Archive for October, 2011

Last month, I went on holiday to China.  It was a good holiday. It was a great holiday.  But I was puzzled about the flights to and from China.

I flew with British Airways both ways, and noticed that the plane was 25% empty.   Economy was packed – not a free seat to be had, but premium, business and first class were practically empty.   Not surprising I guess, seeing we are teetering on the brink of another recession and people are cutting back.

But what surprised me was this – why were BA not upgrading passengers?  By moving people up one or two grades, they could get more people in the plane and therefore could make more money from the flight.

What is the cost of the Upgrade?

Ok, so maybe I am being optimistic.  After all, upgrading somebody from economy to business is just throwing money away.  Isn’t it?

But hang on – what is the real cost.   The fuel used is the same.  The cost of handling the passenger and their bags are the same.  They still have to have the same number of stewards.  The plane is going there anyway.   So what are we really talking in terms of cost to BA?   A better meal?

And what about the advantages?  They can fit more people on the plane, the flight is greener (more people equals better fuel ratio per flight/person), the stewards in upper class are not so bored.

But the real advantage is that people who only ever travel economy may find what they are missing from travelling premium or business.  They may like it so much that they may decide to travel in that class in the future.  In a nutshell, it’s a great sale at minimum cost.

Can you give a free upgrade?

So with things being as hard as they are, is it worth thinking about whether you can give a free upgrade to your own customers?  If things are fine and you are over busy, then that’s all well and good.  But if you have spare time on your hands, is there something else you could offer as a free upgrade?

What about the rights to the source code, or designs, or web content?  What about the test data you produced, or access to the specifications, or some after sales support?

Of course, the customer has to know they are being upgraded for it to be worthwhile and seen as good value.  Just handing it over is not enough.   But saying, “here is the agreed delivery, and as a special treat for your business in these difficult times and as a way of saying thank you, please accept (whatever you are giving them)”.

Point out this is provided as an upgraded for this time only, and that you normally provide this service/feature/benefit as part of your premium service.

You never know, your customers may like it up there in the expensive seats and decided to fly your premium service from now on.

Let me ask you a question?  What is the worst thing that could happen to your contracting, freelancing or small business?

I would imagine right up there with going bust and being sued is a visit from the tax man.   It’s never happened to me (and touch wood never will), but we all know that when the HMRC (or whoever your particular taxman works for) comes-a-knocking, we better have good records to back up all our business activities.

But do you really want all that paperwork floating around or sitting in files taking up space?

Paper Vs Electronic Storage – the UK Law

Following the UK Electronic Communications act 2000, an electronic form of document is deemed sufficient evidence in law.  That goes for contracts, agreements and of course receipts (seek your own legal advice to be sure).

This means if you have a scanned copy, then that is good enough for the taxman.  This also means you no longer have to store paper copies of everything.

Scanners and their problems

However, there is a problem in transforming everything from paper into bits and bytes.  When you go out and buy a dedicated scanner or multi-function printer/scanner, the device does not know what you are scanning.  It doesn’t know if that page of A4 is an invoice or a purchase order.

Scan all your invoices, receipts, orders or contracts and all you end up with is a big mess of PDF files named SCAN0001.PDF, SCAN0002.PDF and so on.  Whether you scan to JPEG, TIF or PDF – the sequential numbering of files generated actually makes the problem worse.

How do you find that critical contract when you have 5,000 PDFs and they have file names of SCAN00001 through to SCAN05000?

If you are lucky and prepared to spend the money, some scanners will perform OCR (Optical Character Recognition) on the documents.  Whilst this will slow down the scanning process, it does mean you can Windows (or Mac) search the PDFs for a known phrase.  But what about if you don’t know what text was on the contract?

There is a solution.

Decent PDF names

Over time, I have come to find that scanning to a PDF is the best option.  PDF scans will deal with multiple pages and front/back scanning (the term for this is Duplex) a lot better than scanning to a graphical format such as JPEG or TIFF.

Assuming you also want to scan to PDF, there is a free utility available created by a chap named Michael Weiner which allows the batch renaming of PDF files.   The great thing about this utility is that it cycles through all PDFs in a directory, displays them on screen, asks what you want to call it, and then renames the file for you.  The utility can be downloaded free here.

The way I scan my documents is that I scan any documents on receipt (or save received PDFs) to a directory then each weekend I quickly run through them using this utility, giving them decent names.  Once renamed, I then file them away.

