Forecourt Trader
Money Talk: Family-run businesses have advantages... and disadvantages

It often seems that we live in an age of multinational mega-corporations which control so many familiar trading names, to the extent that it's easy to forget that in reality a large proportion of small/medium businesses are still basically family-owned and run enterprises and this is particularly the case when it comes to petrol retailing. Of course there are the oil companies, and they certainly fall into the 'multinational mega-corporation' bracket; then we have what are still euphemistically described as the 'Indies' in reality now dominated by a dozen or fewer very large companies who between them own a great many forecourts, both in this country and increasingly abroad. But at the grass roots level of petrol retailing, there are still many hundreds of sites operated by families.

Money Talk: Why planning ahead makes good business sense

It's very easy to sympathise with the view that planning ahead is basically pointless. Technological and social change seem to happen at an ever-increasing pace and to threaten the basic way in which our industries work, and indeed in how our lives are organised. As if that didn't make it difficult enough, there are all the stresses of the present: rising costs, increasing competition and customers expecting more for less every day. And, of course, the future rarely turns out as predicted anyway. Those of a certain age will have grown up with the notion that by the year 2000, we would have human colonies on the Moon and that we'd be piloting egg-shaped flying cars. But nobody predicted the internet, the iPhone, or that we'd still be crawling along crumbling roads in egg-shaped SUVs burning diesel or carrying half-a ton of batteries.

Money Talk: Were you aware that Minimum Wage Rates have risen again?

Being very busy people, you may have missed the fact that on April 1, the National Minimum Wage/Living Wage rates were raised again. For the record, the rates that you should now be paying are:

Money Talk: VAT returns are changing very soon: is your business prepared?

You may have heard the phrase Making Tax Digital (MTD) a few times in the last couple of years. Admittedly not the catchiest of terms, so far it hasn't had much impact outside the accounting journals in fact it's hardly caused much in the way of comment even in the business sections of the mainstream media. But all that is about to change in particular as far as the vast majority of VAT-registered businesses are concerned. Because from April 1, those businesses will face a change to how they produce and file VAT returns.

Money Talk: Don't worry, it's only the auditors and they offer genuine benefits

A year on from the meltdown at Carillion, quite apart from the immense fallout in practical terms, one consequence is that serious questions have been raised about the role of that company's auditors. The same questions have arisen after almost every subsequent corporate failure the latest being at Patisserie Valerie, where the company's owners discovered a large hole in their balance sheet just months after the annual accounts were signed off by their auditors. The powers that be have taken notice: the Financial Reporting Council (FRC), which is responsible for regulating auditors, is currently investigating several of the large audit firms involved in recent corporate failures; the Competitions and Markets Authority (CMA) is looking at the dominance of the 'Big 4' accountancy firms in the UK; and there have been suggestions that the FRC itself may face a shake up.

Money Talk: Honesty is always the best policy, especially when it comes to HMRC

There's a saying that there are two people with whom you should always be completely open and honest: your doctor and your lawyer. Of course, we'd add accountant to that select number particularly at this time of year. That's because while much of the business world seems to go into semi-hibernation for a few weeks in January, this is always a very busy month for accountants; dominated primarily by the need to ensure that clients' personal Self-Assessment Tax Returns (SATRs) all get filed by the 31st at the very latest. Naturally most accountants would prefer not to have all the SATR work in the last few weeks before deadline day, but there are always a few clients who just don't provide the information until the last minute or after.

Money Talk: We've had a rare outbreak of common sense...

At a time when the main news channels seem permanently occupied with the political quagmire around Brexit, it's tempting to believe that everything else in business and politics is in a state of paralysis and terminal decline. That may of course still be the case, but at least two recent pieces of news (granted, not exactly 'front-page' news) indicate that somewhere there are still people applying a little bit of common sense to the running of 'UK plc'.

Money Talk: Data, information - or what we call the 'Bigger Picture'

Petrol retailing is fundamentally a high-turnover, low-margin business. It isn't unique in that respect, of course, but it is somewhat unusual in that the major component of that turnover (fuel in case anyone has forgotten) is subject to almost daily price volatility and in the short term that includes the possibility of the price dropping. As with every other business, success depends on a combination of factors: demand, correct pricing, cost control and cash flow management being the key ones.

