Exchanging Thoughts

First results from Barclays ‘Have Your Say’ scheme

A few months ago one of my colleagues wrote about the Barclays ‘Have Your Say’ scheme, which was developed to bring help and support to small businesses across the UK.

Now halfway through the scheme, Times Online have reported that over 3600 business owners have taken part.

One of the most interesting findings is that many businesses have not been disheartened by the financial crisis. Instead, “many appear to be preparing to grow when the economy rebounds.” In addition, over 51 percent of business owners believe that they can expand in the next year.

However, not all the findings were positive. The survey showed that only 35 percent of business owners felt that their business had a positive effect on their lives. Furthermore, 42 percent revealed that running their own business was very hard work and sacrifices had to be made in their personal lives.

The ‘Have Your Say’ scheme is continuing into October and Times Online promise they will continue to feedback all the results.

It will be interesting to see how more business owners respond to this scheme and more importantly, what can be done to alleviate some of the problems and concerns identified in the future.

Technorati Tags: small business advice, business advice, barclays, have your say scheme

Barclays encourages small businesses to ‘Have Your Say’

I came across an interesting article on Times Online - admittedly dubbed an ‘Advertisement Feature’ – which contained some interesting news for small businesses.

The article highlights the new ‘Have Your Say’ scheme, devised by Barclays, which aims to provide help and support to small businesses during tough times.

The article states:

“Barclays now wants to understand what it’s like to own a small business in 2009 so it can help by providing extra support with the issues of the day.”

To start this programme, Barclays will be issuing a nationwide questionnaire to gauge opinions of those working in small businesses across the UK. The key questions Barclays want answered are

“What is it like to be a small business in 2009? What are the main things on business owners’ minds? What opportunities are there? And what skill gaps do businesses feel they have?”

Although filled with some rather obvious advertising slogans which make me question the credibility of this ‘article’,  the programme does appear to be useful and helpful for any small businesses feeling the strain during the current financial troubles.

As the article states, the programme aims to “tap into the mindset of the small business sector”. I feel this is what makes it stand out against other schemes and programmes which didn’t work so well in the past. Barclays want to create two way conversation in order to fully understand and get into the heads of those working in small businesses, which means messages and advice can be personally tailored to specific problems and therefore much more effective. 

Technorati Tags: banking, business advice, barclays, have your say

CAMPARI, the key to securing finance?

I came across an interesting article on Times Online, which highlights the fact that small companies need to stand out in order to get noticed by their banks amongst propositions from other competitors.

As I’ve already written a post which emphasises some of the obstacles facing SMEs attempting to secure finance, I thought it would follow on quite well.

The article suggests SMEs familiarise themselves with the mnemonic CAMPARI.

And, for those of you like me who don’t quite know what a mnemonic is, then think anything that makes you remember something better, along the lines of SMART targets.

CAMPARI is a good start to figuring out what your priorities need to be, particularly as these may be the criteria you will be judged against by your bank. As Jeremy Rance who wrote the article points out, it’s always useful to “stand in the shoes of the bank manager”.

• C is for character. How is the character of your business best described? Think closely about the durability of your business and its leadership.
• A is for ability. How would you describe the leadership team within your company? What is the degree of commercial competence, professional qualifications and delivery of results amongst your employees?
• M is for means. What resources are available and how can these be reached? What value is attached to intangible assets, such as patents and copyrights, and how have these been calculated?
• P is for purpose. How will your company’s proposition help to achieve great things?
• A is for amount. How much do you need and how realistic is this prediction?
• R is for repayment. What will your company do to repay the money the bank has lent to you?
• I is for insurance. If everything goes wrong how are you going to repay the bank?

Overall, don’t let good opportunities pass you by because you haven’t had the time to get your ideas straight. The importance of this, is to emphasise the fact you need to think long and hard about every aspect of your company and what you have to offer before making a proposition to a bank. This is a point that cannot be stressed enough during a time of such economic doom and gloom.

Technorati Tags: banking,small business,small business advice

Quantitative easing – give us the money!

The Bank of England has had a busy week. Along with its historic interest rate cut, it has also announced plans for quantitative easing.

Quantitative easing sounds very impressive, but for those unfamiliar with the term, it simply involves printing money, £75 billion to be precise, and giving it to the banks. Why? Well, here’s the cunning bit - IN THE HOPE that they’ll spend it, i .e. lend it to businesses to boost the economy.

Now, I may be wrong, but this plan seems to have a couple of inherent flaws.                           

1. £75 billion seems quite paltry. RBS alone has managed to rack up losses of £24 billion, with another £25 billion needed by HSBC from its shareholders, and a newly-discovered £10 billion hole in HBOS. These banks are able to chew through cash with alarming efficiency and the general consensus from industry experts is that the amount of QE needed to make any significant impact via them is closer to £300 billion.
2. The important bit is ‘in the hope’. Although the banks are being given this money, that is as much influence as the government   can have, i.e. they can’t actually make them spend (lend) it. Banks are desperate to rebuild their balance sheets, so they may just choose to deposit it in their coffers where it will never see the light of day, let alone go to help British businesses, and the whole thing will have been a very big and expensive waste of time.

