Forget the banks and the economy. The biggest barrier to small business growth is BT
Politicians are always banging on about how small businesses hold the key to the exit gate from the triple dip recession. As soon as a journalist shows up at their constituency offices they start rolling their eyes in despair at the banking sector’s refusal to turn on the SME lending taps even after the taxpayer has been so kind as to bail them out of their own mess. Then they love to wax lyrical about how late payments are threatening the very existence of the sole trader. They can’t resist an opportunity to scold the likes of Tesco for exploiting its supply chain and are usually fervent champions of any initiative that pressurises corporations into paying their bills on time.
As a registered voter and the owner of a one of the UK’s 5 million small businesses, I must say I’m grateful for all this attention from Westminster. Late payments are a bore, and I don’t consider my bank to be much of a valuable partner in my quest to create jobs and add my million to Britain’s GDP. But, when it comes to getting paid, I have options. Like hiring a debt collection agency. Sure, they’re expensive, but they’re also very effective and I can run my business safe in the knowledge that if a client consistently refuses to pay its bills, I have a Plan B that will help me recover most of the money at least.
Likewise, when I needed to raise cash to fund our recent office move and my bank offered me a loan at 14% with personal guarantees from both directors, I was able to tell them where to go. That’s because London has a vibrant investment community and there are heaps of private small business finance specialists who are more than willing to oblige me with something a little more palatable.
I launched my business as a naïve 27-year old in the black heart of the recession in 2008. It was hell. No one was buying tech PR or video production services and I was new to the country, which meant I lacked any real network from which to source leads. Yet the biggest challenge I have faced as a small business owner has not been a bank manager’s inability to return my calls. Nor has it been a client’s inability to pay its bills. Rather, the biggest threat to my small business, on three separate occasions in our four year existence, has been BT’s inability to furnish us with the internet and telecoms facilities for which we have paid good money.
The first challenge came in June 2010 when we moved out of our serviced offices into our own premises. What should have been an exciting milestone for the business, was instead one of the most stressful and unpleasant processes we have had to endure. The BT engineer’s triple failure to turn up and connect our new office to the switch resulted in a series of tearful conversations in which I was pretty much reduced to begging the call centre operator to help me resolve the issue. This might sound extreme, but we are a technology PR agency and our entire existence depends on our ability to respond quickly to breaking news. This is something that simply cannot be done without a telephone and a high speed internet connection, so my whole business that I had so painstakingly built from nothing was suddenly under threat.
My decision to use BT as our telecoms service provider was not the type of free choice you would expect to be able to make in a capitalist democracy. I researched all my options (BT, XLN Telecom, Opus, Virgin Business) and made an informed decision: informed by the BT salesperson, who made it absolutely clear that BT owns all the lines in London, and all the exchanges, so if I were to choose Opus or Virgin or XLN, I would in effect be renting the line from a company that was renting the line from BT. So if the line went down, I would be reliant on BT to fix it no matter whose logo was on my bills.
After the June 2010 incident I was sure to buy BT’s best service level agreement to make sure that, should our extremely precious telecoms infrastructure ever go down, a BT engineer would be at my service within minutes. I had the opportunity to test this SLA later that year when, suddenly and inexplicably, our internet failed one Monday morning. After hounding BT on the phone for three hours, I finally decided to cut my losses and sent the whole company to work from home (luckily we have a great business continuity system in place – my distrust of BT had forced me to plan in advance for this eventuality). It was five full days before we were up and running again. If we hadn’t prepared for this in advance, we would not have been able to work that week and the consequences would have been dire.
In my fury, I vowed that I would never use BT again, but, at the end of 2012 we outgrew our offices and were forced to seek alternative accommodation (yay for us!). We found new space nearby, and started our search for a telecoms provider. It was difficult and extremely confusing, but again it emerged that BT was the only viable option, as BT is still the only company that can take a phone line from a telecoms exchange and plug it into my new office. So, again, thanks to BT’s monopoly on London telecoms, my decision was made for me (I did consider IP telephony, but decided it was not quite reliable enough and I was extremely suspicious of the salesperson’s claim that they could bypass BT completely). So, informed by my BT account manager that it would take six weeks from order to installation of our phone and internet system, I placed an order (and paid for it) before Christmas 2012. The process was opaque and confusing at best, and BT failed to communicate the following critical information to me:
1. That the installation that would take six weeks was only the first in a three-part process to get our phones up and running. Once that installation (of ports and a switch) had taken place, there were two further engineer visits that would need to take place.
2. That Engineers 2 and 3 could only be booked once Engineer 1 had left the building.
3. That the time between booking Engineers 2 and 3 and them actually turning up at the offices was around 4 weeks,
4. That each of the three engineers who would be working on getting our phones set up would work in his own little silo and have absolutely no knowledge of what the other two were up to. Sitting in a fourth silo would be our account manager, Scott (a different account manager from the one we had originally spoken to).
So now, six weeks after the promised date, we are finally in our new office, connected to the internet, and with a number of phone lines, relieved, but concerned that BT is our company’s weakest link – they have us by the balls and there is nothing we can do about it. Despite telecoms being critical to the success (survival even) of our business, I have only one choice of provider and it is an extremely risky one.
This is a ridiculous situation in which there is so much uncertainty that planning for the future is all but useless. Without some sort of reliable visibility into the ‘up and running date’ of your telecoms infrastructure, it is very difficult for a small business to plan and commit to a move-in date, or an ‘open our doors date.’ And it’s not just technology PR agencies that are affected. There are very few businesses that can thrive in a big city like London without telephone and internet – these are needed to take card payments, run cash machines, receive electronic bookings and many other small but highly important processes that a business needs to survive.
So, Boris Johnson, David Cameron, I implore you. Stop fretting about Tech City. Take the focus off Barclays, and please turn your attention to the horrendous monopoly on telecoms that is holding your capital city hostage. Make it possible to introduce some competition into the market. Insist on a better deal for SMEs, make the whole process of getting telecoms infrastructure more transparent and make London the connected city you are so keen for it to be!
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