As an educator and mentor to many small firms - I am regularly asked about the behaviour of banks towards entrepeneurs, small firms and those that are riding through tough times. Why do banks not lend, support, how come I get no assistance when I want to grow and so forth?
When I saw the news - that the Bank of England interest is at 0.5% and yet the unauthorised overdraft is at 29.5% - I did feel a sense of outrage. If you go over the limit you have to pay - and I suppose that is "fair enough" - except that the Bank's profit margin is huge. Then here is the rub - you can become "Unauthorised" at the discretion of the bank - it is further in - in the small print - so even if you cause no offence - if the local bank manager decides he no longer wants to support you he can pull the OD facility from you and stick you on the "unauthorised" schedule!! Haha!
Before we decide what to do next - look at the small print:
About 5 clicks in on a pdf document at Barclays is where I found the charges for those who go over drawn without prior authorisation. Here are some extracts. And the story is the same at a couple of other banks that I checked.
"..........to consider making our overdraft service
available to you before your account goes overdrawn or before
you exceed an agreed overdraft limit. Overdrafts provided in this
way are cheaper than unauthorised borrowing.
............The interest rate for unauthorised
borrowings, including those within the £30 buffer zone, is
charged at 29.5 per cent a year..........Additionally, if an item is returned unpaid due to there being
insufficient funds in your account, we will charge you an
Unpaid Fee of £35 for each such payment, which is our fee for
having considered whether to process such payment....."
So - there are some serious learning points:
Ensure you have a good financial director on your board, someone who knows the local networks of managers at local banks, good accountants etc., and can lobby on your behalf if needed. There are many other tips that migth be available and I am going to leave it to the wisdom of the crowds to populate the internet with ideas and suggestions...
Friday, 5 March 2010
Friday, 12 February 2010
Creating and sustaining big visions – is this the real answer to success?
I have long felt that unless we get inspired by the notion of solving big problems or finding things that are meaningful to accomplish there is little to sustain a venture. Sure you can go in a tread through the daily grind of buying and selling, making and promoting or playing small games, but to what end?
One sentence in a book I found in an Ashram – I think – has done more to keep me focused than almost anything else I have come across and to paraphrase this sentence – it is “when the mind is full of little thoughts – where is the space for big ideas”?
It is in this context that I responded to a suggestion by David Carter – a colleague in the Chemical Engineering Department – who kindly also offered to talk to the theme of a need for big visions. As I rambled my way through his suggestion and developed my own view of how best to position this in the minds of nascent entrepreneurs – it seemed obvious! Invite the CEO of the most iconic company in the Cambridge cluster and ask for his views on the notion of big visions.
Fortunately – Warren East has agreed and so I look forward to his talk on Enterprise Tuesday on the 23rd Of February. He has agreed to talk about the vision as it was shaped in the early days of ARM – from a collection of a dozen engineers who had to survive the demise of Acorn Computers, through to the shaping of an ambition by an emergent team led by Robin Saxby to now – when ARM has decided to take on the “Elephant in the room” – Intel!!
I have met some of Warren’s colleagues who – rightly suggest that ARM is inside Intel already – as the latter are clients of ARM. Business strategy in recent times has led to Intel seeking to acquire ARM. meanwhile ARM is growing from strength to strength http://www.executiveinterviews.net/players/full/default.asp?order=UK03880b - see Warren's comments about the prospects from growth as a result of new products from Apple.
So – was the threat of being lost inside a major multinational – the threat of being squashed by the elephant the stimulus that ARM needed to restate their ambitions – to create the next big vision for growth of the business?
Warren will address some of these topics along with his own sources of inspiration – those that have given him his insights and confidence to take ARM to the next level.
Before we have Warren’s talk and opportunity to ask him tough questions – we have Professor John Mullins (the week before) giving us a reality check by asking if in our plans for new ventures we have a Plan B and helpfully telling us what that looks and feels like. He will base his talk on his new book – based on extensive Silicon Valley experience. He and his co-author Randy Komisar who is Partner at Silicon Valley's leading Venture Capital organisation - Kleiner Perkins Caufield and Byers. Incidentally Randy is also author of a best seller - The Monk and the Riddle.
John is a thought leader, a Prof at London Business School and a serial entrepreneur/investor. I am looking forward to his talk as I am engaged in building out an early stage business myself – having raised a second round of funding to cross the chasm from being a research based company to a fully fledged business looking for revenues and customers! Do we need a Plan B? http://faculty.london.edu/jmullins/175.htm
One sentence in a book I found in an Ashram – I think – has done more to keep me focused than almost anything else I have come across and to paraphrase this sentence – it is “when the mind is full of little thoughts – where is the space for big ideas”?
It is in this context that I responded to a suggestion by David Carter – a colleague in the Chemical Engineering Department – who kindly also offered to talk to the theme of a need for big visions. As I rambled my way through his suggestion and developed my own view of how best to position this in the minds of nascent entrepreneurs – it seemed obvious! Invite the CEO of the most iconic company in the Cambridge cluster and ask for his views on the notion of big visions.
Fortunately – Warren East has agreed and so I look forward to his talk on Enterprise Tuesday on the 23rd Of February. He has agreed to talk about the vision as it was shaped in the early days of ARM – from a collection of a dozen engineers who had to survive the demise of Acorn Computers, through to the shaping of an ambition by an emergent team led by Robin Saxby to now – when ARM has decided to take on the “Elephant in the room” – Intel!!
I have met some of Warren’s colleagues who – rightly suggest that ARM is inside Intel already – as the latter are clients of ARM. Business strategy in recent times has led to Intel seeking to acquire ARM. meanwhile ARM is growing from strength to strength http://www.executiveinterviews.net/players/full/default.asp?order=UK03880b - see Warren's comments about the prospects from growth as a result of new products from Apple.
So – was the threat of being lost inside a major multinational – the threat of being squashed by the elephant the stimulus that ARM needed to restate their ambitions – to create the next big vision for growth of the business?
Warren will address some of these topics along with his own sources of inspiration – those that have given him his insights and confidence to take ARM to the next level.
Before we have Warren’s talk and opportunity to ask him tough questions – we have Professor John Mullins (the week before) giving us a reality check by asking if in our plans for new ventures we have a Plan B and helpfully telling us what that looks and feels like. He will base his talk on his new book – based on extensive Silicon Valley experience. He and his co-author Randy Komisar who is Partner at Silicon Valley's leading Venture Capital organisation - Kleiner Perkins Caufield and Byers. Incidentally Randy is also author of a best seller - The Monk and the Riddle.
John is a thought leader, a Prof at London Business School and a serial entrepreneur/investor. I am looking forward to his talk as I am engaged in building out an early stage business myself – having raised a second round of funding to cross the chasm from being a research based company to a fully fledged business looking for revenues and customers! Do we need a Plan B? http://faculty.london.edu/jmullins/175.htm
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