If the end game is to stimulate the economy and boost manufacturing, surely even minimal lateral thinking would conclude that the best people to give cash to isn’t the banks but directly to companies themselves.

Let’s face it, any SME still standing after the last year must have some pretty good management, and is in a far better position to know where and how to invest funds in their business to get it going or growing than the banks are.

It could provide them quickly with the cash flow they so desperately need, and which the banks are withholding from them, to grow their operations and perhaps take advantage of new overseas markets.

The Euro and the Dollar are both giving a golden opportunity to British exporters. At around 1.12 to the pound, the Euro is still some 10% stronger than its 2008 average, making our goods and services attractive to the European market.

Failing that I have another suggestion. If the government is really set on printing and spending money, why not give the job to the people who really know how to do it best – the women of Britain. Give it to us and we can, and would, literally spend for England. In fact, I guarantee that between us we could blow the lot in one Saturday afternoon. Handbag and shoe makers, if nothing else, would be saved.

Technorati Tags: Quantitative Easing, RBS, 4X Currency Corporation, Helen Scott Currency

Banks are ripping you off and are keeping it quiet!

My frustration has reached new heights this week. My wine consumption has increased dramatically with the latest facts that have come to my ears, and I’m not sure they even make a big enough soapbox for me to stand on.

You may remember in my previous writings I had a good rant against the lack of transparency in the foreign exchange market. You can’t compare currency prices between the different banks, because banks will only give you a dealing quote if you have your account with them.

In the absence of being able to obtain any meaningful rates comparisons, the SME market is pretty well stuck with using its own bank. It has been estimated that, in the UK alone, there are several hundred thousand SME companies trading overseas and therefore with a currency requirement. They may well not know how much over the odds they are paying.

At 4X we know we can save an average SME some £12,000 per year on its foreign exchange. If we are conservative and say that only applies to a fraction of the market, say 100,000 companies out of the 850,000 or so SME’s, that is a staggering 1.2 BILLION pounds per year! But we’d like to prove that.

Well, being the resourceful types, we decided we would do our own bit of research. We are exhibiting at the FDI Expo at ExCel in London next week, and thought it would be nice to give our visitors a few facts and figures regarding the rates charged by the various banks compared to using 4X.

Knowing that we couldn’t get these ourselves, we contacted a few of our friendly customers to see if they would each ask their respective banks for a Euro rate. Easy enough, you would think, just synchronise the time for the requests and Bob’s your uncle.

Not so! Two of the banks contacted – HSBC and Nat West – wouldn’t give a currency rate EVEN TO THEIR OWN CUSTOMERS!!

HSBC firstly insisted on seeing the funds in the account before they would quote a rate. When told they would be transferred from another account they said they would only give a rate when the customer had made the transfer and was at the point of doing the trade, therefore skilfully removing any possibility of shopping around in advance. Clever.

Nat West, on the other hand, insisted on having the request in writing. Once it had been processed, they said, they would call the customer back with a rate and give him 20 seconds to accept or reject it, again removing the option of shopping around. If the rate was rejected, the customer could try again (and here comes the joke) the next day!

The next day!! One rate a day! Currency rates move up to three times a second. 4X provides more than half a million rates per day. How on earth is a business supposed to get the best deal if it can only request one rate a day? The whole thing is completely scandalous.

Of the others, Barclays would only give an indicative rate, reserving the right to change it at the point of actually doing the deal. The indicative rate was some two cents below the rate 4X was charging to buy 165,000 Euros, and even if they had honoured it, that rate would have cost the customer a whopping £1,784 extra.

Bank of Scotland, to their credit, did give a rate, and it would only have cost £876 extra compared to 4X, which, given the competition, makes them look almost like saints.

What can be done? Well, on the face of it, nothing. The banks have got the SME market right where they want it, and legislation is on their side. There is no obligation to disclose prices, or indeed the profit that the bank has made out of the deal.

The whole situation is completely unacceptable.

There is no reason on earth why the banks can’t be completely transparent with their pricing, except that they don’t want to be. They have the technology to get and display up-to-the second rates, just as we do. But if they did, it would simply expose the huge profits they are making out of the SME market in foreign exchange deals. The aforesaid £1.2 billion would a) make a big dent in their profits, and b) be rather embarrassing.

So, all we can do is start to put pressure on, and bring the whole sorry shambles to light. I am being featured in the Daily Express  soon, and I will make every endeavour to bring price transparency into the arena. Here at 4X we are completely transparent with our dealing rates and are determined to make others be the same.

So that’s it. End of this week’s rant. There will be more, but I must stop now. I just need to pop out and commission a specially large and robust soapbox – I think I may need it.

Exporting businesses could save thousands by simply checking their rates

Last week I decided I needed a new car. So I went down to the local garage, because it’s the closest and most convenient, and they had one in stock. I asked how much it was but they were a bit vague, they just said ‘about £10,000’.

