Starting and running an Agency, some of the things you should know. Pt 2
One of the most important things is not to spend money you don’t need to! When you do spend money only spend wisely on the things you do need or that make you provide a bettter procuct to your customer from the off. In this part we will look at web sites and finance costs.
In this day and age you do need a web site.
Customers are vital and some (like councils) may not even consider you without a web site.
There are a few do’s and don’ts about having a web site.
- The first don’t is go to a company and ask them to get a “domain” or “URL” for you. This can prove expensive and it is simplicity itself. By doing it yourself you own it directly and also you have control over it if you fall out with your web designer.
- Choosing a company and web name. Ideally it should reflect your business so “something” Care or Nursing if you are a care or nursing agency.
- Don’t choose a name that is similar to a major player. As you probably already know if you do a typo in a Google search, it will offer you “popular” alternatives, so people may never get to your web site if they are just searching.
- Do choose .co.uk over com, once again Google is the reason why. Google will offer Dot UK sites over international (DOT COM) ones if you are searching in the DOT UK. So put your thinking cap on.
- Do check that the name is available: it’s easy: just go to Easily.co.uk any type in your choice of names.
- Whist you are at it, search for the names you have thought up. Your site name will cost you about £10 for two years if it’s a dot co dot UK one. Once is yours, you automatically have priority to renew it so no need to go for 10 years!
If you become a customer we will help you with making your site secure at the lowest cost and we will provide the help for free.
Beware hidden finance costs. These can come in many forms so before entering into an agreement for factoring or other loans ask about the following when you hear the “Headline rate”.
Not all financiers are as duplicitous as the following example, but they do occur.
- The Headline rate may be “3%” per month on total monthly turnover. Sounds reasonable? So let’s do some easy sums: Say your wages bill is £1000 per week or in very round terms £4,000 a month. So the interest is 3*4000 divided by 100 or £120 per month. Now say your T&Cs say strictly 14 days (it’s pretty usual and you may actually be in the pound seat if you are supplying good staff your customers want). Then actually if you get your invoices out at the beginning of the week and you pay at the end, you may only need a loan for 10 days to cover the cash flow. This meant that you actually need a loan of one and a half weeks turnover before the invoice payments are in the bank. So £1500 will cover it. So you are paying £120 for a £1,500 loan or 120 divide by 1,500 times 100 for on my calculator 8%! Not so reasonable.
- There may also be an “arrangement fee” to charge you for giving them 8%. This can be between 1% and 10% and is to cover the costs for “arranging” the loan
- Survey or Audit charges might be £400 to £1000 pounds to cove the bank checking your financial history (usually a few quid to them), assets and balance sheet. Because these change may be a quarterly to yearly charge.
- Take on fee (if you currently have unpaid invoices), a straight 2% (really about 6% for the same reason as the Headline rate is understated.
- CHAPS (clearing house automated payment system) fees is very good for the chaps loaning you the money can be £20 to £30 per transaction, actual costs fractions of a penny in computing power.
- Trust accounting charge: an amount levied (typically 0.2%) every time an invoice is paid into your account (did we mention this is all computerised? Real cost a fraction of a penny.
- Charge per Invoice schedule, this is to release funds on the same day that they are paid in: usually 1%. I think we mentioned this is all computerised.
In case you think the last three are all charges for the same service by other names with only slight differences, we would agree.
Earlier article Starting and running an Agency, some of the things you should know
Check your choosen domain name is available here: Easily.co.uk
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