RTA Business Complaints Case Study: Unrealistic Expectations

As a part of the ongoing RTA Business Complaints series, this week we look at customer expectations, and how promising what you can’t deliver can poison your reputation with consumers, and when the time comes, with potential buyers looking to purchase your company.

Your Reputation Matters with Potential Buyers

We understand the nature of reputation here at RTABusiness Consultants. We’ve been helping people all over the country sell their businesses for years, and in our experience, we’ve seen that a bad reputation hangs like an albatross around your neck when you’re trying to persuade a potential buyer that your business is right for them.

Nothing will give your firm a bad reputation quicker than a slew of angry customers. Customers get angry for a number of reasons; one of them is when your product doesn’t deliver what you say it will. They feel as though they’ve been swindled, take to complaints forums and before you know it, your reputation is shot to hell. Just ask National Health Specialists (NHS)

The RTA Business Complaints Case Study

A New Zealand-based health specialist, NHS released a new product and marketed it as a miracle pill. The Lemon Juice Diet Rapid Slimming Capsule was billed as a slimming miracle. Of course, the company promoted the pill with a range of advertisements.

The advert made the mistake of promising that users would slim by two kilos every 24 hours. Naturally, this turned out not to be true, and someone complained to the country’s Advertising Standards Authority (ASA).

Remember: Customers Don’t Like Being Lied To

The ASA were swift and brutal in their judgement. They ordered the ad be removed from circulation, noting that it promised unrealistic and unsafe weight reduction, which the parties in question were unable to substantiate. Of course, its generated press and the complaint, along with the decision made labelling the NHS as a disreputable company, will linger like a bad smell, damaging their reputation going forward.

At RTA Business we hope this example reminds you that customers won’t take being lied to. If you want to build up your company with an eye to one day selling it, you need to remember that an angry customer will complain, and that complaint will reflect badly on you when it’s time to find a potential buyer.

RTA Business Complaints Series: Why Do Customers Complain?

As part of the RTA Business Complaints series, this week we get to the root of the problem and ask, just why do customers complain.

Advice from RTA Business: Complaints are Dangerous!

In RTA Business’ experience of helping business owners up and down the country walk away with the best possible deal they can get when they decide it’s time to sell their company, we’ve found that complaints can be detrimental. Rack up enough, and be unlucky enough for a potential buyer to see them? They’ll think your firm has too many issues to handle, and that it’s not worth the effort.

That’s why you need to stop complainers in their tracks. So far we’ve featured articles on how best to do so, and how not to do so, now we want to address the larger issue of why they do so. If you know this, you can stop complainers before they even have a reason to open their mouths.

The Top Five from RTA Business

We’ve seen a lot of businesses deal with customer complaints in our time, and our experience has shown that these are the top five reasons a customer takes to the phone and expresses their dissatisfaction:

1) Faulty Product: The number one reason; if you’ve sold them a faulty product, of course they’re going to complain if only to get their money back.

2) Poor Customer Service: If a customer feels as though their trade isn’t valued, that you’ve sacked them off, they’ll complain out of sheer indignation. People don’t like to feel that their custom is unappreciated.

3) Not As Advertised: if a customer feels that your product or service is not as advertised, they will feel lied to. Nobody likes being lied to, and you can guarantee that they will complain and make sure everyone thinks you’re untrustworthy. A seriously dangerous complaint for your business model.

4) They’ve Been Left Waiting: If you’ve left a customer waiting, it doesn’t matter how effective your service is, or how valued you make them feel, they will complain, because you’ve wasted their time.  As they say, time is money.

5) Because They Can: Some customers will complain simply because they think they can get away with it, or because they’re having a bad day, or because they want their money back after they’ve looked at their bank balance and realised they haven’t got as much as they thought. Nothing you can do really except shut them down.

Once you know why a customer complains, make sure you deal with it before it can ever become a problem that causes a potential buyer to think that your business just isn’t worth the effort. 

Here are RTA Business’ Top Five Reasons a Buyer Won’t Purchase Your Company

If you’ve put your business up for sale and it’s not selling, you need to know why so you can rectify the problem and clinch that elusive buyer. That is why this week, RTA Business has listed its top five reasons a buyer is saying no to the opportunity to purchase your business!

