I moved from Denmark to London in 1999 to study at South Bank University. After graduating, I spent the next fifteen years in the IT, dot-com and telecommunications industries.
I started on a British Telecom graduate programme and ended up being Head of SEO at Lastminute.com, managing a multi-million dollar SEM strategy in the travel sector, all while adding to my résumé (which also includes serving in the Danish Royal Navy and being a chef in Michelin-starred restaurants back in Denmark).
But through all of this I was on the lookout for the right opportunity:
The opportunity to start my own business. Something which had been my dream since I was a child. As is usually the way with these things though, the opportunity arose when I wasn’t expecting it…
One day, moving out of the London flat I was living in at the time, I noticed a red wine stain on my carpet. My initial thought was, of course – “I’m never going to get my deposit back”.
After ringing round a whole bunch of cleaning companies, I was even more certain this was going to be the case. None of them looked like they were going to get results – and none of them would provide a quote over the phone.
This annoyed me to the extent that I was happy to spend a little time complaining about it at a friend’s dinner party the following evening.
By sheer luck, the person I ended up chatting with was someone who had their own personal interest in the subject…
Anton Skarlatov is now my business partner. But at the time, he had his own cleaning company. He was only too happy to talk about the state of the industry. We soon realised we shared a similar vision for what the services industry should really be like.
Wouldn’t it be great, we started saying to each other if we could do it better? Do it differently? Do it by taking everything back to basics? Focus on delivering a quality of service which couldn’t be questioned?
In short, we were picturing services which were… fantastic.
And that’s how, in the early part of 2009, the Fantastic Services journey began. We had two laptops, a sofa to sit on and one shared mobile phone.
(Of course, we’d decided to do what we thought was the smart thing and self-fund everything. This turned out to be the best decision in the long-run. But our lack of resources was a real obstacle in the beginning.)
We started with the basics:
Our first goal was to simplify the entire process. From the initial enquiry and booking through the service itself to final payment. We knew the quality of our results had to speak for themselves in order to really stand out.
As well as some technological solutions, this meant we needed high-quality services delivered by professionals who would take pride in their jobs and take them seriously.
This was something that no one else seemed to be doing at the time – taking the services industry seriously. No one seemed to treat it like it could be an attractive or profitable one.
That might sound like an unattractive prospect in itself. But, to be honest, it only made us more convinced that our vision of a trustworthy brand represented by proud, happy professionals was one which was going to find a home in the market.
At least, we were convinced that it would in the near future…
Starting out though, this was definitely not as “clean” a process as we were hoping for. We were living on fast food and energy drinks, barely sleeping, spending 80-90 hours working every week. This had a huge effect on our personal lives. Friends, family, relationships – there was very little time for any of them.
Plus, our competitors were the furthest from welcoming I’ve ever experienced. Within a month, the tires on our branded vehicles had been slashed, we’d started receiving Facebook messages threatening to shut down our website and the phone lines to our call centre were cut.
This was partly due to the fact that the combination of my tech knowledge and our joint desire to make our services truly fantastic in terms of quality had borne fruit:
We were growing. It was a great feeling! But it also became the source of one of the biggest challenges I have ever faced as a business owner – trying to balance the see-saw-like situation this early growth created…
Initially, we had too many cleaners and a low number of clients. Then we had too many calls and not enough manpower.
With the quickly increasing demand and limited resources, we had to learn to think outside of the box. This meant we had to abandon multiple projects we had planned and relocate the project managers from one task to another. This affected our productivity in a bad way.
The takeaway point for me was to expect the unexpected and be prepared for different scenarios.
But, we were determined to make it work – and to keep on growing. We did so guided by what our clients were asking us for. Soon we were expanding out from cleaning to offer other linked home maintenance services based on what our customers told us they actually wanted from us.
We were also focused on creating those proud, happy professionals which had been a key part of our original vision. The approach we adopted – one which remains true today – is what we now call our 360-Degree Happiness philosophy.
This is the idea that everyone in the company should be treated like a partner – equally, with respect for the skills and dedication which they bring to the team.
