Petrol under £1 a litre

We finally see a supermarket war has broken out, and the result is lower petrol pump prices, finally back below that £1 a litre mark.

The thing is, the price of a barrel of oil has fallen form $150 to $80 but we’re still only slowly seeing 1p – 3p reductions working their way through to the pumps.  It’s also very interesting to note that it’s not the oil companies launching the price cuts, but instead the supermarkets, shaming the oil companies into following suit.

It has been said that it can take up to 6 weeks for a reduction in a barrel of crude to work it’s way through to the petrol pump price.  However, increases in the price of crude seem to have an immediate, sameday, increase in our fuel bills.

Do we have a case of the oil companies wanting to have it both ways?  Or is there any underlying commercial reason that the price cuts have been so slow to work their way through to the consumers.  Some my cite the financial crises, unstable markets, fuel companies being reluctant to pass on cuts incase the next week they need to increase the prices again, and all the bad PR that would bring with it.

Or is it simply the case that the fuel companies will charge what the markets will bear, and that during the last few weeks consumers, the media and everyone else has taken their eyes off the price of fuel, and have been watching the FTSE instead, and so the oil companies have simply sat quietly by and taken advantage of a couple of weeks of higher margins.

If this is the case, is it wrong?  Are we right to expect the oil companies to pass on the reduction in the price of crude, after all they are all commercial companies there to make a profit.  They know that there are lean times coming and that now is not a time for a low margin/loss making price war.  After all, many of the banks failed to pass on the government’s required 1/2 % interest rate cut onto new borrowers, choosing instead to keep it and use that to give themselves a bit of a cushion and to make a bit of a profit to cover those great big losses.

The price cut does however co-incide with the Prime Minsters’s call last week for the oil companies to cut the price of fuel.  It seems that someone is still keeping a close eye on them.

Can We See The Light At The End Of The Tunnel?

So, todays question must be have we reached the turning point yet? Has the government helped avoid certain financial crisis?  We all hope the answer is yes. If our government had not stepped in to help our banks out this would be most certainly a different day for all of us. 

We live in a society that has taken it for granted that they can afford everything, and infact we were somehow “entitled” to the WAG lifestyle that we saw splashed across all of the magazines. 

We can only hope that after LENDING just under £50 billion pounds to our banks, that’s just under £1000 pounds per person in the UK,  that thing will get back normal as soon as possible.

The Prime Minister has said that the investments are assets and “not just money being pumped in” and that the government intends to sell our investments at some time in the future when the banks are making profits again. 

The prime minister is very confident that our banking system will be back to normal in the next week or so and “we should now put in place new structures and rules for the future. We cannot simply be a short- term rescue deal to paper over the cracks.  Only a surgical approach is to get to the root of the problem will now work and ensure that the problems do not return.”   Stating also that the government will also work very closely with all the british banks to ensure that small businesses get as much assistance as they need, and to get lending back up to the level that the economy needs.  

The markets have rallied, George Dubbya has followed suit, and for a few hours anyway, things have been stable and calm.  Lets see what happens at 14.30, and hope that what we have here is the turning of the corner and the start down a path which will slowly lead us back to normality. But maybe this time a more normal version than we had before.

Thatcher v Brown

Black Monday 2008 and the events thereafter, including the effective Nationalisation of 3 major banks today, brings the 1987 Black Monday back into forefront of everyone’s mind.

Undoubtedly Alistair Darling’s bleak phrophesies of the beginning of Septembers are fulfilling themselves, and we truly are facing some of the worse economic conditions of modern history.  And although Governments, Chancellors, Economists and Policy Makers are currently busy trying to head off the worsening conditions, attention will soon shortly turn to recovery, and how we can kick start the economy, and the financial systems back to life.

In the late 1980’s Nigel Lawson took some very controversial measures which many believe we are now paying the final price for.  These included a slashing of the top rate of income tax, and reduction of the interest rates (yes, you youngsters, the government used to be able to set interest rates itself) to encourage a spending boom.   These forcibly, perhaps unnaturally, low interest rates are credited with the creation of that monster the housing market boom.

