Bank accounts

I understand the desire and need for a good credit rating, but you're going about it in one of the most expensive and bizarre ways imaginable. You'd get a higher credit rating if you took out a credit card and just used it to buy the Sunday papers and then immediately paid it off, as opposed to running two bank accounts that charge you an extortionate amount for no benefit to you whatsoever.

I'd urge you not to take the same thinking into business...

I know exactly what your financial situation will be in a year. £240 poorer than it could have been.
 
Glaucus said:
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This spreadsheet is wrong. You have Natwest as 'card reader but not for payee'. It's the opposite, no card reader is required unless you're setting up a new payee (or doing a few other things).

To log in and pay existing payees, check balance etc, no card reader is required.

I hate the fact that HSBC require you to log in with a card reader to check your balance. Still with them though, I just don't check my balance until I get home from work.

Incidentally, the HSBC Android banking app is awful and the Natwest one is fantastic. Natwest you can do almost anything but the HSBC one is basically just a balance checker.
 
EVH said:
If you know you can be 10x bigger, then surely it's worth the risk.

There's being careful, then there's cutting off your nose to spite your face :confused:
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Well I deal in books, and as time goes on it gets riskier. For example I paid £15.60 today to send 3 books together via Royal Mail, I only recieved £17 for them inc postage therefore I made £1.40 minus fuel.

Granted I send around 125 at a time, but still! So it means trying to find a new way to post small items. Like I say, risky... Not willing to go there on bank money yet!
 
twoblacklines said:
Well I deal in books, and as time goes on it gets riskier. For example I paid £15.60 today to send 3 books together via Royal Mail, I only recieved £17 for them inc postage therefore I made £1.40 minus fuel.

Granted I send around 125 at a time, but still! So it means trying to find a new way to post small items. Like I say, risky... Not willing to go there on bank money yet!
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I think you're definately a bit confused about both credit ratings and risk... firstly paying money for two current accounts which you don't use is pointless, getting a credit card and using it to pay off something with a regular fixed cost and not carrying the balance presents no cost you and is likely more beneficial for your credit rating...

as for the company example you'd be taking on the same risks though just on a larger scale... just set up a ltd company - its not like you're shipping a large quantity to the same customer... whether you're shipping X amount of books in one year or that same amount in one month the risk (from your customers/courier etc..) you've taken on is the same, you'll just realise any negative consequences of that risk sooner by doing more volume, if you've accounted for that risk properly and are making enough to cover things going wrong then it would seem silly not to increase in size if you're able to.
 
twoblacklines said:
Well I deal in books, and as time goes on it gets riskier. For example I paid £15.60 today to send 3 books together via Royal Mail, I only recieved £17 for them inc postage therefore I made £1.40 minus fuel.

Granted I send around 125 at a time, but still! So it means trying to find a new way to post small items. Like I say, risky... Not willing to go there on bank money yet!
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Surely you could have sent them for a lot less using something like Collect+ or MyHermes?
 
dowie said:
As for the company example you'd be taking on the same risks though just on a larger scale... just set up a ltd company - its not like you're shipping a large quantity to the same customer... whether you're shipping X amount of books in one year or that same amount in one month the risk (from your customers/courier etc..) you've taken on is the same, you'll just realise any negative consequences of that risk sooner by doing more volume, if you've accounted for that risk properly and are making enough to cover things going wrong then it would seem silly not to increase in size if you're able to.
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It is not the same risk at all - because now if my business goes bankrupt all I have lost is my seed money, whereas if it happened owing the bank money then I would be well and truly....

tom_e said:
Surely you could have sent them for a lot less using something like Collect+ or MyHermes?
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That's what I am researching as we speak. I am rural though therefore we don't have many services here, and I am not sending the odd parcel but up to 500 book's and CD's per day. RM is getting more and more expensive nearly every week as well as putting more and more restrictions on what can and can't be sent.
 
twoblacklines said:
It is not the same risk at all - because now if my business goes bankrupt all I have lost is my seed money, whereas if it happened owing the bank money then I would be well and truly....
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... fine? If you have a Limited Company thats the point - thats what the Limited means. Limited liability. Your risk is only the amount of personal funds you've put into the business should it go bankrupt (Well, provided it goes bankrupt for normal reasons).
 
twoblacklines said:
That's what I am researching as we speak. I am rural though therefore we don't have many services here, and I am not sending the odd parcel but up to 500 book's and CD's per day. RM is getting more and more expensive nearly every week as well as putting more and more restrictions on what can and can't be sent.
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You send that sort of volume and you're only now researching alternatives to driving your car to the nearest town, paying to park, and lumbering down the street with an armful of parcels?

No wonder you're incurring £15.60 costs before fuel on £17 of revenue. It must barely be worth bothering!
 
