Thursday 29 March 2007

Wheelie Bin Cleaning

There seem to be more and more companies offering Wheelie Bin Cleaning franchises. This is a business I just don't get. Why would anyone pay to have their wheelie bin cleaned? Unless you are pouring rubbish into it without using bin liners, it doesn't really get very dirty, does it? Ours certainly doesn't. And I don't know anyone who pays to have their bin cleaned (although I suppose they wouldn't necessarily share this information with me unprompted).

But even if some people do pay to have their wheelie bin cleaned, I can't see how you can make any money out of it. I've just googled "wheelie bin cleaning" and got a bunch of companies wanting to sell me a franchise (and it is interesting that their primary aim seems to be to sell me a franchise, not to actually clean my bin. I'm always suspicious of any franchise company whose website is all about selling franchises, not actually selling the service being offered.)

Most seem to be saying that you can clean 150 bins a day, that's one every 3 minutes in an 8-hr day. That seems quite a lot, surely even the fanciest cleaning machine is going to take 30-60 seconds to actually do the cleaning leaving you 2 - 2.5 minutes to get to the next location. Possible, I suppose.

Those people that do pay for their bins to be cleaned apparently do so once every four weeks. So to get 150 bins a day over a four week cycle you need 3,000 customers (150 x 5 day week x 4 weeks). That's fully 3% of your allocated territory of around 100,000 households (that was the territory size in one franchise I was looking at). That's quite a high penetration: if, say, a quarter of households actually want to pay for a clean, plus there are, say, 4 other competing companies in your area, that leaves you expecting about 6% as a steady-state, well-established figure. So getting to 3% right away is going to be tough.

Or, to put it another way, you'd have to sign up 11 new customers every working day for a year to get to your 3,000. Is that doable? Seems unlikely, unless they are all coming over the internet or some other automated system. If you are having to go door-to-door to sign them up yuo wouldn't have any time to do the cleaning, would you?

I just doesn't seem to add up to me. I'm not at all saying these franchises are scams (at least one of them is a BFA member), I just can't see how it works.

Any wheelie bin franchisees reading this? Can you really do 150 bins a day? And can you economically sign up that many customers to provide that volume of bins?

Tuesday 27 March 2007

FSB red tape myths

The FSB (that's the Federation of Small Businesses not Federalnaya Sluzhba Bezopasnosti) keeps bandying around this figure that owners of small businesses spend an average of 28 hours a month filling in forms for the Government. Google helpfully finds me nearly 50 FSB press releases citing this statistic.

But I think it is codswallop.

28 hours a month is nearly one whole day a week. There is no way we (let alone me personally) spend a whole man-day a week filling out regulatory paperwork. What can all these forms that other businesses are filling out possibly be? Here are the tasks we do which involve some sort of statutory "paperwork":

The additional statutory burden of administering payroll is practically zero. We'd have to check everyone's hours, number of jobs they'd done, etc. even if we weren't also deducting payroll taxes on behalf of the government. The calculation of payroll taxes takes milliseconds because, like everyone else, our accounting software (QuickBooks) does it for us. Although maybe there are people out there who still calculate payroll deductions manually? It was only last year I think that the Inland Revenue finally stopped sending us a big book of tax and NI deductions every April. They really did send this huge series of tables where you could look up in one column what you were paying someone, and then look across to another column how much tax and NI you should deduct. I mean, really, why would anyone in their right mind ever bother doing that, when payroll software is practically free (I think we pay a princely £70 a year to keep our QuickBooks payroll tables up to date, plus a few hundred quid every few years to buy the newer version of QuickBooks itself).

Once a year, we "fill out" (i.e. print) P35/P14 forms, but there is zero, zero, zero paperwork required during the year - we just send the cash to HMRC once a month (OK, so that takes 5-10mins to check the amount, go online, send the payment). I probably spend maybe 1-2 hours preparing our annual return (which consists of getting QuickBooks to prepare the figures, me check them over, then instruct QuickBooks to zap them over to the HMRC website, and er, that's it).

So that's, say, 2 hours a year = 10 minutes a month, plus the 10 mins to send our monthly tax/NI pot to HMRC, so 20 minutes a month.