Money Talk: How an unrelated business on your premises could still affect yours

Money Talk: Decision time - should you stay with your oil co or should you switch?

Every five years or so, every independent dealer faces what is perhaps their biggest business decision: whether to renew a supply deal with their existing oil company or take a big gamble and change suppliers. But today there's often now a third option that comes up: put the site up for sale and just take the proceeds and enjoy retirement. For most, particularly genuine independents with just one or two sites, this really can be a difficult decision. They look at their business and have to decide how it's going to run for the next five years. And in our experience many of them make one fundamental mistake: they leave the decision-making process too late. Frequently this huge decision is actually made at the last moment, more often based on intuition or emotion than cold hard facts. Perhaps this is just down to their personal history of owning sites. There was a time when they might have had half-a-dozen potential suppliers vying with each other and the incumbent supplier to (almost literally) throw money at them to sign a supply deal.

Money Talk: Why it's hard accounting for the unexpected

Spare a moment for some sympathy for the BP dealers who've had two rather unfortunate experiences related to plastic money in recent months. First, at the end of May, many of them discovered that they owed the oil company significant amounts of money for Allstar card-handling charges over the previous three years. Then, in early July, they suffered a failure of EFT systems which caused complete chaos on around 1,000 forecourts. These things happen and not only to BP dealers, of course. While the immediate impact of either happening is pretty obvious they also have a later impact when it comes to trying to account for them in the site's records.

Money Talk: Holiday times can be stressful... so planning is vital

Money Talk: The knock-on effects of the continuing rise in pump prices

Money Talk: High Street in crisis? What does it means for forecourts?

Money Talk: Time to talk pensions as not even you can work forever

If you've been running your own business and employing staff for more than a couple of years, you'll no doubt remember all of the publicity about Pensions Auto Enrolment. How between 2012 and 2017 every employer, down to the smallest, was repeatedly reminded to ensure that they had a recognised pension scheme in place for every member of their staff between the ages of 22 and their state pension age. Of course, now that we're well into 2018, as an employer you've met all of the deadlines and complied with all of the regulations, so why are we mentioning it again?

Money Talk: Doing it yourself isn't always the better option for business

Recent events have given the concept of 'outsourcing' rather a bad press, albeit that many of the arguments are about politics rather than business. From the media coverage of the Carillion failure you might get the impression that everyone should go back to some (perhaps mythical) golden age where organisations performed every function 'in-house' and everything in the garden was rosy. Those who've been around for a few years might remember that when businesses did largely try and do everything in-house there was often a lot of inefficiency and unnecessary additional cost.

Money Talk: Following the demise of P&H, is it back to the cash and carry?

For anyone involved in forecourt retailing over the years, the news of Palmer & Harvey's collapse late last November is likely to have been more than a shock more like the end of an era. Unless you're old enough to have worked in this industry for longer than say 20 years, you probably can't remember a time when P&H wasn't the default supplier of just about everything in the forecourt shop, bar newspapers.

Money talk: Blink and you missed it: the 2017 (Autumn) Budget

In the last days before the Budget there had been speculation regarding a specific hit on diesel users with some people suggesting a possible increase in fuel duty on diesel of as much as 2-3ppl which was quite alarming to both the haulage industry and millions of ordinary punters, since pump prices had already gone over the 120ppl mark at many sites across the country.

Money Talk: Deposit Return Schemes - green values or just more red tape?

Depending on your politics possibly the most interesting topic to have emerged from this autumn's round of party-political conferences was the discussion regarding proposals for the introduction of some type of Deposit Return Scheme (DRS) on sales of various bottled or packaged products. It was interesting not least because the subject was raised by Environment Minister Michael Gove who is generally considered to be somewhere on the 'free market', right wing of a party which makes much of its anti-red tape/pro-business stance. Although the recent publicity has concentrated on Mr Gove's intervention, many commentators seem unaware that the Scottish government had already commissioned a detailed study of such a scheme earlier this summer and they have the power to introduce legislation without needing to wait for Westminster to produce a version for England and Wales.

Money Talk: Renting out all or part of your site? Stop and consider this...