As one of the leading business sales brokers in the UK, RTA Business consultants has been facilitating lucrative business acquisition deals for a fairly long time, and as such, we know what works and what doesn’t.

Get Proactive and Show a Buyer the Value of your Business

More to the point, we know that you have put your business up for sale because you want to make money. The longer you have to wait, the longer you have to wait to get your hands on the cash, which can be frustrating or down right obstructive.

In our experience if a buyer isn’t biting, there are several reasons why, and there’s always something you can do about it.  Get proactive so that when the buyer of your dreams comes along, sees the value of your business and makes you an offer, you can reap your reward for building up your company into one to be proud of!

In order to do that, you need to identify the problem, and in RTA Business’ experience it’s probably one of the following:

1     They Don’t Know You: Even with RTA Business on your side, you need to let people know who you are, otherwise, how will they know why our business is so valuable? Always make sure you have a killer marketing strategy.

2      They Don’t Know the Value of What You Do: We live in a world of sceptics and even profit margins sometimes won’t convince them of the value of what you do. Craft facts, statistics, data, testimonials etc. into your marketing strategy to present a solid case to potential buyers.

3      Profit Margins: In many cases, a buyer may lack interest because your profit margins are too low to catch their eye.  Diversify your service and show them other avenues they can take advantage of to increase revenue with your business.

4      They don’t understand Your Product’s Appeal: In other words, the buyer doesn’t really understand the consumer base you market to. In this case, double down on market research so can readily show the gap in the market that you cater to.

They Believe the Profitability of the Business Isn’t Transferable: A potential buyer may be of the opinion that the company only works because you are at its head. Convince them otherwise by highlighting the key role played by your employees and convince said employees to make a long term commitment to the firm.

RTA Business Asks: Why Should You Encourage Leadership in the Office?

The success of your business depends on a number of factors, however RTA Business we would suggest that increasingly, it depends on not just leadership you display, but the leadership that your employees take as well. Why is this?

The Changing Role of Leadership in Business

At RTA Business – the firm dedicated to helping you make a profit when you decide it’s time to sell your company – we recognise that potential buyers want to take on a business that has already shown that it is a success. Fostering leadership qualities at every level, is in our opinion, one of the best ways to do this.

It’s understandable why many people still believe that leadership is a top down matter. After all, this is the view that has dominated for years, and people are often reluctant to accept that we are living in an evolving business climate, where initiative often yields the highest profit margins.

The Relationship between Initiative and Expertise

And initiative really is the key point here. The modern company is trading in a diversified world. That is why it pays to practise a wide business model that takes advantage of every profit margin avenue possible, to generate revenue. Increasingly, a business achieves this by hiring a diverse staff roster that has differing areas of expertise.

Therefore, it’s quite clear that you are hiring employees with different skills sets from your own to fully take advantage of all the opportunities displayed to you in order to become a success. They have the knowledge you don’t, which means that they can spot the profit potentials you may not be able to recognise. You need to encourage leadership to ensure that your employees have the confidence to run with these observations and bump up your profit margins.

RTA Business on the Need for Leadership

This is why you need to encourage leadership in the office. The only way a that a buyer is going to purchase your business is if you show them how it can benefit their bottom line, and hiring a diverse staff roster that is secure in using their specialised skill set to make your company successful will do that. At RTA Business, we know that encouraging a culture of leadership and rely on the skills of those you hire.

Pub Sector Receives Major Help from UK Government

If you trade in the beleaguered UK pub industry, there is good news this week, as the government has announced new code of practise designed to help aid growth in this key sector. What could this mean for your long term prospects if you hope to one day sell your pub?

At RTA Business we specialise in giving you the help you need when you decide it’s time to sell your business, so that you can make the most money possible from the result of that sale. We understand the difficulty this sector has had in recent times and welcome this news.

The Changing British Pub Landscape

The pub industry was once one that sat at the heart of British commerce. Back in the 80’s and 90’s, there would have been no problem selling your pub, because they were the centre of British life, regularly drawing in custom. Therefore, they were highly lucrative and valuable to potential buyers.

