BJM Free Press |

Utility Auditing Business

Auditing is not a matter of magic. If you have the patience to sort through regulatory tariff and have a keen eye to spot billing inconsistencies, you can conduct an audit.

Minimum Start-Up: $500
Average Start-Up: 15,000
Revenue: $35,000 - $1 Mil+
Profits: $20,000 - $500,000
One Person Business: Yes

UTILITY BILLS

Auditing utility bills has become one of the most popular areas of concentration for auditors because of the inherent complexity of billing for utilities.

Utility rates are highly confusing because they differ depending on type of service, volume of usage, and promotional packages offered at the time of installation.

GETTING PAID

Utility Auditors earn commissions, usually around 50% of any overcharge they uncover. And this is where you may need to exercise more of your patience.

Although utility companies would gladly settle a verifiable overcharge (relatively quickly out of court), it may ask them up to six months to issue any refund. This is particularly true with larger utility firms.

COMMISSION WORKS

Most clients prefer to pay auditors on commission basis for two reasons: No upfront cash outlay, and no risk if the auditor comes back empty-handed.

For the auditor, working on commission offers distinct advantages: It makes it easier for them to land clients, and it usually enables them to earn more than if they would take a basic fee.

MAKING THE SALE

The biggest challenge facing auditors is to get a potential client to admit that “there is a high probability that they (the client) overpaid for their utilities without knowing it”.

This issue is usually not a problem if the client is a small business where the owner makes all the decisions.

However, the executive committee of a major corporation may feel threatened that they’ll be held accountable for irresponsibly overpaying for utility.

Your job is to convince your potential client that overcharging does happen and that it is the job of an outsider auditor, and not people from within the company, to “fix” the problem.

5 WAYS TO GENERATE QUICK CASH YOU NEED BY RUNNING A MINI-BUSINESS, PART 5 of 5

Continuing from part four, mini-businesses:

INCREASING YOUR INCOME FROM YOUR PRESENT BUSINESS

The easiest way to bring in more income quickly is to offer a special price or package of your current products or services. Your only upfront expense will be getting the word out about your special. Depending on the type of business you run, this expense could be minimal.

For example, one of the services I offer, in addition to my publishing efforts, is custom typesetting and layout work. I could offer a special price for a limited time, or a quantity discount off my normal per-page pricing. In this case, the most cost effective marketing method I could use would be to prepare a flyer for the special (no cost to myself but time spent creating the flyer and copying costs), and distribute it to my best customers and those prospects I would most like to have as long-term clients.

Besides the quick business I’d get from the special, I may entice a few newcomers into my fold that will bring long-term business my way. Used correctly, this technique can provide the quick income you need, while building your permanent customer base.

CONCLUSION

Every business has hard times at the start. That’s just a fact of life or the self-employed. It doesn’t have to be so bad, though, if you plan ahead and take whatever steps are necessary. Package your products and services for quantity sale. Run a small secondary business. These are the ways to reinforce your main business and keep it afloat in rough water.

This is part four of a five part series. Click to read part one, two, three, or four.

WHAT IT COSTS TO START A MAIL ORDER BUSINESS

You can read stories all day long about how easy it is to start your mail order business for as little as $10. But I’m sorry my dear friend. It costs much more than that.

Of course you can pay for expenses as you go along if you have another type of income you can use to pay your personal living expenses with some left over to invest in your mail order business. You don’t have to have all the money up-front — but regardless of what anyone tells you — it costs money to own and operate a mail order business.

How much money? Well, it all depends on what type of business you go into and how quickly you begin to generate orders that reimburse you for the money you pay out of your pocket in the beginning. However, it’s safe to say you need at least $500 to get going in the right direction.

Why do much? Because the first thing you need are office supplies. At bare minimum you need envelopes (the #10 business size), paper, a typewriter or computer, 3×5 cards to keep track of names and addresses of people, tape, scissors, ink pens and a pack of mailing labels (handwriting an address on an envelope is very unprofessional and shows you are an inexperienced beginner.)

Next, you will need to have enough money to pay a typesetter to design you some ads. Don’t buy a kit and make them up yourself. At this stage of the game, you are very inexperienced and don’t know how to write or present ads that will bring you a response. Invest $5 or $6 in a few one-inch ads that a mail order typesetter will design professionally for you. They will pay for their weight in gold!

