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.

Becoming the Trusted Advisor

As many leave employment to become their own boss their first cheque will probably be earned through some form of consultancy.

While it's true that we use consultants for their specialist knowledge or competence, of equal importance is a consultant's character.


Those who excel as consultants very often spend time working on projects beyond their original brief. They are so trusted by their clients that they are regularly asked to tackle additional assignments, thereby significantly increasing their earnings per client.

So how do we build that trust? Contrary to what some believe, trust cannot be earned by good behaviour alone. In fact it comes from a combination of factors, all supported, or undermined by our level of self interest - the higher our self interest the less we are trusted.

This formula adapted from Maister, Green and Galliford's trust equation in The Trusted Advisor, Free Press 2001 illustrates the difference between character and competence

Relationship, Credibility, Dependability

Trustworthiness = --------------------------------------------------------------
Self-Interest

If we are to become trusted advisers then we must be willing to put our own agenda to one side.