The Blog of an Entrepreneur

Posts Tagged ‘competition’

Anti-Competitive Behaviour of the Government

Posted in Entrepreneurialism on July 13th 2008 | No Comments

A few years ago there was an active industry with a good few hundred companies in the UK trading at varying levels of success, from big companies to small one man operations. This industry was just like any other, providing income and jobs to hundreds maybe thousands of people in the UK. This industry was the private numberplate industry.

That was until a Government agency, namely the DVLA, realised that they could make a lot of money from the private numberplate industry and decided to abuse their position and monopolise the market. They undertook extremely agressive marketing activities, from TV to magazine to Internet, and they basically “cleaned up” as the term would go. A Government agency basic abused their position, exploited it to great financial gain, and the end result was many businesses went into liquidation and many more lost their jobs. If this happened in the private business sector it would have gone through the courts with an anti-competitive law suit, but nothing happened, the Government which claims to encourage commerce did completely the opposite and did what in my opinion should be illegal.

Well guess what, it’s happening again!

Companies like one of my business, Quick Formations, are being forced by law to carry out very time consuming comprehensive checks on each and every one of our clients under the Money Laundering Regulations 2007. These checks not only take time, but also cost money too, and we must reflect these costs and time taken in the prices we charge. This isn’t just my business, but it is all businesses in my industry sector (that comply with this legislation that is, but that’s another story). However, what do Companies House do?

Companies House state that they are an “administrative” agency, who’s role is to store data for the public record. Yet, Michael Mouse is able to file forms 10, 12 and 288a with them and Incorporate a Limited company without question. He can use a completely fictitious address, he doesn’t even have to exist, and Companies House will incorporate this Limited company for Mr. Mouse without question. Mr Mouse can then go to one of a number of countries around the world to open a business bank account because a UK company does not have to bank in the UK, and then Mr. Mouse has all the tools he needs to launder all the money he likes out of the UK. By launder, and to quote the Governments own scare mungering about this required legislation, I mean to potentially finance terrorism. Companies House, a government agency, is openly flouting a legal requirements of the company formation industry. The businesses within the company formation agency must charge to cover the administrative burden of complying with this legislation imposed upon them, but Companies House by not complying with this same legislation do not and can abuse their position in the market. The DVLA story seems likely to repeat itself all over again.

However, I have a solution and have raised this to parliament. At first I thought it would come to nothing, but at least Sally Keeble MP is listening and has started to raise concerns and move them forward.

My solution is as follows;
All agents who provide a company formation service apply for an account with Companies House. The requirement of holding an account is that the agent must be registered with HM Revenue & Customs under the MLR2007 regulations, and as such comply with the regulations. Companies House then have no requirement to carry out due diligence on documents filed by that agent.
Any company formations filed by non-account holders will require due diligence, and Companies House will be required to operate under the same legal requirements imposed on all other businesses carrying out the same business activity. They will also have to cover their costs to carry out this activity, leveling the commercial playingfield.

Here is hoping that Sally Keeble can get some results on this.

Working with your competitors

Posted in Entrepreneurialism on May 9th 2008 | No Comments

Earlier this week my salesman for E-filing Limited was calling through a number of company formation agents doing his job, selling the services of E-filing. He was doing a pretty good job too.

He did hit a problem with one company, a problem which I had anticipated but I would never have guessed it would happen with this company in question. To understand why I’ll give you a bit of history.

When I started Quick Formations in 2002 the Pay-Per-Click market was pretty new in the UK, and at the start there was only myself and one other company formation agent bidding for key positions on the likes of Yahoo!, MSN, etc for our industry’s main search terms. It reached a point where we were trying to outbid each other and the end result was that we were paying way over the odds per click on our main search terms costing us both a fortune. It was a rediculous situation and needed to be sorted, so I gave the other company owner a call. We agreed to alternate weekly who would hold 1st place and the other would sit in second place. We had a gentlemans agreement between competitors and it worked very well… until the competition in the industry increased and then it just didn’t work because there was too many people. Whilst it was working though it saved us both a small fortune, a simple example of competitors working together.

So this company owner having experienced us working together, I was most surprised when he said he wouldn’t deal with E-filing because we are the “competition”. As a side note, the two companies are actually run and handled independantly at arms length .. just clarifying that point for the readers :-) .

As a business owner I spent a lot of time talking with my competitors. We share knowledge about our industry with each other, industry gossip, and market trends. Some of them I have become friends with and often enjoy a round of golf or good long ol’ chat over the phone or lunch with. I have learnt a lot from their strengths and they have learnt a lot from my strengths. The end result is that each of our businesses have become stronger and more profitable.

That is not that you should run off and become all buddy with all your competitors and give away all your trade secrets, because I have also been bitten quite badly by someone who after a year of chatting on the phone at least weekly double crossed me quite badly. So you must tread carefully when getting into contact with competitors and building these relationships, because some of them will be just out for the take, but there are others who are genuine professional business people. They are the intelligent ones who share a common goal where everyone wins, and these are the ones you need to seek out and work with. Share and share alike, you help them and they will help you. It’s all about give and take.

This is where E-filing Ltd works so well in that when I speak to my customers of E-filing I share knowledge I have gained from Quick Formations with competitors of Quick Formations, we all bounce ideas off of each other. The results speak for themselves, QFL wouldn’t be doing as well as it is today if I thought I knew everything and did everything based on my own opinion alone. It is good to bounce ideas off someone not only in the same situation as you, going through the same experiences as you, but in the same industry as you.

My advice for today, if you want to move your business forward at a significant rate work with your competition. By doing this both businesses will benefit, and you need to be willing to help the competitor(s) you work with. If you are not willing to do this then don’t bother even considering it.