And out of these circumstances was created Maggie’s most famous creation – the Yuppie!  Greed is good, filofaxes, shoulder pads, sharp suits and Macintosh’s.  The young Urban Professional, frequently found guzzling the Beaujolais, and saying “OK, Yah” loudly into their brand new brick sized mobile phone.

These yuppies helped to spend the UK out of the recession, and during 1988 and 1989 UK growth was at 5% pa, twice the long term average rate.

So, do we need the yuppies back?  Is there room for the Yuppie mentality which is based on greed and self, particularly in a world that is now concerned about the environment, long term energy solutions and is supposedly a more caring, sharing place than the UK of the late 1980s.

We also have a very different political thinking in place.  In the 1980’s and early 1990’s Thatcher and Lawson were busy telling us that the Free Market was the only way, and that state involvement and ownership only distorted markets and interfered with pricing.  But since then we’ve seen that British Rail wasn’t that bad after all, and that running fundamental organisations such as the Water Utilities and the Rail Transport Network with the sole motivation of profit, isn’t such a “win,win” situation for the rest of us.

The Labour government has a strong ethos of social responsibilty.  How they pursue it, and how successful they are at achieving it, is a matter for everybody’s own individual opinion.  However we cannot doubt that it is core to the policies and decisions made by them.

In the early 1990’s the Midland bank was one of the first UK banks (in modern history) to verge on bankruptcy.  But instead of stepping in and protecting the millions of ordinary people that had savings and mortgages, the Thatcher government left it to the markets, and HSBC picked up the midland bank for a song.  No more the listening bank.

The 1990’s also saw hundreds of small banks & building societies swallowed up under the label of “de-mutalisation”.  Perhaps now we can interpret that term slightly differently – taking the benefits away from the members and giving them away to the shareholders.

The crash of BCCI saw a lot of UK organisations loose a lot of money.  Not householders, but local councils, charities and larger companies.  The UK government did not act, but instead left it to the companies and the banking and market regulators to sort it out.  Laissez Faire – let it be – the free market catchphrase.

Contrast this with the current headlines we are reading this week;

• UK to sue Iceland
• Government takes stakes in 3 UK banks
• Gordon Brown leads way through financial crises
• even “Gordon Brown Superhero”

So who will be the winner?  Who has got it right?  Is it best for Governments to get involved aka Brown, or sit back in the Style of Thatcher and just let it all run its course.  Unfortunately there is no quick and easy answer to that, infact we may now, 20 years on, be finally assessing the impact of Maggie’s decision to Let it Be.

photo credits; Del boy – BBC images

Thatcher & Brown – Dailymail.com

Top Five Strategies For Small Business In A Credit Crunch

In times like these, small business are under tremendous financial pressure. Finding Credit is a nightmare, large companies are taking longer to pay their bills and the cost of fuel is having a massive impact on the profits.

But small business owners will not go down without a fight, we have all had to work very hard to get to where we are now, and we won’t give up to the credit crunch without a fight.

The government has always encouraged us to grow our businesses as big and fast as we can, and obviously to do so we use money in the form of over drafts or loans from the banks. The bank mangers are now in a very tricky position, they still have achieve their monthly targets to achieve, but are thawrted by not being able to lend us the money we need.  All businesses, large and small are finding it hard to renew overdrafts, and this isn’t simply something that affects the traditional retail businesses usually hit during a recession, but also the business usually “untouched” by hard trading times such as accountants, solicitors and even GP Practices.

However, its not all gloomy news. According to the Federation of Small Businesses (FSB), entrepreneurs and small business owners are proving resilient in the face of tough economic conditions, are even finding new ways to turn a profit, despite a shrinking credit market.

If you haven’t already started thinking about how you will get though this credit crunch then its time you did, this isn’t a time to be burying your head in the sand. So here are five very helpful tips that may help you.