You’ll also need some money to pay a mail order printer to get some copies made so you can mail them to prospective buyers. Don’t try to make copies at the quick-shop down the street. Most of them want 15c or more per copy and mail order printer prices range around $30 per 1,000 or 3c each. This is a big savings.

You’ll also need money for research and an investment in your education. This means purchasing “Big Mails” from other people to read and consider. You’ll also want to buy a couple good books on mail order marketing and even buy a few tabloids, adsheets, etc. This is the only way you can find other people’s names and addresses so you can contact them. It is also the only way you will be introduced to publishers and where to advertise so you can start getting some orders.

You’ll also need money for postage to mail out your letters and correspondence. This is a mail order dealer’s biggest expense.

From the day you place your first advertisement (display or classified), it will take anywhere from 1 month to 6 months to get your first order. Why so long? Because, no one knows you. Unless you are selling the Brooklyn Bridge for $24.95, you won’t generate a lot of excitement at first and most people who see your name will probably mail you their offers. (They know you are new because they haven’t noticed your name before.)

But a quicker way to generate some name recognition is to find several established mail order dealers who advertise or publish in mail order publications and correspond with them. When you find someone who is interested in you and takes you under their wing — you’ll begin to go places.

If you are selling reports, don’t be afraid to contact someone else who is selling reports. The mail order business is very different from operating a local business. If a pizza shop opens up across the street from your pizza shop — there will be a definite competition. But if another pizza shop opens up 60 miles away from you, it doesn’t matter. In mail order — the WORLD is your marketplace. Two people who sell the same product can work together and still have enough business to keep both of them happy. The world is a big place!

When you contact other people who share in your own interests and what you are selling, you can form lasting friendships and learn from the more experienced people. Invest some of your money into phone calls and contact these people directly. Ask them questions you don’t understand. Listen to their answers with an open mind. Although a mail order dealer has been in the business for 30 years though, if he or she isn’t making any money their advice may or may not be right for you. You can’t ask them how much money they make — but after talking to them awhile, you can determine if they know what they’re doing. Good luck!

COMPUTER INFORMATION SERIES NO. 4

Select your software carefully. One easy way to do that is to purchase SHAREWARE and FREEWARE before investing the big bucks. WordPerfect software for instance retails for around $300, but you can purchase PC Write, a shareware word processing software for $3 from S Software (800) 243-1515. Use PC Write and see if you really need a word processing program. It might be all you’ll ever need and you saved $297. Remember that everyone has different and specific needs!

There are some DISADVANTAGES when purchasing shareware and freeware though. Some of them are really good while some of them are really lousy. That’s why it’s important to rely on a good shareware distributor (a company that only deals with selling shareware) that is very selective in the programs they include in their catalog. One such company is The American Shareware Network, 250 Arlington St, Marshfield MA 02050, phone (617) 834-9208.

The American Shareware Network carefully installs and operates the software program before it is listed in their catalog for sell. They only choose top-of-the-line programs that are popular and worth the money. They also are honest in making sure the diskettes they send the programs on are full. Some rip-off shareware distributors will take a program that will fit on 1 or 2 disks and split them up into 4 or 5 different one. Then they’ll charge you 99c per disk and make you think you are getting a bargain. But in actuality — you would have been better off purchasing from the shareware distributor that advertises at a price of $3.49 per disk.

Also, don’t make the mistake of going crazy ordering lots of shareware. You don’t want to have 100 different software programs on your computer that do 100 different things. This would make life too confusing and you’d have to learn them all. You’d never know any of them well enough — just a little bit about each one. The whole idea here is to try out several different shareware programs in the particular software category you need before you invest money into the commercial software programs.

You should streamline your needs and the functions you want your computer to perform. Most of us will be buying a computer for our home-based business. Therefore, you need to find a good software program that will do the job you need for your particular situation. If you’re going to be a typesetter, try out a variety of desktop publishing software until you find the one that does everything you want it to do and more. One fantastic look-alike of the popular PageMaker software (retails: $549) is a program called PagePlus. In 1993, the price is only $60 — a 90% savings over its counterpart. (Purchase from Serif, Inc, PO Box 803, Nashua NH 03061 (800) 869-8909.)