However the world, and the pub industry, has changed. The gradual encroachment of bars on pubs’ core client base, as well has the ramifications of the smoking ban, has driven customers away, forcing pubs up and down the country to close and making them that much harder to sell.

A Statutory Code to Control Costs

This is why the government has made the announcement of new rules that are aimed to help struggling pub tenants cover the cost of beer payments or rent. Specifically, this statutory code includes  the right to request a rent review after a five year period,  which followed after a raft of sustained complaints about the infamous “beer tie.”

Business Secretary Vince Cable spoke was reported by the BBC speaking on the issue. Cable said: "Far too many landlords feel their income is squeezed by big pub companies. So today we are taking action to make sure they get a fairer deal." 

RTA Business on the Potential for the Pub Industry

Although this change primarily concerns those who rent, it does have a provision that says that tenants of companies with over 500 pubs, will now have the right to request "parallel free-of-tie rent assessment," to show whether they would be in a better position going independent. This could theoretically open up a pathway to pub ownership, which could generate massive revenue when you eventually sell.

At RTA Business we also recognise that these changes will have wider effects for pub owners, as it will put them in a stronger position with potential buyers when it’s time to sell.

CBI Predicts Interest Rate Rise

The Confederation of British Industry has predicted that the national interest rate will rise early next year, becoming the third major organisation to make such a claim. What could this mean for you if you are looking to sell your business in the next year?

The UK’s Benchmark Interest Rate

Interest rates – the amount of a loan that is charged as interest to the borrower – is crucial to the business industry. That is because interest rates are a huge economic factor, and as such, any change to national interest rate policy has the ability to either positively or negatively impact businesses on a national scale.

The Bank of England set their benchmark interest rate at 0.5% towards the latter end of last year. They did so in order to stabilise the economy and stimulate growth. The fact that financial experts have now predicted that the UK will return to pre-recession levels of growth by summer this year, would suggest it is a policy that has benefitted the nations finances and put you in a strong position if you are looking to sell your business right now.

Therefore, it is not surprising that the Bank of England announced that it will keep its benchmark at 0.5% for the next month, and most likely for the foreseeable future. This means that the environment that has fostered the economic recovery will continue and that can only be a good thing.

The CBI Prediction

However, analysts everywhere agree that the policy cannot, nor should it, stay in place forever. If it stayed in place too long, it could hamper long term growth which would weaken everybody’s bottom line.

Specifically, the CBI has suggested that by early 2015, the Bank of England will have raised the interest rate to 0.75%.  It has also raised its UK growth forecast from 2.7% to 3% for 2014. The National Institute of Economic and Social Research (NIESR) and the Organisation for Economic Co-operation and Development (OECD) have both taken similar steps.

The CBI also commented on business owner confidence: The BBC reported that they said: "We're sensing entrepreneurs across the whole economy - service, manufacturing, exporters - and even the domestic economy feeling more confident [and] making more investment."

At RTA Business Consultants, we see that the CBI has suggested that for the next year, the recovery should remain stable and that it is and will continue to improve business leader confidence. That means that it really might be the best time for you to sell your business.

Financial Regulators for Treasury Review

UK Chancellor George Osborne has announced this week that the Treasury will conduct a review of the enforcement processes adopted by financial watchdogs, to ensure they are in line with national regulations. What could this review mean for you if you are looking to sell your business right now?

Financial watchdogs such as the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are the final arbiters for disputes over financial products and services in this country. Should your business enter a dispute of this kind, they will resolve it.

George Osborne Speaks

The Chancellor of the Exchequer, the government minster ultimately responsible for financial matters in this country, and the executive in charge of the Treasury, has said that he is planning to examine whether both the PRA and FCA were striking the “appropriate balance of fairness, transparency, speed and efficiency”  in carrying out their remit.

This decision to further examine the activities of financial watchdogs comes at a difficult time for the FCA in particular, as it has come under fire as of late for the way it is carrying out its mission to police the financial market.

Specifically, the Chancellor openly suggested that the watchdog had committed an “egregious” error in the manner in which it briefed local and national media on its yearly business plan last month. It’s important to note that this incident did not result in any action being taken.

The FCA under the Spotlight

The FCA in particular has been far more effective than its predecessor, the Financial Services Authority (FSA). Not only has the FCA taken a stronger line against individuals, it managed to raise the total value of fines from £35 million in 2009 to £472 million in 2013.