Even including the passion and drive we had in the beginning, I think it’s this philosophy more than anything else which has stood us in the best stead over the years.
Now, ten years after we were working 80-90 hour weeks living on junk food with one mobile phone between us, in 2018 the business reported over £32.5 million worth of services, around 300 franchise partners and nearly 2,000 professionals operating under the Fantastic Services brand in the UK alone. We’ve also spread to Australia and the US.
Acquiring My Plumber – the London-based leader in plumbing services – is the latest extension of our expansion strategy of offering more of the kinds of services which our clients have told us they want to book with us.
All in all, 15,000 clients use us to make their lives just that little bit easier and happier every single month.
In my opinion, entrepreneurship has to start with hard work and perseverance. You need to be willing to overcome the constant challenges and not get downhearted, to “fall down seven times and stand up eight” as my favourite proverb has it.
But if you have a clear vision of what you want to achieve and you dare to try, you can turn your dreams into reality.
What to Know Before You Expand Across Borders
By Sean King, Director of International Tax at McGuire Sponsel
The American retail giant, Target Corporation, has a market cap of $64 billion and access to seemingly limitless resources and advisors. So, when the company engaged in its first global expansion, how could anything possibly go wrong?
Less than two years after opening its first Canadian store in 2013, Target shut down all133 Canadian locations and terminated more than 17,000 Canadian employees.
Expansion of an operation to another country can create unique challenges that may impact the financial viability of the entire enterprise. If Target Corporation can colossally fail in its expansion to Canada, how might Mom ‘N’ Pop LLC fare when expanding into Switzerland, Singapore, or Australia?
Successful global expansion requires an understanding of multilayered taxes, regulatory hurdles, employment laws, and cultural nuances. Fortunately, with the right guidance, global expansion can be both possible and profitable for businesses of any size.
Any company with global ambitions must first consider whether the company’s expansion outside of the U.S. will give rise to a taxable presence in the local country. In the cross-border context, a “permanent establishment” can be created in a local country when the enterprise reaches a certain level of activity, which is problematic because it exposes the U.S. multinational to taxation in the foreign country.
Foreign entity incorporation
To avoid permanent establishment risk, many U.S. multinationals choose to operate overseas through a formal corporate subsidiary, which reduces the company’s foreign income tax exposure, though it may result in an additional level of foreign income tax on the subsidiary’s earnings. In most jurisdictions, multinationals can operate their business in the foreign country as a branch, a pass through (e.g., partnership,) or a corporation.
As a branch, the U.S. multinational does not create a subsidiary in the foreign country. It holds assets, employees, and bank accounts under its own name. With a pass through, the U.S. multinational creates a separate entity in the foreign country that is treated as a partnership under the tax law of the foreign country but not necessarily as a partnership under U.S. tax law.
U.S. multinationals can also create corporate subsidiaries in the foreign country treated as corporations under the tax law of both the foreign country and the U.S., with possibly two levels of income taxation in the foreign country plus U.S. income taxation of earnings repatriated to the U.S. as dividends.
Under U.S. entity classification rules, certain types of entities can “check the box” to elect their classification to be taxed as a corporation with two levels of tax, a partnership with pass-through taxation, or even be disregarded for U.S. federal income tax purposes. The check the box election allows U.S. multinationals to engage in more effective global tax planning.
Toll charges, transfer pricing and treaties
When establishing a foreign corporate subsidiary, the U.S. multinational will likely need to transfer certain assets to the new entity to make it fully operational. However, in many cases, the U.S. multinational cannot perform the transfer without recognizing taxable income. In the international context, the IRS imposes certain outbound “toll charges” on the transfer of appreciated property to a foreign entity, which are usually provided for in IRC Section 367 and subject to various exceptions and nuances.
Instead, the U.S. multinational may prefer to license intellectual property to the foreign subsidiary for a fee rather than transfer the property outright. However, licensing requires the company and foreign subsidiary to adhere to transfer pricing rules, as dictated by IRC Section 482. The U.S. multinational and the foreign subsidiary must interact in an arms-length manner regarding pricing and economic terms. Furthermore, any such arrangement may attract withholding taxes when royalties are paid across a border.