Vanquish-Storm said:
No its not, there was a price increase in April to fall in line with other delivery services. The restricted list did not change. :confused:
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The restricted list has definitely changed pretty recently, I tried to send something a couple of months ago and was told if I'd sent it a couple of days before I would have been fine but they'd tightened the restrictions starting that day.
 
tom_e said:
The restricted list has definitely changed pretty recently, I tried to send something a couple of months ago and was told if I'd sent it a couple of days before I would have been fine but they'd tightened the restrictions starting that day.
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What was you trying to send, if you dont mind me asking?
 
twoblacklines said:
It is not the same risk at all - because now if my business goes bankrupt all I have lost is my seed money, whereas if it happened owing the bank money then I would be well and truly....
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you'd have the same risk per transaction but you'd be doing a greater volume of transactions... if you sell X amount of books across a year or across a month you're still taking on more or less the same risk (assuming the market for these books is fairly liquid and increasing in size by that amount doesn't affect how quickly you can sell them on - presumably it doesn't as you're just going from very small business to a slightly larger but still fairly small business)

bank money vs your money is irrelevant - whole point of a ltd company is limited liability

I really don't see the issue - if the business works and you have the capacity to scale up then why wouldn't you? I mean if you would just be doing the same thing, similar sized transactions albeit more frequently then if anything it would be more helpful to you surely? - assuming your business model itself is sound and you've not just been lucky so far, i.e. assuming your transactions are in theory +EV then scaling, where you can, makes sense. Each transaction carries the same risk, increasing the number of them over a given period reduces your variance... basic stats...

http://en.wikipedia.org/wiki/Law_of_large_numbers
 
I'm with Nationwide have been since an account was setup for me when I was 2, now 26. They are spot on for all my accounts and CC I have with them. The iPhone app is good for checking your money / transferring to other accounts or people on the go aswell.
 
PeterNem said:
You send that sort of volume and you're only now researching alternatives to driving your car to the nearest town, paying to park, and lumbering down the street with an armful of parcels?

No wonder you're incurring £15.60 costs before fuel on £17 of revenue. It must barely be worth bothering!
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The nearest post office is 15 meters from my house.

The nearest TNT etc who only deal with large parcels is 15 miles away.

The nearest depot sized company is 32 miles away.
 
twoblacklines said:
For example I paid £15.60 today to send 3 books together via Royal Mail, I only recieved £17 for them inc postage therefore I made £1.40 minus fuel.
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So the relevance of the fuel comment unless you drive that 15 metres...? If it's not related to the context of posting them at least put it in a new sentence!
 
[TW]Fox;25025017 said:
... fine? If you have a Limited Company thats the point - thats what the Limited means. Limited liability. Your risk is only the amount of personal funds you've put into the business should it go bankrupt (Well, provided it goes bankrupt for normal reasons).
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I do have a LTD, I thought limited liability means that I cannot personally get sued? Howcome when you go for a business loan they ask you to put your house up as collateral if your business plan is not awesome?

Vanquish-Storm said:
No its not, there was a price increase in April to fall in line with other delivery services. The restricted list did not change. :confused:
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No, they KEEP changing it. I keep having to take a leaflet from the woman at the local branch as she is "obligated" to give me one even though I never read it.

dowie said:
you'd have the same risk per transaction but you'd be doing a greater volume of transactions... if you sell X amount of books across a year or across a month you're still taking on more or less the same risk (assuming the market for these books is fairly liquid and increasing in size by that amount doesn't affect how quickly you can sell them on - presumably it doesn't as you're just going from very small business to a slightly larger but still fairly small business)

bank money vs your money is irrelevant - whole point of a ltd company is limited liability

I really don't see the issue - if the business works and you have the capacity to scale up then why wouldn't you? I mean if you would just be doing the same thing, similar sized transactions albeit more frequently then if anything it would be more helpful to you surely? - assuming your business model itself is sound and you've not just been lucky so far, i.e. assuming your transactions are in theory +EV then scaling, where you can, makes sense. Each transaction carries the same risk, increasing the number of them over a given period reduces your variance... basic stats...

http://en.wikipedia.org/wiki/Law_of_large_numbers
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The business has been running for 18 month, I made a profit in the first year, I started it with £500 and currently have £2.5k cash, £35,000 in stock, and the only liability other than insurance costs is the business phone bill. I would say it is doing extremely well. But I ask you, if I take a big loan from a bank for a warehouse, forklift, and all the insurance that comes with this, and people stop buying books, what happens then?
 
PeterNem said:
So the relevance of the fuel comment unless you drive that 15 metres...? If it's not related to the context of posting them at least put it in a new sentence!
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Hi, it was relevant to that particular transaction as the one near my house is not open on Saturday mornings, which is when that order was posted.

I go to the one near my house every day, and then one 3 miles away in the afternoon if I am busy, or if it is the weekend. I don't actually bill my business for my fuel; I pay for it myself.
 
twoblacklines said:
The business has been running for 18 month, I made a profit in the first year, I started it with £500 and currently have £2.5k cash, £35,000 in stock, and the only liability other than insurance costs is the business phone bill. I would say it is doing extremely well. But I ask you, if I take a big loan from a bank for a warehouse, forklift, and all the insurance that comes with this, and people stop buying books, what happens then?
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The assumption was that your market was fairly liquid... you previously stated that it *could* be scaled to ten times the size... if this isn't the case then that is a rather different scenario... I'm not in the book business - I was commenting on the idea of being able to feasibly scale something, increasing the frequency of transactions etc... but choosing not to.
 
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