However there has been a trade off, and that has been a lengthening of the period of time FCA investigations take and an increase in the number of incidents being referred to the Association’s enforcement division. Experts suggest that these are key areas the Treasury will investigate.

The Financial Times spoke to Nathan Willmott, a partner at law firm Berwin Leighton Paisner, on the issue. Willmott said: “The main concern from all sides is the time it takes from launching an investigation to making a decision on whether there is a case to be answered, and then going through the FCA’s internal decision-making process.”

At RTA Business Consultants we realise that the significant role the FCA in particular plays in the financial sector means that any finding by the treasury could have a significant impact on the business community. If you are looking to sell your business right now, it is certainly an issue worth keeping track of.

SSE Energy Prices Freeze Until 2016

Major energy firm SSE announced this week that it’s freezing energy prices until 2016. A big move by any measure of the imagination, it’s a move that could benefit businesses up and down the country that have their energy supplied by SSE.

Last year as a result of Labour leader Ed Miliband swearing to impose a 20 month energy price freeze should his party sweep next year’s election, the big six energy companies came under fire for just how high they were raising prices.

The amount of press it got last year was astounding, and future estimates showed that it somewhat hurt profit margins as customers abandoned the big suppliers in droves heading to smaller rivals for their energy needs.

It looks like SSE has now addressed this concern as they have come out saying this week that they have decided to freeze energy prices until 2016. It’s a move that been hailed by the company and customers alike.

Representatives of SSE said that the move, even though it would lower profit margins in the short term, would streamline its service to cover the shortfall, another move that is likely to benefit customers in the long term.

Streamlining plans are already under way and the energy company announced that among those plans will by the axing of 500 jobs across the board and the development of at least three offshore wind farm projects to promote greener energy. The company predicts that these plans will save them at least £100 million, which they can then pass on to customers.

Despite criticism from industry rivals, SSE chief executive Alistair Phillips-Davies hit back, saying that "delivering the lowest possible energy prices" to customers was "central to everything we do". He further claimed that "we're looking to do whatever we can to bring down prices for consumers."

He also called the government to remove energy taxes out of bills and collect them through general taxation instead. This is most likely a reference to ECO Funding, a green energy initiative that the government funds through the taxation of the major energy companies.

This is bound to have an effect on any business that gets their energy from SSE, lowering bills significantly considering the amount of energy used on a daily basis. It’s also likely that it will further boost the recovery UK economy, which will have benefits for businesses across the board.

This money can then be fed into ensuring the company is primed and ready to sell when the time is right. At RTA Business Consultants, we believe that this could help you sell your business.

Summer Should Signal Pre-Recession Levels for UK Economy

Experts across the nation have told everybody this week that by the summer the UK economy should be back to pre-recession levels. At the RTA Business blog we ask what exactly this means and what it could mean for the business sales industry.

Business lobby group The British Chamber of Commerce (BCC) has gone on record this week stating that the overall size of the UK economy will return to pre-recession levels by the time we hit the summer. Specifically, they said that the largest measure of economic size, GDP, will exceed the level it was measured at when 2008 began, before the financial crash.

The BCC has now actually upgraded its economic growth forecast for the UK economy for 2014. Whilst it originally stood at 2.7%, it has now risen to 2.8% on the back of a slew of strong data about the trajectory of UK business.

Furthermore the BCC has predicted a strong year for the finance industry in 2015. They have upgraded their 2015 growth forecast from 2.4% to 2.5% and have also predicted that the end of 2015 will see the end of the Bank of England scrap their policy of keeping interest rates unusually low. The BCC predicts that the Bank will raise interest rates from 0.5% to 0.75%.

BCC director general John Longworth commented on these figures. Longworth said that "our economic recovery is gaining momentum." He then elaborated by saying that: "Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition."

It’s also notable that back in December, when the BCC made its original forecasts on UK growth, they said that the nation would reach pre-recession levels of growth by autumn; now they’re saying it’ll be by summer.

However it’s not all good news. The BCC also warned of unacceptably high levels of youth unemployment. Longworth said in the  issue that: "We urge the chancellor to use this month's Budget wisely by incentivising businesses to hire young people so that the next generation of workers are not left behind."