Incidentally, I also save invoices and notes that are emailed to me in the same way.  I simply print any documents received to PDF (using the Free CutePDF virtual printer).  This installs a new virtual printer on your computer and you can then print any format of document to a new PDF file (via printing to the virtual printer) which I then save in the same location.

Storage Options

Once you have your collection of PDFs, what to do with them?   The system you select will depend on how fancy you want to be, how secure, how many documents you are likely to store, and of course how much you want to spend.

Here are some suggestions:

Accounts System – For any business money based documents (receipts, invoices, etc) I would recommend uploading them to your on-line accounting system.  I use Freeagent for all my money business processing, and I upload all documents associated to incomings and outgoings as I record them on Freeagent.   Everything is then easily at hand and Freegant deals with the storage and backup of the documents.

Evernote – If you are an Evernote user, then all the documents can be uploaded to Evernote.  This has the advantages that Evernote will automatically OCR your documents for later searching and you can create folders for different document types.  However, whilst the basic account of Evernote is free, uploading large amounts of PDFs will soon move you into the realms of a paid account.

Windows/Mac File Store – the cheap and cheerful solution is to simply keep them in a windows or Mac file directory somewhere on your computer’s hard disk.  As with Evernote you could keep them all in one big directory, or have sub-directories for different categories and document types (such as invoices, contracts etc).  Just remember to perform regular backups of your file store.

Sharepoint – My own personal product of choice is Microsoft Sharepoint (as I have a home Windows server anyway).  Sharepoint comes in a variety of sizes, styles and prices.  As I was using sharepoint for the storage of my general business documents (via integration to office), it seemed the logical choice to store my PDFs there as well.

Third Party Applications – Finally, there are a variety of paid for and free Document Management solutions available, including products such as OpenDocMan which is one of the better open source document storage systems.

Happy scanning.

Today, I had a run in with another small company.  I know the company name and I know that they sell items via Amazon – but that’s all I really know about them.  I don’t know how big they are, how high their turnover is, or even where they are based.

When I recently purchased an electronic device from Amazon, this company was recommended as the supplier.  The Amazon supplier page gave me an automated delivery date range – fair enough.  The order was placed, and I received a nice order confirmation from the company confirming the delivery date originally presented – all good stuff.

Except the item didn’t arrive.  In fact, by the due date, it had not even been despatched.

It needed me to chase the company for them to provide another date.  Now not only did they fail to give a reason for it not being despatched, but they also failed to offer an apology.   They don’t know what the item is for – it could be for me, or for somebody’s birthday or for a work project – they don’t know what impact a late delivery will have.

So I did what I always do, went back onto Amazon and gave them a negative review.  Nothing too harsh, just a “Missed the promised delivery date”.

The request for credit where credit was not due

My negative remark triggered an email from them saying (and I cut and paste here)… “We would like to plead with you regarding your feedback.  We are a small business  and would like to politely request that you consider changing this to a positive review as a negative feedback will adversely affect our small family business should you decide not to”.

So despite them missing their target, they actually want a good review?  They want me to lie?  You note that they don’t ask me to remove the negative comment – no, they want me to replace with a positive.

Price Verses Quality

So this takes us to the point of this transaction conflict and what I did wrong.  I went for somebody cheap, and what  I should have done is find a balance of cheap(ish) and reliable.

This if the difference between consumer spending and business spending.  Consumers are swayed a great deal by price, whereas businesses buy on risk, reliability and then price.  If we do business to business work, being Mr or Mrs Cheap and reducing the quality may put us at risk.

All businesses are at risk of having negative reviews placed against us.  Ebay, Amazon and business review sites makes it very easy for anybody to vent their anger about us.  Even for small shops or companies who think they are too small for such rants, anybody can vent their wrath on a blog site.

For big multi nationals, a few negative posts will get lost in the PR positive noise that they create so will have minimum impact.  But for us small businesses, one negative review can really hurt us.

So is it better to be cheap and let people down, or price for quality and deliver what you promise?  Or as a wise business coach once told me; Quality will be remembered long after Price has been forgotten.

When it comes to selling consumer goods, companies have to invest multiple millions of pounds (and dollars) into developing new technology.   Who wants last year’s model when the next version has more buttons, more functionality, and that new technology that’s just been invented?

And with new features and new options, comes more choice.  Each item has more settings, and bigger manuals.