CIS Scheme (yes, I know, an example of RAS syndrome)
I do moan about this to anyone who will listen, but it doesn't really take that much time (to comply with, rather than to moan about). I moan because I dislike the fact that we and any subcontractors that we use are assumed to be fly-by-night tax avoiding scamsters unless we jump through a few hoops to prove otherwise, just because HMRC deems us to be operating in the "construction industry".

(CIS=Construction Industry Scheme. Basically a system whereby anyone operating in the "construction industry" claiming to be a subcontractor, not an employee, is assumed to be telling porkies unless they specifically prove otherwise. In practice if we pay an invoice from any small subcontractor -- whether an individual or a limited company -- we have to deduct 18% of it and send straight to HMRC, because HMRC assume said subcontractor is fiddling his taxes. Said subcontractor is of course not fiddling his taxes, and has to offset the deduction he has suffered against his true tax liability for the year).

For us, we have to fill out a little voucher each month summarising any payments we have made to subcontractors and pop them in the post to HMRC. This probably takes us 20 mins per month. The actual cash we deduct we just lump in with our real payroll taxes and pop that over to HMRC, so I have included the time taken to do that already. And even the monthly paper vouchers (which are a bit silly) are being abolished in April, and we'll only have to make a single annual return, just like we do for real employees.

So, at an extra 20mins for CIS (which will be nearly zero after this month) we are now at 40mins per month.

VAT return
I hear other SMEs really moan about this, but I just don't get it. As long as you are keeping accurate accounting records (and how can you run a business without them) filing your VAT return takes minutes. Our version of QuickBooks (2005 Pro) can't actually send the return directly to HMRC yet, we still have to type four numbers onto the HMRC website four times a year, but it really doesn't take a significant amount of time. Let's give it 30mins per quarter, 10mins per month, taking us to 50mins per month in total.

Annual Accounts
Spend a fair bit of time on this, but not to satisfy any regulatory requirement really. I'd want my accounts to show a "true and fair" picture whether or not I had to submit them to Companies House. Indeed, the version we actually submit to Companies House is far simpler than the version we use for internal management purposes (note I'm saying simpler not different. The two versions are of course based on the same figures, but we only have to file a summary balance sheet to Companies House, whereas we have a detailed P&L and a detailed balance sheet for our management accounts. Plus a stack of fancy metrics churned out from our super-dooper schedule / job / customer management software).

And our Corporation Tax return is based on pretty much the same figures, with a few adjustments (some small bits of expenditure we'd consider to be business expenses while taxman doesn't; depreciation becomes capital allowances; etc.). I suppose our accountants maybe spend a couple of hours a year on those bits. Let's allow them a half-day, four hours, 20 mins a month.

Then we have a bit of health & safety stuff. Very little time required on a regular basis, occasional few minutes filling out the Accident Book, a few more minutes, maybe half-hour, going on line to report the rare accident that requires a RIDDOR notification, annual review of our "stuff" for which I'd generously add an hour a month, maybe two if we really went to town on our annual review and spend a few man-days on it (like we did last year, see posts passim).

So I'm at something like 3 hours a month, and I just can't see how I could get to 28 hours a month. Are we missing something? Is there some huge raft of paperwork that everyone else is completing which we are just missing?

I think this whole red tape thing is mostly a myth, perpetuated by business lobby groups (I'm sure FSB is not the only one) and other businesses. Certainly some specific industries (waste management? farming? food preparation? house builders?) do have much larger regulatory burdens. Would that be enough to skew the average so heavily? FSB's stat is presumably the mean figure from some survey. Maybe the median would be more meaningful if there are some sectors massively burdened by red tape while the majority are not?

But you have to have some regulation to keep the real charlatans and scamsters in check. Are there any developed countries with less red tape than us? I doubt it. United States certainly regulates SMEs more closely, mainland Europe too. South East Asia? Not sure. Australia / New Zealand? Building regulations are certainly more onerous (e.g. re-tiling your bathroom requires a "waterproofing certificate"), don't know much about business regulation generally down there.

(On a non-business note, I am also a paraglider pilot. Paragliding in the UK is almost completely self-regulated, the CAA basically leaves it to the British Hangliding and Paragliding Association to make sure its members are trained and fly sensibly. I don't think any other countries do this. Certainly Germany and France have proper legal requirements to fulfill before you can throw yourself off a hill with a glorified parachute on your back, similar to what you'd need to fly a real plane)

We should be celebrating the fact that the UK runs so well, with such limited bureaucracy. By constantly harping on about "red tape strangling business" I think the FSB et al are being counter-productive. A civil servant contemplating some new regulation is going to think, hey, if these guys are already doing 28 hours a month of red-tape-complying, what difference will it make if my new regulation adds an extra half-hour or so? But if he thinks we are just doing 3 hours a month, then an extra half-hour is a huge increase and, maybe, Mr Civil Servant will just shelve his regulation, or work harder to make it less burdensome.

