Gordon Woolf's Blog

The need to make a profit

The radio caller was critical of banks, which is not unusual, but she put it in a somewhat odd way: 'I have to pay them interest, but what do they actually DO (for me?)'.

This may be partly the reason for the current Occupy movements around the world. To some youngsters it may just seem that if their parents run out of money, they just have to go to "the hole in the wall', but to those parents does it also seem that if they can buy computers, washing machines, furniture and so much more on "48 months interest free", why should the banks charge interest. After all they are only giving you money for a while, not goods permanently.

I know that doesn't make sense, but it kinda sounds logical.

The reason for the demonstrations that I have sympathy with is that it is no longer true that the rich are getting richer and the poor are getting poorer -- it is, some people have pointed out with figures and graphs, that the super-rich are getting richer, and that the rich and the poor are getting poorer.

I could claim that some of my best friends are millionaires, which is not quite true but I have known a couple well enough to visit their homes and have them visit mine. I don't envy them. Sure they make more money than I ever had but they do have to work unusual and long hours and the stress level is more than I would want, even though as a newspaper editor I once flourished on stressful work.

But we now have company directors who get pay increases by the millions and yet manage to do similar work for several companies at the same time. If their individual jobs were at the stress level of "my" millionaires, they'd have been dead long ago.

That's what I mean by things getting less fair. And therefore in general terms the Occupy movement has my moral support.

I'm not particularly blaming the chain store owner with his 48-months interest free and similar offers. The one I have in mind has said that people are stupid to accept some of the offers made in his stores as they don't suit everyone.

It is necessary for businesses to make a profit in order to reinvest but there is a big difference between making a fair profit and making the most that you can. Is the first aim of company directors to make the most profit for their shareholders or a profit which will ensure that the company continues to be viable into the future? Customers are important too, with the rest of the community needing at least a little consideration occasionally.

I don't think the unfairness claim can be made against more than a small number of the people who run companies -- it just seems like that sometimes.

How to work internationally

I've been approached by a client in another country. What can I do now to prevent unnecessary complications later?

The Internet is truly international and gives the opportunity for many individuals and small businesses to work for clients around the world. So my answer to the above question was that you should do very few things differently to what you should be doing anyway.

One difference is that you should make sure that you agree what currency the payment will be in, when it will be paid and how it will be paid. And also make sure the work involved for that payment is stated very clearly.

Neither side will be happy if you find that making the payment costs as much as the payment itself. If the client is in one of the many countries where payments can be made by PayPal that would be good, and if you must accept payments by bank transfer make sure your bank knows all about the details you will need from them and what they will charge for processing while suggesting your client makes the same enquiries at their end. I've heard of transfers costing from $5 to a hundred dollars and more for quite small amounts of money (a few hundred dollars).

If you have a good feeling after a few initial email exchanges then it is likely all will go well. I have only had one client refuse to pay and that was a US company well known for its charitable work. On the other hand many many years ago when a firm in a country which ends in ...stan owed me a small sum they eventually got a US client of theirs to hand me a small brown envelope of dollars when I was on a business trip to the USA after the original client's government had made overseas payments almost impossible.

Most clients want the association to go well but it is still a good idea to do some internet searches on business and individual names and locations.

Then, as I have already said, do what you would do for any other new client. Ask for an advance and make sure that if a job will take a substantial amount of time that you get progress payments. And do not accept excuses for delayed payments. If the money stops, you stop your work.

 

Changes in the way data is stolen

Some interesting facts in the latest Verizon Data Breach Investigations Report, which, for the first time, for 2010, was a joint report by Verizon and the US Secret Service.

This applies only to breaches within the USA of course, but there are still some lessons for us all.

Firstly, of 84 "confirmed breaches of data security" investigated by the US Secret Service, 66% led to arrests. Not all got the publicity of Albert Gonzalez who was sent to jail for 20 years in March this year for stealing more than 90 million credit and debit card numbers. In fact some received no publicity at all as the companies from which the data was stolen were loathe to have their problems revealed.

Most thefts happened in-house: rogue employees such as programmers were involved in nearly half the cases, but they involved only 3% of the records stolen. In other words, the inside jobs were amall jobs. But the report warned about outsourcing:  "Organizations that outsource their IT management and support also outsource a great deal of trust to these partners."

And there was not a single case involving a foreign government.

SQL database queries were used in more than half the cases: programmed queries that pluck data from the system and send it to the requester. This is a bit like the queries you can set up in Access or the old DBase. It seems to mean that the real problem is in the programming used by a vast majority of businesses.