Visit many forecourts today and you're likely to come across a familiar sight: parts of the premises sub-let to smaller 'independent' businesses renting some space from the owner to carry out their own activities. The most common, of course, is the hand car wash. In other cases it may be a used-car sales operation or workshop activity. And, in some cases, the actual shop itself is completely separate from the fuel part of the operation.

Money Talk: Make sure you're really paying the National Minimum Wage

The embarrassment must be a PR person's nightmare. Imagine: you represent a very large national retailer; one that continually advertises on TV, radio and in magazines and newspapers. Then comes the press release from HM Government across all the news media your client has just been included in the latest 'name and shame' list as the largest of 233 employers across the country who've failed to comply with National Minimum Wage (NMW) regulations. Not only does the company have to repay some £1.5m among 12,000 staff to cover underpayments going back four years, but it also admits that the underpayments are more widespread. Oh, and don't forget the £800,000 fine imposed by HMRC for the original offence. Even if you don't usually have much time for PR-types, you might feel a little sympathy imagining them trying to put some positive spin on this sort of story.

Money Talk: When it comes to sub-letting, it's usually 'see no evil, hear no evil'

In common with many other sectors of the economy, the petrol retailing industry has seen a quiet, persistent, trend over the past couple of decades: call it 'out-sourcing', or 'contractingout', or just 'sub-letting'. The owner of a business or premises feels that some activity isn't producing the financial returns that they feel it should. The question then is what do you do with the problem area or activity? If it's a whole business say an entire forecourt one obvious answer would be to sell it. But often it's not quite so simple.

Money Talk: If forecourt crime is such a problem, why isn't more done to prevent it?

BOSS's Forecourt Crime Index has just appeared in the news pages again, this time because it shows forecourt crime at its highest-ever level during Quarter 1 of this year.

Money Talk: We're back to 'business as usual' - inflation and falling demand...

With hindsight it now seems strange that just a few years ago it looked as if we were entering a period that few retailers had previously experienced deflation whereby retail prices were falling month-on-month. And if you've been watching the news recently and caught the most recent release of inflation data from the ONS, any mention of 'deflation' must seem even stranger. It was therefore interesting to receive a copy of an independent report*, which concentrated specifically on shop price trends to April 2017. Interesting not least for the reason that it was headlined "Four years of falling prices but change in sight". It confirms that as far as purely retail shop prices are concerned, we have indeed been living in a deflationary environment for the past few years but that this period of deflation is now showing signs of ending and is very likely to change to inflation again in the coming months. Their overall result for 'all shop prices' showed a decrease of 0.5% in the 12 months to April 2017 compared to the corresponding period to April 2016 with the commentary that this was the lowest rate of decrease since November 2013. That overall decrease was then split down between food (where price inflation was +0.9%) and non food (where price deflation was -1.4%), which corresponds with anecdotal evidence from shoppers and retailers.

Money Talk: Forecourt crime is more than just drive-offs and no means of payment

Interesting to see that BOSS (the British Oil Security Syndicate) has launched a 'forecourt crime index' to help retailers gauge their own experience against a national benchmark. It's a good idea, and one not to be dismissed, however, the real limitation is that the index appears to relate specifically to drive-offs and NMoP (no means of payment) incidents as if they were the only elements of forecourt crime. Some with long experience in the industry might beg to differ. That's not to suggest that these two problems are insignificant. Assuming that the estimated £30m-a-year cost of these incidents is accurate, that works out at an average of around £3,500 per site nationally.

Money Talk: Selling up and getting-out - there are several ways of valuing a business

Last month we looked at valuing a business for potential sale using its most recent balance sheet and noted several good reasons why any prospective buyer might not take even an accurate and up-to-date balance sheet at face value. In particular, that the figures are at historic cost, and that there may be potential liabilities that are difficult to quantify and show.

Money Talk: Selling up your site and getting out...

In the course of any business there comes a time when the owners think about selling up. If the business is successful they might want to get out at a reasonably early age and enjoy a long retirement somewhere sunny. If the business is very successful, someone may come along out of the blue with an offer to buy them out before they've even thought about retirement. Usually it comes down to age and/or personal circumstances. Nobody really wants to work until they drop especially in a hard business like petrol retailing. Eventually the question that most operators ask themselves is "How much is my business worth?" Usually the next person they ask is their accountant.