1. If not already, then join the Federation of Small Business (FSB), as a small business this is the organisation that speaks out for you, lobbying and publicising.  In times such as this, with the banks screaming for billions of pounds, small businesses need to stick together and shot together so that they have a voice that can be heard.   Additionally, member benefits such as protections from employment tribunals and legal advice regarding collection of money from customers can give you peace of mind against unexpected bills and stressful situations which in times such as this may hit your business harder than normal.  The cost of being a member starts at £100 a year, most of which many business can recouperate in the first year from saving on member discounts with credit card processing alone.
2. Keep a close eye on you cash flow, get your invoices out as soon as you can and if you are delivering goods direct to your customers offer a little extra discount for COD. The companies that take a long time to pay their bills can be a real pain, and chasing them for overdue money can be soul destroying.  Some of these companies may be large, high profile companies, but you have to ask yourself are they really worth the time and heartache, and more importantly is there a worthwhile profit at the end of it, after you have taken into account the cost of the sometimes 90days credit that have taken from you. Some times its better to let someone else have the grief. We also recommend that you always do a credit check on all new customers and agreeing clear credit terms up front, even perhaps taking a deposit, it could cost you a lot of money or your business if you don’t.
3. The costs of running a business today is very high, so you need to look at where you can make savings in every part of your business. But before you start sit down with the last years accounts, go though them work out what has become more expensive and how to reduce your overheads. Remember not to cut the quality of your product or service unless you are doing this as part of a change in strategy, and changing your marketing and pricing. You may consider moving to a smaller premises or subletting some of your existing space. If you are considering redundancies make sure that you do it the legal way, remember if your a member of the FSB they will help advice you.  Combine trips, meetings etc, make weekly chart for the office for all your deliveries etc, so that you and your staff make necessary journey only, its all about saving fuel and time.  And finally take a look at your fixed costs.   Many businesses don’t regulary review this because after all fixed is fixed.  However, in times like these it’s sometimes useful to go back to that blank piece and paper and work from nothing upwards.  What do you really need in order to carry out your business today?  Just because something has always been done in a particular manner it doesn’t mean that that you need to keep doing it that way.  Times such as these are good opportunities to look at your business from a different perspective.
4. Focus on keeping your customers. When Finances are uncertain, consumers cut unnecesserey spending. So do all you can to keep your customers coming through the door. Small discounts, loyalty schemes and regular communication are just three ways of letting your customers know you value them. Customer service is very important, they appreciate suppliers that give that extra service for their money, especially when times are hard. Good service, fast delivery and flexible payment terms can help persuade people to spend with you rather than a competitor. Just go that extra mile.
5. Marketing your business can be a real nightmare, there is the risk that your full page advert in the local paper just becomes lost in a paper full of other full page adverts all screaming out “special offer”.  It’s time to think about new and novel ways of advertising, and the best thing is that “novel” needn’t always be expensive.  For example In-game product placement is becoming a one of the fast growing forms of advertising, game players spend traditionally twice as long on the internet as any other user, and adverts get twice the average branding and exposure per advert.  Also gamers are a very chatty and connected group of people, and word of mouth and recommendations are always the best form of advertising.  After all, what could be better than using in-game product placement to advertise your business, pitching it in exactly the right context.  Because this is such a new and exciting form of marketing, rates can be cheap and deals can be found,

If anyone is interested in opportunities for their business in in-game marketing then contact us at Fantasy Couriers and we can discuss how we can put together the best possible package for your business.

The Ten Best Credit Crunch Survival Ideas

Every morning it seems to be that we get out of bed you reach to the sky and say,  please be a better day than yesterday. You go down stairs turn on the TV, the news reader says bad news I’m afraid, the country is not getting any better,  the Banks are not lending any money, the mortgage is getting harder to pay and the cost of living is getting out of hand, and you think will I still have a job at the end of the day.

