Globespan – How a good company fails with 100,000 forward bookings?

In the light of the sad demise of Globespan it seems entirely sensible to recommend two areas for serious investigation by the Office of Fair Trading, the Administrators Price WaterHouse Cooper (PwC), and lastly but probably most importantly, the CAA.

In the first instance, I would like to suggest an Independent Review be commissioned (not sure who would pay for it, but paid in part by the key parties - in this case CAA, FSA, and the Government, representing lost PAYE, VATand Corportaion Tax - the taxpayers purse). The review’s brief should be a thorough examination of the mechanism for reimbursement of consumers’ monies (paid in advance, or reimbursement of expenses to complete their holiday) in the event of a (travel) company collapse.

The system now, which simply requires Credit Card Companies to bail out their cardholders, is not responsible, and may well have, in this instance and in hundreds of other cases, made a signficant contribution to the premature demise and eventual failure of a successful travel company like Globespan. I say successful, because at the time of its collapse in December 2009, it has 100,000 advanced bookings, which considering it is December is an oustanding achievement in anybody’s books.

The second suggestion is for Senior management and for all UK Travel consultancies. Tom Dalrymple MD of Globespan, the CAA, and the Travel consultancies, need to reflect deeply about the substantial power Dalrymple allowed E-Clear to have over his business. Allowing any other entity to weld such power is nothing short of co-dependence, completely irresponsible and appears to be an act of desperation more than inspiration. The problem with these kinds of heavily dependant relationships is that it is unhealthy for either party. Either the other party simply cannot bear the burden (as might have been in this case) or it seeks to walk away, causing potential havoc, and treating the relationship with disrespect (that it may deserve).

The sad demise of a much loved, well established and respectable Scottish travel firm, Globespan group, tells a dark tale.

An excellent commentary and feedback on Globespan, entitled The Missing Millions, written by Douglas Fraser, Business and Economy Editor at BBC Scotland gives the online researcher a broader picture of the Globespan story, and comes with the added bonus of the feedback from his army of avid Frazer ledger readers.

Did Tom Dalrymple have the best business support, advice and assistance around him, and the people he really needed to help him manage the crisis? Even if he didn’t have the ‘right muscle in his corner’ going into the crisis, it is little excuse these days as there are now much easier ways to find trustworthy, cost effective expertise fast, at the click of a button, using free online business support location services like Business Support Finder and the like, as well as the Regional Development Agencies (RDAs).

On another point, if I was a client of E-Clear I would seriously think of changing card processing company. This relationship should be ‘put in competition’ on an annual basis (as with all supplier relationships).

Scottish minister for Finance, Mr Swinney, quoted recently in the Scotsman believes vehermently that Globespan could have been saved. If you would like to read more try reading the article in the Scotman entitled:”Flyglobespan could have been saved“.

The demise may in large part be due to the contractual and operational arrangements that Globespan had with its card processing company - in this case a card transaction processing company based in London called E-Clear. This company is alleged to have been (with-) holding £35m from Globespan, and it transpired that it may be the legal obligations of card processing companies in the event of airline failure that could have been a key ‘driver’ in the behaviour and actions of E-Clear. If so, this would be a monumental professional oversight by the industry watchdogs, both travel and financial

Quoted in travel publication the TTG, in July 2009, Elias Elia is credited as saying that the travel industry is becoming riskier”. This is interesting since a previous client of E-Clear was collapsed businesses XL Leisure Group and Zoom Airlines. Interesting also is that Elia was quoted during the XL collapse as saying that his firm was insured for any exposure and the impact was “nothing we could not handle”.

A Slovakian low-cost airline SKY EUROPE which went into administration in June also appears to have had difficulties in obtaining its monies from E-Clear.

E-Clear has been also involved this month with the failure of Allbury Travel Group, which includes Libra Holidays, Argo and Jetlife. Libra Holidays had a good reputation, as well as Argo. They handled considerable holiday business each year, consistently providing good quality holidays and value for money for its hundreds of thousands of happy clients and customers.

Looking at E-Clear, prior to August 2008 the highly rated Deutsche Bank acted as E-Clear’s guarantor. It has not been explained why the bank ended the relationship, but it is likely that Deutsche Bank consider the risks has become too great to warrant the returns.

Looking for answers is always hard in the travel industry which, over the decades from the collapse of Clarksons in the 1970s, Intasun and Air Europe, Laker Airways, right up to XL Leisure, is a graveyard including good travel businesses as well as the bad (ask the CAA and ABTA for a list).

 Successfully managing medium or large travel organisations is not for the faint hearted, and it can be any number of factors that can cause the demise of a successful travel organisation.

google web history - why one needs to take notice of the changes

The latest google algorythmn change might affect internet marketeers and eBusiness strategy. Why?

Unless consumers click disable, then the DEFAULT SETTINGS for (YOUR CLIENTS, AND YOUR) ……GOOGLE Web History will be Enable customisations based on search activity.

What is the significance of this seemingly minor setting?

It will distort what the consumers see on their screens.

If the WEB HISTORY customisation is NOT disabled the reSults to their screen of a Google search will include the most visited websites of that search (TERM). Spend a moment to think about this.

In theory the first time the consumer searches they will get normal results. After that they will start to see most prominently the results that they have previously viewed most.

This may not be the best example, but this type of insight is another example why UK SMEs need to make sure they have use of the services of a Internet Marketing Business Consultant to get access to expert SEO advice. This is particularly important when SMEs are planning to invest in renewing their websites, as they need to be made SEO friendly (whatever one might read in the National press, written by journalists who do not make their living by selling online).