Money Talk: Petrol versus pub

How's trading been so far this year for you? While it's too early for any figures, conversations with retailers in both the petrol and hospitality sectors (regular readers will know that at EKW we've had a foot in both camps for many years), suggest that the recent post-Christmas 'quiet period' has been quieter than any they can remember.

Money Talk: Looking for a light in the January darkness

Welcome to January, the bleakest of months what with the darkness and the bills arriving after that little self indulgence at Christmas. And that was just in the good times. Following the events of 2016 (think Brexit, Trump, US interest rate rise, etc), the economic outlook is the most uncertain since the financial crash of 2007/08 and the forecourt retail industry won't be immune to whatever happens to the wider economy.

Money Talk: Autumn in the wilderness

If there wasn't really much drama around the Autumn Statement that the Chancellor delivered on the 23rd of November, there was at least a little of the flavour of pantomime: this was to be the last 'Autumn Statement' because in future the 'real Budget' will move to autumn; so what we used to know as 'The Budget' will be in the autumn, and in its' place we'll have a 'Spring Statement' although the name won't actually change until after the 'Budget' due next March (2017). Confused? Maybe they should just call it 'Springwatch' and 'Autumnwatch'.

Money Talk: Interesting times...

The new Chancellor Philip Hammond, in case you hadn't noticed is due to deliver his first mini-Budget, more formally known as the Autumn Statement, in just a few weeks time on November 23. As these things go, there seem to have been remarkably few hints or leaks as to what might be in it. In fact so few, that some cynics are wondering whether he's going to simply make it up as he goes along on the day, much like other government policy since July.

Money Talk: Make sure you take time to take stock

Sometimes it comes as a bit of a shock to end up discussing something as basic as stocktaking with a retailer. We all tend to assume that the principles of stock management including knowing how much stock is really there are so fundamental to any sort of retail activity as to be beyond the need for explicit discussion. Yet it happens typically when we've just produced a set of accounts using the first real stock figures after months (sometimes many months) of book or system stock values.

Money Talk: How hard are you sweating your assets?

In every business there comes a time when major expenditure is required just to be able to keep that business going. In the world of petrol retailing that could be new tanks and underground plumbing (maybe every 20-25 years); new pumps or rollover washes (maybe every 15 years); new canopy, fascias and lighting (maybe every 10 years or sooner if the site changes supply or branding); or new POS and EFT equipment (again, perhaps every 10 years).

Money Talk: Brexit means business as usual... for now

It seems like a very long time since June 23. Yet as this is being written, the new Prime Minister is still making the last appointments of her new government team and everyone else is still grappling with the possible consequences of the referendum result. So it was quite interesting to have had a chance conversation with a petrol retailer client on the same subject just a few days ago.

Money Talk: Your car wash - dead space or profit centre?

Hundreds of forecourts have the same problem: a large and heavy piece of equipment taking up quite a lot of space in its own dedicated area which, although costly to install and maintain, has produced very decent profits for many years. But that was before a no-tech alternative sprang up causing the market for their particular service offering to collapse almost overnight. Today that once-expensive piece of equipment sits under-used (if used at all) and physically decaying.

Money Talk: Keep it simple and make sure you keep it separate

Some business operators do like to make life complicated. Not just for their accountants, but potentially for themselves. One way in particular is very common among small, owner-operated traders using the business as just another personal cash and bank account.

Money Talk: Paper still supports your accounting system

Whenever we meet someone about to go into business for themselves, eventually the conversation gets down to practical matters: things like business bank accounts, choice of book-keeping system, EFT terminals, etc. A few even ask how long they'll have to keep their 'records'... ]

Money Talk: Budget 2016 - not so sweet for all of you

Rather surprisingly, the Chancellor decided to leave Fuel Duty unchanged in his March 2016 Budget perhaps influenced by the recent upward creep in pump prices- largely due to the pound/dollar exchange rate or maybe he just decided to keep his powder dry and save that option for the future. Of course, that wasn't the only surprise in the Budget: most media coverage has focused on the proposed 'Sugar Tax' on soft drinks, which wasn't expected especially, perhaps, from this government.

Money Talk: The big question - will fuel duty rise in the Budget?

