As a start-up business you have a lot to think about but not a lot of time. Although a phone line and broadband connection are essential, you may feel that ‘all the providers are basically the same’ – so are tempted to just go with the telecoms provider that’s the easiest or the cheapest.
If this is your thinking – you are not alone.
Unfortunately, however, there are many costly traps for the unwary. It’s therefore worth spending a little time considering which telecoms package is right for you and your business – now and throughout the duration of the contract.
At the very least, check the following 10 points. You’ll save yourself money, time (over the long run) and you’ll avoid being trapped in a contract that might damage your business.
1. Is the provider a member of the Ombudsman scheme?
Has your potential supplier signed up to the Ombudsman scheme? This gives free binding arbitration in the event of a dispute.
Check the Ombudsman’s website for list of scheme members. If the company you are considering is not a member, you have to; a) ask why not, and b) avoid them.
2. Watch out for illegal automatic renewals
Is your supplier trying to tie you into an automatic renewal of your contract? Auto renewal of phone contracts for small businesses was banned several years ago yet many suppliers still try to get away with it.
3. Check the figures behind the headlines
Don’t be lured by eye-grabbing lowest price promises – especially for line rentals.
Often these so-called savings are more than offset by higher call charges, minimum charges, call set up fees and/or call durations being rounded up to the nearest minute.
4. Notification of price rises
Your supplier is obligated to give you notice on any price rise. You then have the option to cancel within 30 days. However, many suppliers hide the notification in bills or on their website.
To avoid being caught out you need to check your bill regularly against the contract and insist on an additional contract clause that gives you the right to cancel the contract should you spot a price rise at any time.
5. Mobile-only perceptions
It’s tempting to think ‘I will just use my mobile number’. Again, this appears to be a cost saving measure. But, plenty of research has shown that most consumers and businesses don’t trust companies with only a mobile number as much as those that appear to have a landline number.
The word ‘appear’ is important. It is now easy and cost effective to have a landline as an app on your mobile. Your company appears bigger and you can separate your work and personal life.
6. Avoid long contracts
Don’t sign up to a long contract. These can be tempting as they often provide a way to avoid upfront payments. This is almost always a false economy.
Who knows where your fledgling start-up will be in five or seven years time? Hopefully it’s grown beyond your wildest dreams – in which case you’ll no doubt have moved premises and need a different telecoms package.
If, however, you have not been so fortunate and the business needs to close, a long contract may mean that you are still be liable for costs, right to the end of the contract, whether you are using the phone and broadband or not.
7. Does it seem too good to be true?
As a rule of thumb – question that anything that appears to be free or looks too good to be true. These are seldom as good as they look once you dig deeper and can have long-term cost consequences.
8. Be cautious with reviews
Don’t put your complete trust in review sites. Yes, they can act as a useful guide but, be aware, not all are as independent as they seem.
For example, Trust Pilot is owned by same company that owns Verastar (previously Unicom). They were fined £200,000 by Ofcom for miss-selling. And there are regular instances where people who have left negative feedback on Trustpilot find that it has later disappeared.
9. Residential or Business?
Every start-up wants to save money – so, many start-ups opt for residential telecoms services rather business ones.
This is most definitely a bad idea; whilst you may save a few pounds on monthly rentals, what you are losing is priority if there is a fault. How much revenue would you lose in a day if a potential customer cannot contact you?
10. The cost of lost business
It is a similar story with broadband; don’t just buy on price. There are great variations in contention ratios, network capacity, quality of ‘free’ routers and customer service between the different providers.
Again, ask yourself what impact a day of lost Internet or no phones would have on your business. If your business runs over the weekend, what happens if the Internet goes down at 4pm on a Friday? With a residential contract an engineer won’t come out until at least Monday, maybe later.
In summary, communicating with customers, partners and suppliers is key for all start-up businesses. So, don’t rush choosing a telecoms solution – set aside some time and resource to be sure you are getting what you need.
It may take a little longer in the short-term, but the long-term payoff will make it worthwhile.
About the author
This guide has been written exclusively for ByteStart by Dave Millett who has over 35 years’ experience in the Telecoms Industry. He now runs Equinox, a leading independent brokerage and consultancy firm. He works with many companies, charities and other organisations and has helped them achieve savings of up to 80% on telecoms costs.
Dave Millett is a regular contributor to ByteStart, and other guides he’s written to help small businesses, include;