Of course, SMEs need business advice and assistance for planning their internet strategy. The best person to consult is an e-business consultant.

Without a Search Engine Specialist (SEO) most SMEs will be lost when it comes to making a profit from their online investment. The startling statistic is that over 90% of SMEs do NOT succeed in making a return on their investment (ROI) with their websites.

The question is….which statistic do you and your business want to be included in - the few that succeed online I suspect? If so, use the internet to start your research. Services like Business Support Finder. Last piece of advice is, whichever business consultant you use make sure that they have professional indemnity insurance cover.

Is Google Insights Flawed

The free resource programme from Google allows you to chart the rise ir fall of a search term from anything from a month to 5 years. First you enter a keyword or search term you would use for your business, in this instance “composite door” and the results show a huge rise in search volume over the last 5 years, representing the growth in popularity in this time. It also sows that compared to the UK, the USA only searches for composite door to a 8 to 100 ratio, proving that the UK is delievering the growth in tthis ype of business. This is all great stuff until you start researching customer behavior on the internet. a representive from MSN a few years ago claimed that up to 50% of search terms were new or very rearly used and that as time goes on. more and more of us use longer search terms (long tail).

So what has this got to do with Google insights? Well loads really, because when you use the tool for the search term “car parts” you see a drop over the last 5 years in volume of searches suggesting a decline in the industry. But being based in the car part industry we just know this is not true, so even though the Insights info suggests a drop, the market has increased.

What has really happened is that searchers are using more detailed search terms rather than generic terms like “car parts” and so insights only really measures search term usage, not growth in business.

With the composite doors market being so new, long tail searches are just now being used that much yet, but of course as awareness of the product increases, so will the varuation of search terms. So is Google insights flawes? The answer is no, if you know how to understand and use the information delivered.

For reference composite doors www.globaldoor.co.uk

Sir Gerry Robinson - what needs changing in the UK Care Industry (Dementia Care)?

Sir Gerry Robinson has been described as one of the best businessmen in the UK, and whose career is depicted in wikipedia. He is credited in turning round Coca-Cola’s UK fortunes (£7m loss into £17m profit within 24 months); leading the then biggest management buyout of Compass from Grand Metropolitan (1987) and turning round Granada’s losses in 12 months to profits of 10% more than anticpated best expectations.

 In December 2009 Gerry Robinson did a couple of BBC TV documentaries on Dementia and Care Homes in the UK, highlighting the successful strategies and those which need attention. Robinson sees change in the care of dementia in the care industry to be a very slow process. It was a joint venture with The Open University, which has produced a booklet on Dementia Care.

Robinson reflects that as an entrepreneur, if one’s homes are full, meeting all the regulations, and are economically viable then why would you want to change it? Yet he sees the standards could easily be raised.

He identifies an excellent example of how best practice in Merevale Homes, adided by leading Dementia Specialist Consultancy ‘Dementia Care Matters‘, and also shows how quickly the environment can be changed forn the better in the example of Thornfield care home, which was transformed in just 4 months.

As an observer the issues for me are the dangers of working as a professional, i.e. a care industry business adviser. Working in these difficult conditions, under constant scrutiny from outside authorities and relatives highlights the risk of litigation, and just how vital is and just how enormously valuable is Business Adviser Professional Indemnity Insurance is for a consultant working in the Care Indsutry.

Remote Access working - boost to productivity

After having wasted several hours, and several attemptes over several days, I have given up with LOG ME IN.

Small businesses don’t have the time to waste. Several frustrating hours on a couple occasions, and a cul-de-sac conclusion makes me  believe that this is a corporate strategy on behalf of LogMeIn (based in the US). LogMEIn seems uncessarility complicated, has restrictive timelimits etc. It pertains to offer a Free service but I have a distinct feel that it is merely a cheap trick and sales gimmick to entice the hapless consumer to pay £60 a year for a service that is free with other free Log Me In software reputable services such as TeamViewer. If this is for personal use it is free.

Business Consultants could use this software to log in to their pcs at home to access sensitive data and to reduce the requirement to carry expensive it equipment with them out of their office and away from home.

How Will VAT Increase Affect Businesses

On January 1st the VAT rate will go back to its normal 17.5% against 15% over the last year, for most businesses they believe it made no difference at all, 2.5% reduction on a price just isn’t that attractive in a world where 50% off is more the norm. There is an arguement that international contracts have been made in areas wher 2.5% could mean a few million here and there, but most small businesses have not benefitted from the reduction.

An area that may have gained is the new car market. Take away a few grand for the scrappage scheme then another 2.5% on the balance can make the difference between affordable and too expensive. But on new years day, we all be faced with an increase or will we?

Looking through many shopping sites for Chistmas I noticed all prices still ending in 99p. Considering most prices tended to end with the 99p anyway before the VAT reduction, I find it hard to see when we actually got the extra 2.5% back for anything. The reality is more like businesses just charged the same and gained a bit more into the bargain. So it is very likley that the consumer will not lose out for the VAT increase but business mat suffer.

Even business services are unlikely to be affected returning to the motor trade take business car lease as an example. Business car lease may cost more as a monthly payment, but as VAT is refundable and business lease falls into that bracket depending on CO2 emmissions, the executive owner will be no worse off. In fact it is hard to understand if the benefits of the lower VAT rate actually covers the costs of outting this into practice. Take accountants, or pricing within the retail sectop, it cost money to report takings and purchases in a different tax code.

So on January 1st will we see prices rise? I think there is a good chance we will, including those who did not reduce prices when it was reduced. More money to the accountants.