Tuesday 20 March 2007

Corporate memo becomes TV channel

It wasn't so many years ago that if you had just merged two global companies, you might communicate the details of this to the staff by sending them all a memo.

Such a memo would no doubt have spoken about "opportunities", "synergies", "securing the future", and that kind of corporate guff.

Arcelor-Mittal does it with a dedicated TV series, which employees can view on-line, to get the inside story of the merger and what it means for their job. Nice, I like it. (This via Real Business blog).

I have a similar plan (albeit on a slightly smaller scale): in our new office (which we should be occupying in April) we are going to have a webcam permanently broadcasting what's going on in the office, so you can all see how hard we work juggling the day around to get our handyman to your door on time.

Interesting post here via Seth Godin's blog about Johnson & Johnson attempting to avert negative publicity about their Splenda artificial sweetener by buying up lots of domains that might be used by campaigners against their product. Domains like "" and "".

What misguided corporate PR advisor suggested they do this? Obviously they can't buy up every conceivable domain that might be used against them, so this strategy can surely only backfire? People hear about it (it is all over the blogosphere now) and some will assume that Johnson & Johnson / Tate & Lyle know something about the safety of the product which makes them expect people to campaign against it.

That's no way to manage your brand. If there is something genuinely wrong with the product they should fix it or withdraw it. If there is nothing wrong with it (and, without having done any proper research at all, my money would be on it being completely safe), then they should treat their consumers as adults and just explain the facts.

Monday 19 March 2007

Cowboy builders (2)

Been thinking about what Steve's doorstepping cowboy builder would need to do to commit a criminal offence. It isn't that easy to prosecute someone for this sort of thing. As a consumer in a free market I am free to strike any bargain I wish. If I choose to pay someone several thousand pounds to do work on my roof that doesn't need doing, I am free to do that. Someone accepting my offer to pay them for that service is not necessarily a criminal, although they might well be be fleecing me.

So, had Steve been better prepared, and strung his cowboy builder along for a little longer, what might our friend have done which would be a definite criminal offence? Here are some suggestions:

1. Steve could have agreed to have the roof fixed, but asked the guy to come back in a few days time to do the work. He has then entered into a (verbal) contract in response to an unsolicited approach at his home, so Doorstep Selling Regulations kick in. Our cowboy builder needs to inform Steve that he has a statutory seven day cooling off period. Failure to mention this means a visit to Magistrate's Court and a maximum £2.5k fine.

2. Get him to fix the gas cooker. Gas Safety Regulations, certainly a fine, a lot more if he breaks it/leaves it unsafe and endangers the house.

3. Get him to do add a couple of new sockets in the kitchen. Part P of the Building Regulations prohibits this unless our cowboy builder is a "competent" electrician (a member of NICEIC or similar body), which is unlikely. (Although strictly speaking, the detail about whether you should be adding new sockets in kitchens is in the accompanying guidance -- the Approved Document -- to the building regulations and doesn't actually have the force of law. If our cowboy managed to safely install these sockets, it is unlikely (I think) that he could be prosecuted.)

4. Trade Descriptions Act. He's probably breaching this just by recklessly claiming the roof is in urgent need of repair. And what was that bit of paper he was waving, which he seemed to be saying showed he was "a genuine builder"? If it was false or misleading, then that too would get him nabbed under the Trade Descriptions Act.

That's the best I can do, which is probably enough to get him a few healthy fines, but unlikely to keep him off the streets for long.

Cowboy builders

Love this post from our Epsom franchisee, Steve Williams, who was himself approached by cowboy builder offering to "repair" his roof. Hilarious. I so wish that had happened to me. I'd have had the guy in, let him look around, quietly flicked on the video camera, spent a while discussing the state of the tiles, called my own voicemail to record the conversation just in case the vid camera didn't work, see if he says something which would actually be a criminal offence, take up a good hour or so of his time, see if he'll offer to "repair" our gas boiler, tempt him with a "mislaid" cubic zirconia earring on the floor of the loo, and the then call our good friends at Trading Standards and /or the cops (depending on whether he went for the earring or not).

