Who needs banks

One of the first meetings an entrepreneur sets up, is with his bank manager to discuss opening a business account.

Many still believe this partnership between enterprise and bank is a marriage that will guide and support the business throughout its life.

My own experience and that of most business people suggests this hasn't been the case for some time and its getting worse. Service levels have dropped drastically over the last ten years while charges have risen and in some cases become quite devious. For instance Barclays allegedly deduct daily debits first, potentially putting the account into overdraft before applying credits.

If you are about to start a business, before you commit your future to a high street bank take a look at what else is on offer;

• PayPal is becoming an ever more trusted way of paying online


• The Post Office will accept cash deposits without charging whereas banks penalise those depositing cash


• Online accounts that don't offer branch access are often free, Investec is worth a look


• Funding a new venture shouldn't be difficult in an era when savings interest is so low. You just have to let potential investors know you are looking for funding. Write a micro business plan and email to people who might either invest or recommend you to a friend.

I'd far rather invest some of my money in an exciting start up than leave it in the hands of the banks.

Starfish are the future

I've been reminded of this book by two seperate people in the past 24 hours, I predict that 'decentralisation' will be the next buzz word. Of course true decentralisation is not about big organisations letting go a little, its really about individuals taking control by going it alone.

The Starfish and the Spider by Ori Brafman and Rod A. Beckstrom

If you cut off a spider's leg, it's crippled; if you cut off it's head, it dies. But if you cut off a starfish's leg it grows a new one, and the old leg can grow into an entirely new starfish.

Some organisations are just as decentralised as starfish, with no control centre or grand strategy. Think of craigslist and the original Napster, run totally by their own customers. Or Alcoholics Anonymous, which has thrived for decades as a loose network of small groups. Or even al Qaeda, which is so hard to destroy because its cells function independently.

"The Starfish and the Spider", based on groundbreaking research into decentralised organisations, proves that this type of leadership is primed to change the world. Major companies like eBay, IBM, Sun, and GE are starting to decentralise, with great results. Decentralisation isn't easy for people who are used to the classic chain of command organisation. But as readers will learn through this book's fascinating stories - ranging from the music business to geopolitics - it can be a very dangerous trend to ignore.

Traders and Toilers

You are probably very good at your job, so in theory you could run a successful business doing what you already do well, or could you?

It seems to me that the most successful entrepreneurs are rarely highly skilled at making the product their business provides. Richard Branson probably can't fly an Airbus but that doesn't preclude him from being a very successful owner of an airline.

As one considers the leap from employment to self employment its important to assess whether we have the talent required to grow a business. Here are a few questions which might indicate the level your entrepreneurial instinct;

What did you trade at school?
It might have been pens, records or books, it doesn't matter what it was. The fact that at an early age you were trading is a sure sign you'll be a success in business.

Do you advertise and sell your old cars or part exchange?
Part exchange is the easier option but its also a sign that you'd rather take the easier route than squeeze out the extra profit that's essential for a business to succeed.

Without checking, write down how much cash you have on you now.
One of the wisest sayings in business is "Turnover is vanity, profit is sanity but CASH is king"
If a business can control it's cash it wont fail, this means not just knowing what's in the bank at any given moment its also about being able to ask for the cheque without embarrassment or hesitation.

So if you are about to make what could be the biggest decision of your life take a moment to assess whether you really have what it takes. If you have doubts don't give up, get input from others and look for a partner that balances your skill set.