So it’s quite clear from these figures that the economy is only set to expand in 2014; this in turn will help businesses grow which can only benefit the business acquisition industry. More business owners will be looking to buy due to stronger economic prospects, and those looking to sell will be in a better position to do so. It really might be a record summer this year in the UK!

UK Service Sector Holds Steady

Reports released this week suggest that the UK service sector has continued to expand by strong margins in the second month of 2014. Considering the role the service sector holds in the overall national economy, what could these figures mean for the business sales industry?

The numbers were strong; the Markit/CIPS Purchasing Managers Index (PMI), the primary source for measuring real economic activity in the UK, for the industry held at 58.2. This was slightly down from the 58.3 figure for January.

However when you consider the fact that anything above 50 on the scale means that the sector has expanded, we see that the service sector is still in growth mode. Furthermore the Markit Survey concluded that confidence in general economic outlook for the nation was at its strongest since September 2009, the height of the recession. It has been growing for the past four months.

The survey was part of a slew of surveys regularly conducted by market experts over the progress of both the service and manufacturing sectors. This month figure generally pointed towards a trend of the service sector outperforming the manufacturing sector. In fact experts have used this to suggest that the service sector is the main driver of British economic growth.

Chris Williamson, Markit's chief economist spoke on the issue. William said that “alongside vibrant growth in manufacturing and construction, the upbeat picture of the services economy points to the country enjoying another quarter of robust economic growth of approximately 0.7%." 

Williamson expanded on this point, explaining that "there's no end in sight to the good news: with business confidence in the services economy rising further in February, growth should pick up again in March, adding conviction to the growing consensus that the economy is set for its best year of growth since 2007, with the rate easily surpassing the 1.8% expansion seen last year."

 So it’s clear here that growing confidence from business leaders is enabling expansion in the service sector. This is further evidenced by the fact that expansion in the sector has resulted in its strongest levels of new staff hire since October last year. Markit has made it clear that it sees these figures as further proof that the British economy is now in sustained recovery.

At RTA Business, this not only assures us that business leaders are ready to aid growth, meaning that they are more likely to look at acquiring new business, but that this activity will be particularly heightened in Britain’s booming service industry. 

When is the Right Time to Sell Your Business?

With the global economy moving out of recession many people are feeling more confident about making a profit on the  sale of their business. In light of this at the RTA Business Consultants Blog we decided to examine the issue in greater detail.  So when is the right time to sell your business?

RTA Business is a company that specialises in business acquisition. We have developed a reputation for aiding our customers in selling their business for an admirable profit margin. This means naturally we’ve had to analyse what goes into selling a business.

One core principle that we’ve strictly adhered to in becoming one of the UK’s largest business acquisition companies is that timing is everything.

This is a principle which applies to many areas of life. If you for example are looking to approach a company for a business deal, you can’t do it at any time. You have to watch and wait, see when their circumstances are more likely to lead them to be receptive to such a deal. Timing can often be the difference between failure and success.

So what are the rules of timing in business acquisition? The first one is one we’ve already touched on. Watch the market for your industry. We’ve already mentioned that the global financial recovery has meant that it’s more profitable to sell your business.

However you also have to watch your individual market. Markets rise and fall all the time; current affairs often see prices fluctuate on a daily basis. However if you watch and analyse your market you’ll be able to spot trends; use these trends to indicate when your business will be more lucrative to sell.

The next crucial element to consider is profitability. Has your business reached its prime profitability to sell?

The logic behind this is that a buyer will not want to purchase your business if they won’t make any money. It’s more about potential .They need to see that they have the potential to make money. If your business doesn’t have any potential prospects, it’s not going to sell.

The third factor is the buyer itself. Are there the buyers out there to actually buy your business?

This may seem obvious but it really isn’t. If you’ve built up a business on an idea that hasn’t fully caught on in the wider business community, there isn’t going to be someone you can sell to. They won’t have had the time to develop. There’s no point putting your business up for sale if there isn’t a buyer out there.

Timing is everything in this world. Make sure that when you decide to sell your business, you get the timing right. RTA Business would be happy to help you find the perfect time to sell your business.