My grandparents were the victim of such a scam a few years ago. A "passing builder" offered to fix their soffits etc ("in need of urgent repair"). They did all the right things, got a written quote, confirming what was to be done, total amount wasn't huge and maybe the soffits were in need of a lick of paint. But then it all went horribly wrong. "Builders" started deliberately breaking stuff they were supposed to be fixing, price for the "work" went up every few minutes, grandparents realised they were being fleeced, tried to call a halt, brought out the bit of paper on which was written what was supposed to be done (and for what price) and found that the fraudsters had switched the bit of paper.

They had placed it on the kitchen windowsill (I can imagine in now: "There you go, Mr Tolliday, I'll leave that there, that says exactly what we'll be doing, you've nothing to worry about, it's all there in writing") and then, in the confusion, switched it for a blank piece of paper. Scoundrels. People like that aren't cowboy builders, they are just criminals using "building" to perpetrate their particular brand of fraud.

Thursday 15 March 2007

HSE responds on SafeContractor

Jim Neilson of the Health & Safety Executive has responded with a thoughtful and detailed letter regarding our disagreement with National Britannia and our SafeContractor renewal. (see earlier posts)

He broadly agrees with our position, saying that "health and safety should be about practical actions that make a difference, and not paperwork for its own sake."

He advises me that a colleague will raise this issue with National Britannia, and draw their attention to what the HSE considers to be sensible risk management. And they will write to me again advising me of the outcome of those discussions within a month.

Which I think is very good of them, top marks to HSE, zero marks so far to National Britannia.

I note in passing that if you Google "safecontractor renewal", you get my blog at #1 spot, with SafeContractor's own site some way down the search results. And even just Googling "safecontractor" has me at #5 or thereabouts.

Tuesday 13 March 2007

Lord McKenzie responds on Health & Safety (sort of)

Lord McKenzie's office has responded to my letter about SafeContractor (see this post here, and also more background here and here), saying:

"Lord McKenzie read your letter and attachments with interest. He was pleased that your experience of working with colleagues on the Workplace Health Connect programme was successful, and wishes you success in the future."

Hmmm. Well, with the greatest of respect to His Lordship, he may well have read my letter (copy here), but clearly didn't get past the third paragraph.

A colleague has suggested that the best way to contact a Minister is via our MP, that way (apparently) you are assured of a more detailed response.

Thursday 8 March 2007

Relaxed handymen

I heard an interesting anecdote yesterday about a chance meeting between one of our handymen and someone working for a competing company (Handy Squad, I think). They were both on their motorbikes, at a set of lights, and chatted briefly while waiting for the lights to change.

According my friend-of-a-friend who heard about this chance interaction, the competitor handyman was most struck by how relaxed our handyman was.

I was very pleased to hear this - while whizzing from one job to the next is naturally not going to be stress-free, we try very hard to take as much stress as we can out of our handyman's day, and keep it in the office. So our office guys (Seamus, Jordan, Chris, James & myself) try and do all the stressing about keeping the schedule together and making sure every customer's job is done on time, leaving our handymen to just focus on doing what they do best: handymanning.

If our guys are stressed out rushing from one job to the next, it can make the job pretty miserable and also makes them much more likely to make a mistake. So it is important to us to try and allow our handymen to be relaxed.

It doesn't work all the time, and it can still be pretty stressful at times, but I am very pleased to hear that it obviously works some of the time.

Tuesday 6 March 2007 responds

Emma at kindly points out in this comment that do publish performance stats online. Not sure what position at Yell Emma holds, but intrigued and pleased that Yell are monitoring the blogosphere.

Now I had a good look through (their advert management site, where you can view ads, billing history, etc.) trying to find performance stats yesterday, before I called them (and before I made my last post), and I couldn't find them. But I can find them now so either Yell has added this functionality in last 24hrs (possible, though unlikely) or I missed it yesterday (oops).

Nevertheless, the reporting tool is very rudimentary: it can only show one month at a time, and says it updates around the 10th of the following month (though today is the 6th and I can now see Feb data; yesterday when I phoned Feb data was not available, I had to make do with Jan). So it certainly isn't real time, as Emma claims, but is enough to check if the cost-effectiveness of each ad is roughly equivalent to Google, or (as in our case) 10x less cost-effective.