Are you GILTI?
Certain U.S. multinationals opt to focus on deferring the income recognition at the U.S. level. In doing so, they simply leave overseas profits overseas and delay repatriating any of the earnings to the U.S.
Despite the general merits of this form of planning, U.S. multinationals will be subject to certain IRS anti-deferral mechanisms, commonly known as “Subpart F” and GILTI. Essentially, U.S. shareholders of certain foreign corporations are forced to recognize their pro rata share of certain types of income generated by these foreign entities at the time the income is earned instead of waiting until the foreign entity formally repatriates the income to the U.S.
The end goal
Essentially, all effective international tax planning boils down to treasury management. Effective and early tax planning can properly allow a company to better achieve its initial goal: profitability.
If global expansion is on the horizon for your company, consult a licensed professional for advice concerning your specific situation.
Pandemic risks eclipse treasury priorities as businesses diversify investments to mitigate impact
The Covid-19 pandemic has shunted aside existing challenges to sit atop treasurers’ priority lists, according to “The resilient treasury: Optimising strategy in the face of covid-19”, a survey run by the Economist Intelligence Unit (EIU) and sponsored by Deutsche Bank.
The results show that treasurers are looking to diversify their investments in a bid to mitigate the pandemic impacts, including heightened liquidity, foreign-exchange and interest-rate risk. As many as 55% plan to increase investments in long-term instruments, with 48% increasing investments in bank deposits, another 48% in local investment products, and 47% in money-market funds.
“The Covid-19 pandemic has drastically altered business plans in 2020. It has placed a certain level of strain on treasury processes, but the challenge it presents has been managed by traditional treasury skills. It is clear that pandemic risk will be on the treasury checklist for years to come, but it is one of many risks the department faces and will continue to manage,” says Melanie Noronha, the EIU editor of the report.
Despite Covid-19 looming large, other challenges wait in the wings. Notably, the replacement of the London Interbank Offered Rate was identified by 38% of respondents as the main challenge of their function.
Technology, meanwhile, continues to be a pressing issue, with treasury teams becoming increasingly reliant on IT solutions. Here, data quality is rising up the list of concerns. Already highlighted as very or somewhat concerning in 2019 by 69% of respondents, the figure rose to 78% in 2020. Acquiring the necessary skill sets to realise the full benefits of this data and technology is also a continuing priority – with some progress registered from last year. In 2020, 30% of respondents say they have all the skills they need to manage technological change, up from 22% in 2018.
“Treasury’s focus on technology is not only helping teams operate more efficiently in a remote-working environment, it has long played – and continues to play – a key role in realising their long-term priorities,” notes Ole Matthiessen, Head of Cash Management, Corporate Bank, Deutsche Bank. The survey shows that
Release 1 | 2 managing relationships with banks and suppliers (highlighted by 32% of respondents) and collaborating with other functions of the business (also 32%) remain top of the agenda – and seamless digital systems will help give treasurers the bandwidth and insight to be more effective partners for both internal and external stakeholders.
Based on a global survey of 300 treasury executives, conducted between April and May, the survey explores stakeholders’ attitudes among corporate treasurers towards the drivers of strategic change in the treasury function – from the pandemic through to regulation and technology – and their priorities for the next five years.
Digital collaboration: Shaping the Future of Finance
By Ryan Lester, Senior Director of Customer Experience Technologies at LogMeIn
With heightened economic uncertainty and increased customer expectation becoming the norm in the banking industry, it is understandable that the sector is struggling to keep afloat. Due to its precarious nature, banking institutions are trying their best to ensure they remain relevant in the competitive landscape and guarantee that their customers continue to be a priority.
When it comes to the first half of this year, the pandemic has shown how easy it is for industries to fail. Customers and companies alike had to get used to the new normal, as physical locations started to close. The banking industry felt this first hand, as banks were made to restructure how their business ran, with restricted opening hours and a wider push to motivate people to use online banking.