Keyloggers, the programs that record what users are entering via the keyboard, and which can be hidden in other programs or installed without the user's knowledge from compromised websites, and which are often used to scare users, accounted for only 1% of the stolen data -- down from 80% the year before. So the bad guys have found better ways to steal the info.

And what of the other big scare tactic: keep updating or you'll compromise your computer? Well, Verizon and the Secret Service could not come up with a single case which "exploited a patchable vulnerability."

One wonders however whether companies are keeping as close a watch on their data as we might reasonable expect. The report states: "Third-party fraud detection is still the most common way breach victims come to know of their predicament".

As Woody Leonhard states in the Windows Secrets newsletter: "Companies learn of breaches when customers report them. So if you think your data's been stolen, holler yer head off!"

Are you giving your password away?

"I wouldn't do that" would probably be your answer to the suggestion that you could be giving your password away.

But think about it. Do you have passwords on scraps of paper? Do you use the same password for many sites on the web where you have to log in?

As someone involved in publishing, have you ever given out your password for someone to upload a file to your website or FTP site? Maybe you can change that afterwards, but does it bear any similarity to the password you use for online banking?

There have been many warnings that you should never believe the phone caller who says they are from your bank or some other payment processing service, but it continues to happen, and last year TechWeb reported how a security firm has used official-looking pollsters in New York's Central Park to ask questions from the mundane -- "Is this your first visit to New York City?" -- to the personal -- "What's your mother's maiden name?"

More than 70 percent of those polled gave up their mother's maiden name -- a potential goldmine, since it's often used to confirm identities or demanded in a password reset -- while over 90 percent handed over their place and date of birth. More than half told the pollsters how they come up with online passwords.

I should add that I have always wondered about why banks use that mother's maiden name question. But then I've lived in small towns where everyone would know the family name of just about everyone else's mother. "George Smith? Oh, yes, he married the girl of Green!"

How many of the readers of this use as all or part of password their place of birth, favorite sports team, pet's name, spouse's petname or name for you. Or used any of those words backwards? How easily would you give that information in an answer to a phone or street poll? Especially if you were promised a gift or discount of some kind.

Whether you do or not, it may be a good time to change your password. Today.

Do we need bread for the bread?

The sandwich shop owner appeared on TV screens around the world. His shop was on Wall Sreet and he was being asked how the credit squeeze affected him. It was, he said, making it difficult. He was having problems borrowing the funds to pay wages, and to buy stock.

Hey! Time for a reality check: if a sandwich store owner has to go into debt to pay wages and buy his fillings, then we are all facing disaster. This is the true cash business. Buy bread and butter in the morning, sell it at lunchtime and pocket the profits in an afternoon. The founder of the Subway empire, so legend states, needed only a thousand from a friend to get not only the stock but the equipment he needed.

Of course we now have a new definition for “market trader”. It means the denizens of Wall Street and their ilk around the world who believe in derivatives and that you can sell things before buying them. The true market trader is of the kind who had a stall in London's Petticoat Lane or on Portobello Road; he or she had a simple business plan: buy, markup, sell, buy again... There was generally no place in the expenses which had to be covered by the markup for loans to run the business.

Loans exist to provide capital. Sometimes that capital is of a short term nature. I recall from my own past of going to see the bank manager because we had planned a trade directory and the idea had sold so well that we did not have enough money to print it; the ads we had sold more than covered the print cost and we had an advance order from a government department for a couple of hundred copies, but none of that money would come in for at least two months and the print bill had to be paid on delivery. We'd actually done quite well in getting prepaid ads but the print bill for a book a lot larger than we had envisaged was therefore way above what we had budgeted.

The manager, in a major bank in London's Fleet Street, heard our tale, looked at our figures and allowed us the few hundred pounds we needed. He chatted about our plans for a magazine in the same field as the directory and then told us he had to leave for a meeting with another client who had a similar problem. We might even read about it next day.

We did. Rupert Murdoch bought the News of the World.

Our tale is a good example of what banks and other means of getting credit are for. They are not to provide daily running expenses. Unfortunately many people seem to have forgotten that.

Afterthought: We wonder if the conversation between journalist and Wall Street sandwich shop owner really went like this:

J: You must be hit by this credit crisis...

SSO: Well, maybe a little. It'll cut our sales if the businesses upstairs cut their staff.

J: How about I bring our cameras in and we'll do a piece on how this affects the little guy. You'll get your face on screen and everyone around here will recognise your shop in the background.

SSO: That's be good. Yes, I can say I need credit... I've got wages and I have to buy the bread. That's it, I need bread for the bread.

J: We won't go overboard! But the news director told me not to come back without some man-in-the-street footage.