The vast majority of businesses in the UK employ less than 10 people.
Inevitably run by the owner, that person has all the challenges of growing the business, managing people and dealing with suppliers. So, it is not surprising that many tasks are dealt with quickly, including sorting out the telecoms package for the business. Unfortunately, there are many traps for the unwary.
Here are some simple things to watch out for before you sign:
One of the easiest and most essential things to check is if the potential supplier has signed up to the Ombudsman scheme. It gives free binding arbitration in the event of a dispute. A list of members can be found at http://www.ombudsman-services.org/memberlists/communications/. If the company you are considering is not a member, you have to ask why not?
There is quite a bit of protection for small businesses but many are not aware of it and suppliers rely on that ignorance. For example, auto renewal of phone contracts for small businesses was banned several years ago yet many suppliers still try to get away with it.
Watch out for being lured by eye grabbing lowest price promise especially for line rentals. What you usually find is that the savings here are more than offset by higher call charges. Or, even more sneakily, there are hidden charges such as minimum call charges, call set up fees and call durations being rounded up to the nearest minute. All of which inflate the overall bill.
Also watch out for price rises post the start of the contract. As a small business you should be given notice on any price rise and given the option to cancel within 30 days. But many suppliers hide the notification in bills or on their website. So, the only way to be sure is to check the bill regularly against the contract and insist on an additional contract clause that should you spot a price rise at any time you have the right to cancel.
Short term gains
Many small businesses sign long term deals to avoid upfront payments – but this can be a false economy. Who knows where the business will be in five or seven years time? As always, something that appears to be free at the time can have long term cost consequences.
Some businesses keen to save more money are tempted to use residential services. There is a simple answer to this – don’t. While you may save a few pounds on monthly rentals, what you are losing is priority if there is a fault. How much revenue would you lose in a day if a potential customer cannot contact you?
It is a similar story with broadband; the best advice is don’t just buy on price. While many people view it as a commodity – in reality there are great variations in contention ratios, network capacity, quality of ‘free’ routers and customer service. Again, it is important to ask what is the cost of a day’s lost internet? For example, we know of a pub that used wifi card machines and chose to go down the residential route because it would save money (a £10 a month saving) but the pub suffered a fault at 4pm on a Friday. It wasn’t fixed until late on Monday meaning they lost almost £6,000 in missed takings over the weekend as it was cash only.
Another common mistake for small businesses is think; ‘I will just use my mobile number’. Plenty of research has shown that most consumers and businesses trust companies with only a mobile number far less than those that appear to have a landline number. The appear bit is important as it is now very easy and cost effective to have a landline as an app on your mobile. This can help your company appear bigger than it really is, as well as helping business owners separate their work and personal lives.
Obviously review sites can act as a guide but, be aware, not all are as independent as they seem. For example, Trust Pilot are owned by same company that owns Verastar (previously Unicom). They were fined £200,000 by Ofcom for miss-selling. And there are regular instances where people who have left negative feedback on Trustpilot find that it has disappeared later on.
The overall message is that communicating with customers, partners and suppliers is key for all small businesses. So, ensuring you have the right solution for your business at the right price, without any nasty surprises, is certainly worthy of management time.
About the author
Dave Millett has over 35 years’ experience in the Telecoms Industry, having worked in European Director roles for several global companies. He now runs Equinox, a leading independent brokerage and consultancy firm. Working with many companies, charities and other organisations, he has helped them achieve savings of up to 80%. He also regularly advises telecom suppliers on improving their products and propositions. www.equinoxcomms.co.uk