I still don't understand why it is so expensive. I can't believe that any rational competitor would really think it sensible to pay over £7 / click, so does Yell just hope to hoodwink a new advertiser each year? Clearly no-one who has seen their own performance data is going to renew at that cost per click. And any sensible advertiser next year (these Sponsored Listing ads are a new thing) will ask to see how many impressions / clicks a particular category generated the year before, and once they see that data, presumably won't book it? still don't seem to have grasped the fundamental difference between a printed directory and online advertising. With a printed directory, you have to charge a one-off annual fee, as the directory is only printed once a year. There is no good argument for charging an on-line advertiser a one-off annual fee, you will end up undercharging some advertisers and overcharging others (vs what they would be prepared to pay in an efficient market). And given the astronomical cost-per-click of our ad I rather suspect that more people are being "over-charged" (i.e. paying more than would once they know the real value) than "under-charged".

I've just found that they now offer a pay-per-click model, but only for national searches, why don't they just make the whole thing pay-for-performance (either pay-per-click, or given that some people will just call the phone number on the listing and not click through to the website, pay-per-impression)?

Maybe they will. Only way to survive in the long term, in my (loosely informed) opinion. But it shouldn't be about surviving, it should be about prospering. Yell has huge brand awareness and a massive database of local businesses, it should be making more of this inheritance, I rather feel they are slowly squandering it.

Monday 5 March 2007

How long can survive?

We run a couple of "Local Sponsored Listings" on In order to find out how they are doing (i.e number of impressions and clicks) we have to telephone Yell and ask them. How ridiculous is that? (Although even providing performance data is a major step forward for Yell, they didn't even used to do that a year or so ago). Surely any web-based advertiser should be putting that on a website to be retrieved by customers on demand.

The performance of those listings is predictably dire, costing roughly TEN TIMES what we pay for a click on Google Adwords. Why is it so expensive? Presumably because Yell has to fund a call-centre of people reading out performance statistics over the telephone; plus pay an army of over-zealous but usually ill-informed salespeople. Google has neither of those functions, plus is quietly building up a database of local businesses so it can (presumably) go head-to-head with Yell on local classified advertising. Once Google get themselves ready, I'd give 12-24 months to survive. You read it here first.

Thursday 1 March 2007

Scheduling our handymen efficiently

We've put quite a bit of effort over the last few weeks into tweaking our scheduling practices to try and reduce the time spent travelling between jobs (even our London handymen, on motorbikes, still can't actually teleport between appointments, so there is some downtime).

One of our longest serving handymen, Don, said to me at our Christmas party that he didn't think that his average travel distance between jobs had reduced at all in the four years or so he had worked for us. This surprised me, as we now have about three times as many handymen in London as we did when Don first joined, so we should be able to keep each handyman in a tighter area.

At the time, I briefly considered actually measuring the average actual distance between every job we had ever done, but quickly dismissed this as computationally too complex.

Then I had a flash of inspiration late yesterday afternoon and figured out a way we could get the right data out of our system to do a full analysis of inter-job distance. So I built this monster spreadsheet, incorporating (for the first time since I did GCSE maths) Pythagoras' theorem.

Spreadsheet turned out to be such a monster that, for first time since working as a financial analyst at OC&C, I had to switch Excel to manual recalc (only really hardcore spreadsheet nerds like me ever need to do that). And then when I hit F9 to calculate everything, my PC sat whirring away for 2 full hours before telling me:

Our average inter-job distance has dropped by 9% since 2004 (first year we have good quality data available), from 4.6km to 4.2km.

I think it could be much lower: there are some handymen, in some months, for whom we have managed to keep inter-job distance below 3.0km, a further 30% below our recent average.

Anyway, now we have the tool in place to monitor this we can work on keeping that distance down further (and it only needed 2hours to churn through every job since mid-2004, some tens of thousands of data points; manages to figure out the distances for a few days at a time in just a few seconds).

Holy Grail is to keep every handyman on the same street all day (happens sometimes!). I have heard that there is a chap in Chelsea who washes cars on Tregunter Road, and makes his entire living out of that one street. Everyone uses him, and by the time he has worked his way to the end of the street, it is time to start again at the beginning. Not sure if this is true, perhaps any readers who are fortunate enough to live on Tregunter Road could confirm / refute?