But this introduces a problem…

The LG 6 Mode system

Take for instance the brand new LG washing machines.  Not only do they have all your usual settings you would expect, but now you can decide for each setting, what ‘pattern’ the wash should be performed in.  You have a drop mode, a circular, a figure eight, a flip-flop and a twin rotate – all very nice.  All cutting edge.  So much better than last years model.  Yep, I will take one please.

Then comes the time to wash your clothes.  You approach the washing machine with your huge pile of socks and pants and shirts and blouses.  And the washing machine now gives you 16 different programs, each with the 8 different patterns – that’s 128 different options.

I just want a button that says “Whites”, chuck it in and be done with it.  Yes, you may want a few more buttons for ‘coloureds’, ‘bulky’ or ‘delicates’ but really – 128 choices?!?

So it looks good, has more options, and is better than last year’s model – and may sell lots, but come time to use it, the choice is just too much.

Too much choice in your proposals

When it comes to your own business, your proposals are like the washing machine.  Your potential customers come along with their big pile of problems, and they want the ‘white wash’.  Give them 128 different options – and they will go somewhere else.

People like to make a decision.  They do like a choice.  BUT, they like a choice of A, B or C.  Give them a choice of A1 to Z99 and its too much – everything gets confused, there is too much choice.  They will go elsewhere where the options allow them to select from the A, B or C.

Of course, you can add choice in your proposals, but the choice can be done with ‘further discussion’.

“Here is my proposal”, you can say,  “with all the parts detailed as per my recommendation on our discussion.  However”, you can continue, “the items marked have other options if you are not happy and I would be happy to meet to discuss them if my suggestion is not in line with your own thinking.”

Isn’t that better than a proposal with 128 different choices and options?

?So as a level headed independent business owner (or contractor or freelancer) you have all your backup plans in place, right?  You have your systems backed up to disk or removable media, you have your company insurance in place, and I am sure you have backup copies of all your important documents, yes?

And what about you?  Do you have a backup of the physical you?  I mean, what happens if something happens to you?

Regardless of what country you live in, one of the problems you will face is that the worlds health services are stretched to breaking point.  In the USA, a great health reform (or should that be revolution) is underway.  Even here in the UK, where we are supposed to have the best health service in the world, the last thing you need when you fall ill is to find yourself at the back of an 18 week wait for a consultation – especially if you can’t work whilst you are waiting.

You are your own best asset

If you are anything like me, your company revolves around you.  Yes, you may have computers, systems and software, but you are your company.  Without you, your company grinds to a halt.  And whilst we all may suffer the odd cold or flu bout which we can either work through or take a couple of days off, what happens if something more serious happens?

Can your company afford to be moth-balled for 4 or 5 months whilst you recover from a broken arm, torn muscle or appendicitis?

Regardless of the level of public health available in your own area, there will be wait times – ranging from days to several months depending on what is wrong with you and where you live.  Personally, if something happens, I want to be in front of a specialist the next day and back on my feet, earning money, as soon as possible.

That’s where private health care comes in.

Options for Private Medical Care

Here in the UK, there are a number of suppliers of private health care to supplement public health.

You can opt to pay for private healthcare yourself (which carries no tax implications), have your company pay for you as a named individual (which effects your tax code), or have your company pay for you as part of your directors status (which carries no tax burden – but best speak to your accountant for tax advice).

The cost per month will vary based on your age and medical history, but a typical cost for a 40 year old will be around £50 a month for a reasonable level of cover.  This will provide all the insurance you need, covering all medical bills from initial consultation through to completed treatment.

Companies in the UK worth looking at include:

Bupa – the big name in private health care (the one I personally use), with a variety of options including sickness pay

Nuffield – Like Bupa, Nuffield have their own hospitals up and down the country, and  provide a wide range of options

AXA PPP – The AXA private Patients Plan provides insurance allowing you to go private when the need arises.  AXA uses other private health providers facilities.

Money Supermarket – Whilst not a health provider themselves, the money supermarket web site allows you to search a wide range of insurance companies who can meet your needs.

PCG Insurers – The PCG (professional Contractors Group) have a wide range of sponsored insurance suppliers who can provide quotations for private medical insurance.

One final note.  Private Medical Insurance cover is completely different from Life Insurance (which pay up if/when you die) and Disability Insurance (which pay up if you can no longer work).  These are worth looking into as separate options if these areas concern you.