In addition, if you will be selling mailing lists, concentrate on a good database software. If you will be writing and selling reports, concentrate on finding a good word processing software. If you plan to draw and create art, find a good CAD or drawing software program.

After locating the right software for your particular business, go through the same procedure in finding a good business accounting software you feel comfortable with so you can keep accurate records of your daily business transactions.

Do your best to narrow the different software programs on your computer down to as few as possible. This way, you can really learn each one of them and become an expert much quicker than trying to learn a whole bunch at once — thus, creating confusion rather than knowledge.

Have fun! This step will keep you busy for a few months. Below are some other software companies you may want to contact for a current catalog:

• Hot Software (201) 585-0662
• WinXpress (800) 859-8500
• Surplus Software (800) 753-7877
• CompuClassics (800) 377-2001
• Crazy Bob’s (800) 425-2627
• MultiMedia Perfection (800) 936-5000

And if you want to get in touch with other computer owners and experience the new wave of electronic publishing, I advise you to consider getting in touch with Jim Wellstood, PO Box 365, Medford NY 11763. Jim runs a service whereby you can immediately be advertising to 1,000’s of computer owners within a few days. It’s called “Jamie’s Classifier.”

You can also learn a lot from Pat Flanagan, 540 Imus Drive, Mishawaka IN 46545 who publishes information data to help you in any small business on computer diskette. Write for more info!

Previous posts in this series:

• Part 1
• Part 2
• Part 3

ESTABLISHING YOUR OWN VISA/MC MERCHANT ACCOUNT

ATTENTION — LEARN FROM THIS SCAM TO PROTECT YOUR SELF IN THE FUTURE!

There was an advertisement and press release that started circulating in late November 1993 from Daron Fordham, Mail Order Merchants Exchange, phone (904) 322-2607. Daron claims that you can just pick up the phone, call the phone number and his company will set you up (the same day) with a merchant account. The cost is less than $50 per month.

Daron states: “The majority of mail order dealers are losing thousands of dollars in profits because their local banks are refusing to grant them merchant accounts. Mail Order Merchants Exchange, a mail order dealer discount products and services organization, will grant VISA/MC merchant accounts to new mail order companies for a small monthly fee.”

The very first question in your mind should be “who” gave Mail Order Merchants Exchange the “legal right” to grant these merchant accounts IF banks have refused to? Does Mail Order Merchants Exchange have higher authority than a real bank? I don’t think so. Has anyone within the inner-circle heard of this guy before? I’ve been in business 7 years and I’ve never heard of him!

But before you take my word for it, take a second of your time to personally call your own bank. Ask them what you have to do in order to establish a merchant account so you can accept VISA and Mastercard orders. Explain to the bank employee that you will only be receiving orders through the mail and not as a walk-in business.

Then, after you get the specifics, ask them if you can just run a charge through another business’s merchant account? Run down the street to Kroger’s and see if they’ll charge a purchase from your customer for your product and issue you a check to buy your groceries. Sorry folks — it doesn’t work like that!

It is our job to put a STOP to this type of activity. This new type of scam could escalate into something big if we don’t. Can you just begin to imagine the problems something like this can cause?

Let’s suppose you call Daron’s phoney business (which he claims was established in 1993) and set up a merchant account. You receive an order from a customer for $100 to be charged to their VISA card for a product you sell. You give your customer’s credit card number and expiration date to Daron and he could charge whatever amount he wanted to without you or your customer knowing until it was too late.

It’s impossible to determine the extent of Daron’s full intention since Mastercard CLOSED him down. His plan might have been to “get in” and “get out” quickly, obtain credit card numbers and authorizations to charge purchases for himself — then slip out of existence for awhile. Or, perhaps, he planed to make his money from the $50 monthly fees he collected from hard-working people like you.

You know as well as I do. If you establish a merchant account today it will take a little while to let your customer’s know about it and receive your first credit card order. Daron knew this too. And during this period of time you are still paying $50 per month and waiting on customers to charge a purchase with you, But Daron is making money and planning his escape. Don’t fall for this one and take the time to warn others before they fall prey! (Note to Daron: We’re not as stupid as you think we are.)

