turnover, type of business, employee numbers and profit & loss details to enable you to target, say, turnover between £1 - 5m , under 20 employees, and in profit, to supply office lease equipment. Cost is the key to successful mail shots. With an expected response of about 2 - 10% you have to mail a significant amount of prospective customers. To get 100 responses you need to post between 1,000 - 5,000 letters thats £600  for stamps alone, using an average of 3,000 mail shots. The other resources headed-paper, brochure, envelopes and time, easily brings the total to £1,000  for 300 responses - being a cost of between £3 - 10  for each lead. Almost every product has a customer user/buyer statistical breakdown if you know this, you can improve sales drastically. Its about good research, and knowing your product and customer. 

05. Partnerships The Internet has brought us a staggering phenomenon partnerships and affiliates. Previously, most of us were unconcerned with competitors or aligned services, as such we were not inclined to promote an outside business/product/service that we had no stake in. Now, if you do not have a working relationship with another company you are being inefficient and ineffective! This phenomenon is not the sole domain of the large company it works just as well at the small end. Look at Credit to Cash, we work with the smaller company but our services are as good in terms of cost and service as any major company we are a large concern when we work together with the added benefit that we provide expertise in all of the services provided. Do you know of businesses similar to yourself who have to turn down work due to having too much? I do. I told a friend to pop in and see the boss and ask about taking on this work they are now both busy, and friends (not bad considering 9 months ago they were competitors). 

06. Calling Card Wherever you go you should always leave your mark be that Monday morning or Sunday afternoon. Always have a business card to hand, or a brochure if necessary. If you deal with email make sure your signature makes it very clear what you do and where you can be contacted don't worry about overkill. A letterhead is a must, and so is a compliment slip for attaching any number of items. 

07. Telephone Sales This is not for the faint hearted or highly strung! Learning to accept constant rejection is an ability far beyond most of us. So, I suggest paying someone else to do it either in-house by a trained employee, or out sourced to a marketing agency. If you have a product and business that can pay £20 - 30  a lead, resulting in ten leads for £200 - £300  you should make a good return on a product costing £800 , and further sales will not incur this cost. Likewise a product costing £400  would not be viable unless you used an in-house employee who also doubles as an office worker the dual role is also a necessity as eight hours a day telesales will result in one less employee working for you! 

08. Newsletters We seem to have forgotten that newsletters did not derive from the Internet, they were always here. Similar to a mail shot, however, a newsletter is about informing and not selling (well not quite so openly). Few of us would welcome a newsletter that was designed to get sales but knowledgeable news is received with interest. I am only too aware that the readers of this newsletter want interesting and relevant knowledge and not information on our products :))

Compiling a monthly one page newsletter that you post or email is fairly easy once you get used to the format and content. You would not sit down at the end of a month and think about what to write, you collect information over the entire month you may find you have too much information and that half of next months newsletter is in hand. Look about you for your initial list of mail outs local papers, directories in library, names from friends, friends  of friends, TV, Internet, endless names... A newsletter says that you are an expert someone who has an opinion, that you are approachable, that you have answers, that you always strive to find a better way for yourself and your readers - this is why good newsletters reach far and wide, and hopefully repay your time and  resource with sales.

09. Monthly Magazines and Trade Journals  They say that buyers have to see an advert 11 times in the paper media, with that reducing to 7 on the Internet, with specialist magazines/journals somewhere in between. This means that most small business owners immediately look at cost not surprisingly! At best, a reasonable advert in a monthly glossy would cost £400 , with an annual cost of about £4,000  after a discount. As readers want to buy services/products from brand names, the least they expect is to be familiar with your advert. If you are looking at testing in a glossy the minimum period must be three inserts, unless you have a business that sells brand named products and your advert offers great savings, performance etc. Utilizing the notes in number 10. (below) is an answer to the question of affordability and a way of showing added value in your partnerships.  

10. The Internet It could be argued that the Internet does not belong in this list as it is time and cost consuming to have even a small degree of success. That said, the Internet can still be a generator of customers (and not a fancy brochure) if using number 01. (above) with the intent on pushing a number of businesses of mutual and relevant added benefit, and of course sharing the building and marketing costs. An example a plumber, an electrician, a gas fitter and a general builder could create a regional web site that is geared to these four services. Further, whoever has the greatest share of business can have, pro rata, the biggest share of the expense, as is only fair. The Internet has more opportunities for small business than we currently see and those that have the drive and desire to create a business presence will succeed.

COMPANY REPORTS 

First class reports, county court judgments, turnover, cash flow, directors and lots more 

information to help you make the right decisions. Don't trust to luck with credit: invest in knowledge. 
Company Reports

QUESTION AND ANSWER  
 

CAN I INFORM CREDITORS I'M A GOOD RISK?  

QUESTION  

I have £1,400 outstanding on an old (closed) credit card account and several bills for rent arrears, gas bill, electric bill, etc. I lost my previous job in February and got a new one in August. During that time my landlord took me to court because the Benefits Agency did not pay my rent on time (now have CCJ and still have some arrears). Credit Card company got CCJ as well. Need help cleaning up credit record and resolving current debt liabilities as am now married and would like to start credit afresh. Managed to get credit from *NAME REMOVED* (not much but it's a start) Can the CCJ be removed? I applied for several loans a few months ago (when I got my new job) but to no avail. I resume that those searches will be on my credit record - is there any way of adding to my credit record to show that I was not over-extending my credit (which is what potential lenders will think when they see all those searches together, I presume).  

ANSWER  

The CCJs cannot be removed but you can apply for a Note of Correction if you want to have a note attached explaining the circumstances of the debt you can request (by legislation) a note of correction. The note should not be more than 200 words and must not be incorrect, defamatory, frivolous, scandalous or unsuitable. Loosing a steady job or suffering illness/injury are good reasons for sending a note - going off the rails would not get much of a hearing. You need to send your letter (correction notice) to the credit agency (Experian and Equifax) who will attach your note to your credit file for all credit enquirers to see when looking at your credit file. If the credit agency believes your correction notice to be unsuitable they will contact the Office of Fair Trading for a ruling as to the next move i.e. they say that the correction is fair, or they rule that it is fair to decline the correction or part of it etc. With debts of £3,000  you are unlikely to get much cooperation from your creditors when the average debt at present is nearer £10,000 - 12,000 .
 

You can now place debts with us on-line: DEBT RECOVERY NO COLLECT = NO FEE 
A simple, tried and tested form can be completed on or off line and then submitted at the press of a button. 

TOPIC 4

BITS & PIECES

BOO.COM BACK IN A FASHION AFTER LIQUIDATION

The most spectacular business failure in e-commerce, Boo.com , is returning to the e-marketplace as a fashion community web site, but not as a retailer. Boo.com will try to build a community of fashion with chat rooms, surveys, message boards and polls. The site will also link to 250 items on fashion retailers web sites (changing regularly) as away of earning revenue. LINK

FREE WORD 97 ON-LINE TRAINING

As any small business owner knows, there are not enough hours in the day - which has always made it hard to find time for vital computer training. In the book Business @ The Speed Of Thought, Bill Gates said, "Multimedia streaming technology is a great tool for self-paced training. On-line training has been really popular at Microsoft" it says on 21stlearning.coms web site and I tend to agree with him after seeing how this works in practice. There are over 120 multimedia courses that can be delivered directly to your desktop, video-style. The free Word 97 on-line training course can be accessed once you have looked at the demonstration worth the 10 minutes it takes to know what the future of training is all about. LINK 21stLearning.com 

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