Many retailers will doubtless remember that increases in duty were once routine - in fact automatic at virtually every Budget. Between 1993 and 2000, the increases were explicitly intended to be significantly above general inflation, regardless of which government was in office.

Money Talk: Don't let tax years and accounting dates fox you

Having just passed the annual self-assessment tax return deadline, hopefully your own return was in by January 31. Of course, that particular submission related to your personal tax calculations for the tax year 2014/15. Currently we're in tax year 2015/16, which runs until April 5, 2016.

Money Talk: Business health is still all about the cash flow

It started as so many of these contacts do a call from someone who had originally spoken to us about his prospective business nearly a year earlier, but then had gone quiet. This call was slightly awkward for him he'd taken up a friend's offer to 'look after' his accounting and was now a little desperate.

Money Talk: Some things change, others never seem to

Whatever the eventual fall out from the VW emissions scandal, there is a feeling in the air that we might come to look on 2015 as representing the high water mark of diesel road fuel here, across Europe, and almost certainly in the US.

Money Talk: Forecourt hourly pay rates rise to £6.67

As regular readers will be aware, each autumn we look at the hourly pay rates of thousands of staff working at hundreds of forecourts around the country, to obtain a picture of real pay rates in the petrol retail industry.

Money Talk: Diesel blues for some and bad apples for others

It happened in August. Motorists suddenly found pump prices of diesel were falling more steeply than those of unleaded. By the end of the month the unthinkable had happened on many forecourts diesel was actually cheaper than petrol. For some of the millions of today's diesel drivers this felt like the first time ever.

Money Talk: Heads in the cloud over the cost of accounting

There's a scenario that often plays out when we first meet a prospective new retail operator: after the usual exchange of pleasantries we listen to their plans for their new business; funding it, staffing and operating it. Eventually the conversation touches on their 'accounting' expectations. Nine times out of 10 their most immediate concern is VAT returns. Most are also sensible enough to realise that they'll need some form of management accounts; they know that trying to manage any business relying solely on annual financial accounts is a nonsensical proposition.

Money Talk: Mr Osborne's very unwelcome surprises

George Osborne presented his first proper Tory Budget on July 8 and, while it left many things unchanged from the earlier March version, there were some announcements that did take commentators particularly various employers' and business organisations by surprise. Probably the biggest of these surprises, and one that naturally hasn't gone down very well with employers, was the announcement of the National Living Wage (NLW). The pre-July Budget scenario was that there were increases to the National Minimum Wage (NMW) due to come into effect from October 1, with the resulting rates becoming:

Money Talk: Auto Enrolment - creeping ever closer

We've mentioned it before, but make no excuse for highlighting it again: Auto Enrolment is coming your way and you need to be ready for it. We're talking about the legal responsibility of all employers to provide an appropriate, approved workplace pension scheme for their staff. It doesn't matter whether you run a site as a dealer, or as a commission-operator; whether you trade as a limited company or as a sole-trader/partnership: if you employ staff and are registered as an employer with HMRC then Auto Enrolment will affect you. The only question is 'when' and the short answer is 'anytime between now and October 2018'.

Money Talk: How to help with your business rates revaluation

The latest round of property valuations for business rates purposes is now in full swing. Since early February, the Valuations Office Agency (VOA) has been issuing questionnaires to thousands of businesses across England and Wales, and a similar exercise is happening in Scotland. The information will be used to update the rateable values of business premises as at a nominal date of April 1, 2015, with this forming the basis of the business rates to be charged from April 2017.

Money Talk: Don't ignore individual site-operator finances

Hardly a day goes by without the sell-off of yet another tranche of forecourts by a major oil company to one of the numerous independently-owned groups in the UK retail market. Almost inevitably there are the associated recruitment ads by some of these same groups, looking for people to join them as site managers or more often commission operators, to run the sites that they're acquiring. This pattern has been going on for a while now, and seems destined to continue until the last of the traditional oil companies sells off its last retail property in the UK.

Money Talk: Budget 2015 (the March one)

It was always likely to be a strange Budget coming as it did just seven weeks before the General Election which looks highly likely to end without any clear winning majority. The Chancellor had to stand up and deliver a Budget that somehow appealed to his existing voters but didn't scare off those who might be thinking of joining them on May 7; and do so in the knowledge that he might not be in a position to put his announced measures into practice after that date.