Money worries and fears about the cost of living are starting to impact on almost everybody’s daily life, affecting most decisions about even the most normal of our daily events.  So we’ve put together a list of 10 simple things that are quick, easy ways to cut back and save money.   Don’t despair this is what to do, read all ten, they might help you.

1. Make sure all the family have a good breakfast before they leave the house, a good breakfast will fill you up and should help stop any snacks.   Be sure you keep the leftovers for the dog.
2. Always try and make packed lunches to take with you, soup and home made sandwiches are cheap and filling, and have a banana or apple for late afternoon.
3. Most families spend over £100 per week at the supermarket.  There are lots of ways to shave some of that off.  Plan a weeks worth of meals, so you know what you are buying for which meals.  Make a list and only shop for items you need, try the super markets own brands, don’t be distracted by the “buy-two-get-one-free” offers, if you really only need one you are not saving money by buying three.  
4. If you like a glass of wine etc, try to cut back to having a drink at the weekends only.  And if you smoke stop it now, just think of the vast amount of money that your wasting never mind your health and your families, by stopping you could save thousands of pounds. The money from the fags could pay for a good family holiday, and you which of those your family would prefer.
5. When traveling to work and school try walking, using a bicycle or public transport this will be the cheapest way to travel and will keep you fit. You could also invest in a family railcard, this should save about a 30% of the normal price. 
6. Fuel bills are the hardest to control, with the rising cost of oil, gas and electric its hard to decide how to heat your home, you just have make sure the kids don’t leave the doors or windows open,  lights are not on when they are not needed, set the timer for the heating and water to come on when you are up and not left on thermostat. Make sure that all washing machines and dishwashers are full before you use them. Always switch of every thing that on standby when not in use and change you light bulbs to energy savers.  And the easiest of the lot, put on a jumper before you turn that heating up.



7. You need to keep your finances in check,  the best way to do this is to work out a budget for the month. You need to look at every thing that you spend to get a true picture, look at your credit cards you maybe able to find a lower rate, look at how much your car costs you, how much you spend on clothes, entertainment, insurances etc.  Also keep an eye on those large number of small amounts that we all have set up on the direct debits, things such as the TV license, Sky television subscriptions, contact lens schemes, donations, magazine & newspapers subscriptions, DVD rental clubs, gym memberships.  Individually these items are usually only a few pounds each, but add them up and you are maybe spending a couple of hundred pounds a month.  Do you really need them?
8. Try to go on bicycle trips or walks on the beach or in your local parks, this you can do for free. By starting to walk or cycle everywhere you will start to see thing that you havent noticed before.  There are loads of free things that you can do as a family for entertainment.  Give up those weekend shopping trips and instead get out and about in the fresh air, go and see family and friends, spend some time baking with the children.  Entertainment doesn’t need to be expensive.
9. Check your suppliers and your policies.  Prices of Life insurance have plummeted over the last 10 years, if you arranged your life insurance as part of your mortgage then the chances are you are paying over the odds.  Get some quotes, check the alternatives, and move suppliers and save money.  Same goes for electricity, gas, credit cards, household & car insurances, breakdown etc.
10. I could go on for weeks suggesting to you how to save money, but before i was finished you would have gone mad. All the experts tell you to save, save, save,  but that’s not fun, and we need some treats in a credit crunch to make us feel better.  Go out for meal once a month, make sure that you spend some good time together because when finances get tight it can add a lot of stress into the family environment.  So treat yourself to a bar of dairy milk chocolate, buy yourself a lipstick as a reward for not spending £100 on those lovely new boots etc.  But the best value out there is the Internet,  spending time on Google will help you and your family gain knowledge about the world a round us. (Just stay away from the shopping sites!)  Try an online business games, choose one where you can play against your partner, get some friendly competitive rivalry going. Playing games provide a more affordable alternative to many other family leisure activities, and provides a sometimes welcome distraction from those brown envelopes sitting on the doormat.