Here are a few REAL banks that are willing to doing business with people in mail order:

• Rancho Vista National Bank, 820 Escondido Ave, Vista CA 92083, (800) 433-2460
• Bank of Oakland, 360 14th St, Oakland CA 94612, (415) 763-6834
• Charter Pacific, 30141 Agora Rd, Agora Hills CA 91301, (818) 991-8512
• Rocky Mt Bankcard Systems, Inc., 950 17th St, Ste 735, Denver CO 80202, (303) 629-7755
• American Pacific State Bank, 16912 Devonshire, Granada Hills CA 91344
• Bank of California, 400 California St, San Francisco CA 94145, (417) 765-0400 (Merchant Relations Dept.)
• United Bank of Denver, 1700 Broadway, Denver CO 80274
• Central Bank Service Corp, 309 Captain’s Walk, New London CT 06320, (203) 447-3500
• Bank of Delaware, 300 Delaware Ave, Wilmington DE 19899, (800) 722-1172
• Bank South, Atlanta, PO Box 4387, Atlanta GA 30302
• Bank of Hawaii, PO Box 2900, Honolulu HI 96846, (808) 537-8111
• First State Bank & Trust Company of Park Ridge, 607-611 W Devon Ave, Box 718, Park Ridge IL 60068, (312) 692-4114
• The Central Trust Company, 201 East Fifth St, Cincinnati OH 45202, (513)651-8253 (minimum 1 year in business)
• Ameritrust, 4169 Pearl River, Cleveland OH 44109
• Michigan Bankcard Services, PO Box 30096, Lansing MI 48917, (800) 848-3213
• American National Bank & Trust Co, 8990 W Dodge Rd, Omaha NE 68114, (800) 833-2586 (midwestern states only please)
• The National State Bank, 401 Park Ave S, Linden NJ 07036, (201) 474-1043 (business must be located in New Jersey or New York)

Processors and Independent Sales Organizations

Some believe the following firms are easier to deal with than banks. However, the fee they charge merchants to process charge cards is usually higher than the fees charged by banks.

Automated Communications & Engineering, Inc, 2367 Agate Ct, Simi Valley CA 93065 (800) 678-5667 (provides 800 and 900 number system that takes orders and provides information to cardholders. Discount rates, based on volume available. Their system can reverse chargebacks.)

• Telecredit, 6301 W Idlewild Ave, Tampa FL 33614 (813) 886-5000
• T.J. Little & Co., 54 Stiles Rd, Salem NH 03079 (603) 893-9333
• Banc One Wisconsin Bankcard Corp., 1000 N Market St, Milwaukee WI 53202 (800) 824-8870
• Bankcard System Inc., 3880 Michelson Dr, Ste 200, Irvine CA 92715 (714) 733-0707
• Electronic Credit Card Systems, 236 W Portal Ave, San Francisco CA 94127 (415) 877-1557
• R.A. Mulhern Co., Inc., 1820 East Garry, Santa Ana CA 92705 (714) 252-1445
• Bankcard Inc., 1233 Sherman Dr, Longmont CO 80501 (800) 666-7575
• National Bankcard Systems, 1800 Silas Deane Hwy, Ste 54, Rocky Hill CT 06067 (203) 563-8292

Why?

Many of you may be asking “why” mail order businesses are so discriminated against when trying to obtain a merchant account. The reason is NOT because the bank, Visa or Mastercard dislike you. The reason has nothing to do with your credibility as a human being.

The problem lies primarily in the fact that a mail order business can open and close up shop tomorrow. And if a small mail order business owner dies before a customer gets his/her bill — the customer could refuse to pay it (called a “chargeback.”) This leaves the credit card company being left in the middle to pay the bill and absorb the loss. This situation may sound like “one chance in a million” to you — but things like this happens everyday and credit card companies (as well as banks) have to protect themselves.

So don’t get mad and out to seek revenge if your bank denies you. Just find another bank that approves you. It may be difficult — but it’s not impossible. Besides, if it were extremely simple for everyone to get a merchant credit card account — anyone could set up a fake business today; have their friends charge purchases on stolen credit cards; transfer the funds into their account; withdraw it tomorrow morning and be on the way to Mexico in the afternoon!