I wanted to check whether I could get it cheaper elsewhere, so I popped into another couple of garages. But they wouldn’t tell me how much their cars were at all unless I opened an account with them. The first one looked OK and it would do the job, so I agreed to buy it.

Yesterday I got my bank statement through the post, and found out they had actually decided to charge me £11,000 for the car. Plus a delivery fee, and a bit extra for luck, all of which I thought was fair enough.

OF COURSE I DIDN’T! That would be utterly ridiculous. Unless money is no object, nobody in their right mind would buy anything unless a) they know what they’re paying for it, and b) they don’t think they can get it significantly cheaper elsewhere.

Nobody likes to think they are paying more than the next person for exactly the same thing. I have been on package holidays which were ruined on day one because someone found out the people on the next table had got theirs £20 cheaper with a free key ring thrown in and spent the rest of the week in sulky resentment.

So why, I ask myself, are businesses, presumably for the most part run by intelligent and commercially-aware individuals, happy to accept treatment similar to that described above from their banks on foreign exchange transactions?

Currency transparency is not there

The answer, I’m afraid, is rather depressing. Because although almost every other commodity in the world is now openly and transparently priced, allowing you to see whose mortgages, insurance or baked beans are the cheapest, the one thing that has slipped through the net is currency.

You can’t go to a competitor bank unless you already have an account there, and a specialist currency provider is also unlikely to quote you a dealing rate unless you are registered as a customer and on the point of doing the deal.

Shockingly currency is completely unregulated

The currency market is completely unregulated. It isn’t covered by the Financial Services Authority, the OFT, the Monopolies Commission (why is there only one of those?) or any other regulatory body.

The net result is that there is absolutely no obligation on anyone, be they banks or specialist currency providers to reveal either the price they are selling at before they do the deal, or how much profit they are making on it. The best you are likely to get is an ‘indicative’ rate – which may appear attractive but is effectively meaningless. It is just what it says, an indication of the price, but may, like my car, bear little resemblance to the price they will actually transact at, and making it extremely difficult to make accurate comparisons.

Here at 4X we support regulation. But even throwing our support behind the proposed 2009 regulation of the currency industry by the FSA doesn’t guarantee that they will go as far as completely opening up on pricing.

Open up pricing

So, we have decided to try to change things from the inside, to put our money where our mouth is and challenge our competitors and the banks to do the same. We have had live dealing rates for individuals on our website for a long time now, and last week we extended this openness to the corporate market.

Just go to www.4xcurrency.com/trial.htm for a free download of our unique dealing software with live tradable rates. No indications, nothing hidden. What you see is what you get and you are quite at liberty to shop around and compare. In fact we think you should, but we doubt whether anyone else will offer the same.

The foreign exchange market is worth absolutely billions. It’s no surprise that the banks and other providers don’t want you to know what they are charging. Profits would slip overnight and we know they can’t afford that.

In the meantime, you’ll be pleased to know I have bought a new car (Nissan Micra - similar to left). I found it on the internet, it was a bargain, and we are both very happy.

Technorati Tags: 4X Currency Corporation,Currency regulation,Currency Transparency

The banks gamble and lose but why do we pick up the bill?

So, the Government has decided to prop up the banks to the tune of £50 billion. That’s about £800 for every man, woman and child in the country. The reason? Well, they have made some bad lending decisions, and have lost some money. Had their greed paid off, and the sub-prime market not come crashing down around their ears, they would no doubt now have all been announcing record profits and congratulating themselves with seven figure bonuses for the directors. 

Now, as we all know, if this happened to any other business, to any of the 250,000 or so SME’s in this country, it would simply be hard cheese. You don’t make profits, your business decisions go wrong, you simply shut up shop. Not so with the banks.

Notwithstanding the fact that they cost the small business community a whopping £100 million last year due to errors in processing overseas payments, they are now rubbing salt into the wounds by battening down the hatches on genuine funding needs in the SME community, making it even harder for the struggling small business to get any financial help at all.

From where I sit, the situation is even more galling. 4X was set up without any help from the banks. They wouldn’t lend us a penny, for the simple reason that we would be in direct competition with them by providing the business community with cheaper and more efficient FX services than they were prepared to offer. Nor did we get any government funding or grants. The whole lot was financed out of our own pockets, which has meant growing slower than we’d like to, not to mention a pretty austere personal life for the last few years. We haven’t been able to afford to make any mistakes.

Yet now, I am effectively being asked to subsidise those same competitors, whose greed and incompetence should be their own downfall. With £800 of my taxes! What other industry would get treatment like that? What if we all start going cap in hand to Mr Darling every time we stuff up our business decisions? I can just imagine his reaction. I tell you it makes my blood boil every time I think about it.

And the really sickening thing? I can’t even go on holiday and forget about it all for a couple of weeks, because I just don’t have a spare £800….

Technorati Tags: Banks,Alistair Darling,4X Currency Corporation