New Accounts system

December 20, 2007

We just launched our new back-end billing system. Key improvements / differences with the old one are the following

  1. Buyers now have a different Escrow per project. What this means is that Buyers will deposit funds separately per project, so that if they have a number of projects on the go, the Provider for each one will be protected.
  2. We have also created an general Escrow account of “Unassigned” funds. This allows Buyers to assign funds to Escrow from a central pool
  3. We have added a “Request Withdrawal” button that allows the Buyer to pull out funds that have not / will not be used
  4. we have created new “Balance” screens detailing the exact flow of money and the balance per Escrow account

The multi-escrow system takes our back-end a step further in enabling buyers and Providers to safely pay and receive payment for a multiple projects each of which has iots own protection (as opposed to having all the sums coming out of the same pot)

We hope you find this useful ! Do let us know of comments / questions you may have

The recent sub-prime mortgage crisis and the interlinked subsequent turmoil in the financial markets has generated many concerns in businesses and the general outlook on the economy. The question we want to answer is: will it affect small businesses?

There is no easy answer to this question. But let’s examine the different drivers at play.

On one hand, we have a mortgage market that’s become a lot tighter. This will make it increasingly harder for people to get mortgages. Traditionally, borrowing against your home has been one of the most common ways of funding a new businesses (according to a survey conducted by the Federation of Small Business 25% of start ups use bank loans as their main source of funding, while 49% use bank overdrafts). So these facts would indicate that the credit crunch will have a knock-on effect on small businesses by affecting entrepreneurs’ ability to raise funding.

Equally, a lot of people who are already on the property ladder will find that their equity is being squeezed by the drop in house prices, so again making it harder to gear up.

On top of this, banks have gone into saving mode, switching from looking aggressively for borrowers to looking for lenders. So even with property to secure against, chances are that people will generally face it more difficulty to get a bank loan.

On the other end of the food chain, larger businesses, who are already geared up may find it harder to service their debt especially if consumer spending is affected (of which there are no clear signs as yet). Consumer spending accounts for about 70% of the GDP so if that goes down… it pretty much all goes down.

With the above in mind, the number of business startup is the next year is estimated, by some, to drop. Barclays bank estimates that new business formations will drop from 420,000 a year for the past three years to about 360,000 next year.

I don’t share that view. Seemingly paradoxically I believe that the above will actually lead to a growth of the small business sector. The small business sector has always been the most resilient in the economy, benefiting from the lack of a cumbersome fixed cost base that burdens large businesses and with little or no debt to service.

There is the question of course of ‘how do we finance a small business without a buoyant property market to piggy-back on’? Well considering that over the past three years, despite abundance of cheap credit, 40% of start-ups (according to the FSB survey 2006) used own savings and retained profits to part-finance their growth, one can argue that that figure will increase in times when credit is tighter and when people are also nervous about their employment prospects.

Added to this is that fact that entrepreneurs today have more tools at their disposal to help them ‘boot-strap’ their venture than any other time in modern business history. Technology of course is the underpinning force behind this, enabling people to work remotely even deploying virtual teams without having to incur the traditional set-up and costs. Sites like ours – www.peopleperhour.com, we’d like to think, are making a distinct positive contribution to that.

Personally, I think the problems of the current financial crisis can be attributed to one key fundamental factor that, unfortunately, is an innate human trait: greed. The past number of years has seen an excess liquidity fuelled by cheap credit, which has led to a frenzy of over-spending and over-exposure. What has this led to? Large organizations eating up more than the can chew. Like Northern Rock.

This downturn will be a smack on the face to those who have got too greedy. And those will be naturally the ones at the top end of the food chain. As people become more nervous of the situation and their job security in those organizations, I think more people will resort to embarking on their postponed hidden desires to branch out on their own.

After all there something uniquely beautiful and paradoxically uplifting about a bleak economic climate: there’s less to lose!

Data released by the Department for Business, Enterprise and Regulatory Reform (formerly known as the DTI) in 2006 has revealed some interesting statistics on Small Businesses.

From a total of 4.5 million enterprises in the beginning of 2006, a massive 99.3% were “small” (0-49 employees). Small businesses employed almost 7m people (28% of total workforce in employment) and accounted for 35% of total enterprise turnover.

These figures are staggering and reveal the importance of the Small Business sector to the UK economy. Equally staggering is the date on new start-ups per annum: upward of 400,000!

As a company catering for Small Businesses and start-ups, Peopleperhour.com has decided to strengthen that message by creating a “Special Feature” on Small Businesses using case studies from our site.

The feature will demonstrate what services these small business are requiring and how our site is helping them get them – affordably, quickly and easily.

If you are a Small Businesses registered with us and would like to be included in this feature and gain from the exposure and publicity it will gain, please send us your details on info@peopleperhour.com