While some had already embraced digital options prior to the pandemic, this proved to be a stark contrast to the elderly population, who frequently visited branches to access their finances. Moving forward, banks have to adopt new methods to ensure customers get the most out of our their accounts, without their experience suffering.
Heightened Customer Expectations
When the pandemic reached its peak, people were encouraged to use online banking, as telephone contact was under strain with long waiting times and pressure mounting on contact centre agents. According to Fidelity National Information Services (FIS), which works with 50 of the world’s largest banks, there was a 200% jump in new mobile banking registrations in early April, while mobile banking traffic rose 85%.
With branches remaining closed, customers were continuously being urged to limit the amount of calls they made to the most urgent cases and consider whether they could solve their answers through mobile online banking or checking the company website. Although already being adopted in pockets of the industry, this was a real catalyst that spurred banks to up their game on digital channels and with self-service tools.
Banks are challenged with precariously balancing customer needs with the cost of personalised support. With the demographic of customers changing over the last few years, customers are becoming increasingly younger and more comfortable with technology. Influenced by the “Amazon Effect”, their expectations have raised to an all-time high, placing record strain on the sector
Customer experience isn’t just about support anymore, it’s about serving your customer at every point in the journey. Companies have an opportunity to elevate the experience they provide by moving beyond one-and-done interactions to create continuous engagements with their customers. It is starting to become a primary competitive differentiator in the market and one that doesn’t have a lot of variation. Deploying AI chatbot technology will be able to strategically help banks improve customer experience and raise the level of support that agents provide.
Digital collaboration: Working around the Clock
The benefits of adopting digital channels and self-service tools are second to none. By implementing chatbots, fuelled by conversational AI, banks will be able to help serve a wide range of customer queries and ensure they are protected from fraud and scams.
Conversational AI is exactly what it sounds like: a computer programme that engages in a conversation with a human. When it comes to service delivery, conversational AI can be deployed across multiple channels to engage with customers in ways that effectively address evolving customer needs. At a time defined by COVID-19, self-service tools such a conversational chatbots can work around the clock to solve customer queries in a concise and timely way. Of course, self-service tools won’t completely replace human agents in the banking industry, but they will help companies re-distribute customer traffic and workflows in ways that enhance customer experience. Self-service tools fuelled by conversational AI can also improve employee experience because service employees can handle fewer, but higher-level service tasks that chatbots might escalate to them.
Adopting new tools to help facilitate consistent and concise answers and help maintain customer experience is on the forefront of many industry minds. Banks such as the Natwest Group have seen this first-hand and are testament to the benefits that a good digital experience can provide. Simon Johnson, Capability Consultant, Digital at NatWest Group highlights NatWest’s use of digital tools during lockdown, “Over the last few months, we’ve learnt how to use digital tools to help our employees remotely. From a banking perspective, there have been a lot of changes including base rates, waive fees and the best ways of contacting our vulnerable customers, ensuring we keep them protected from frauds and scams.
“By introducing our Bold360 chatbot interface, Ella, we’ve been able to get relevant information out quickly, apply the best practice and ensure that our customer journeys are being developed correctly. Due to the volume of questions, some of our customers were finding themselves waiting longer than usual. So digital channels become essential to helping reduce the wait time. Using Bold360, we were able to mitigate issues and answer questions in a more timely way through our chatbot.
“Moving forward, as we open more digital services, we are analysing our data to see if customer will return back to their usual way of banking, now that they’ve seen what a good digital experience can provide. Either way, with Ella, we are ready.”
Chatbots and Humans: The Best Option for Customer Service
Over the last year, banking institutions have recognised the power that digital collaboration can have to their success. Delivering exceptional customer service and support is key for any business wanting to stay competitive in today’s market and banks are especially challenged with precariously balancing customer needs with the cost of personalised support. Leveraging the right technology, such as AI-powered chatbots, will enable the banking industry to provide better support and a more robust customer experience in the long term. Other institutions must follow suit, or risk becoming obsolete.
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