It’s the nature of capitalism and life after all.
You invent or find some item – whether at home or abroad – at a Cost A to you, prepare it for your intended customer market at a Cost B, and then ‘add a little something to the price for yourself’ (Cost C) – and bingo! – the customer buys it at the (Cost A + B + C) retail price … and thereafter either feels they have gained a bargain, paid about what is right, or even have been ripped off.
But within that equation is the essence of how you develop a business activity and hopefully make a living or, if you’re very lucky, get filthy rich.
The purpose of learning a trade – or becoming professionally-qualified and expert at something – is all about obtaining the means to get you and yours through life in a degree of style and comfort that you would find acceptable.
That doesn’t stop the customer sometimes becoming a little cynical about it all.
A stark example from my own personal experience was the one and only time I looked up a local tradesman in Yellow Pages – to be frank, as I compose this I don’t recall whether he was an electrician or a plumber but it doesn’t really matter.
He turned up – informed me of his terms of trade – and made me sign a pre-prepared contractual agreement. I didn’t pay too much attention to it, but the deal was broadly that it was £85 or so for the call-out plus anything up to one hour of his time … and then it would be £50 or so per hour (or part thereof) if the work involved took him more than that. Seemed fair enough at the time.
And so he started work. About twenty minutes in, he informed me that he’d done his assessment and identified the problem – and there was a particular item of electrics (or plumbing) that he did not have with him and he would have to nip out to buy from a local wholesalers – I’d be paying on top ‘however much it cost’, but not to worry, it wouldn’t be more than about £30 to £40.
Again, seemed fair enough.
Well, he was gone about two and a half hours. When he returned he then fixed the newly-purchased item into the system and checked it was working … and all was well.
Sort of. Then came the bill part.
I was stunned to learn that – because in all his visit had lasted nearly four hours, I’d be paying £85 for the call out and then another £150 for the additional three hours (or parts thereof), plus £45 for the part he’d had to go out to buy.
As you can imagine, resentment soon kicked in.
Despite the fact that he may have been doing nothing more than he had forewarned he might, in my breast a suspicion grew that – just as likely – the swine might instead have simply gone round the corner to the local coffee shop, bought himself a full cooked breakfast – by arrangement, consumed it in the company of any of his local tradesman pals over an hour or so leisure time – all of them doing exactly the same before returning to the hapless customers who had the misfortune to have hired them.
I never used Yellow Pages again.
But it’s not just tradesmen. Step forward architects, chartered surveyors, estate agents, lawyers and accountants.
I’ve heard it so often that I believe it to be true, but anyone in their right mind should avoid hiring a lawyer or an accountant, or a bank manager, on anything relating to Wills, trusts, executorships and the like.
Why? Because they charge by the hour of their time supposedly spent. And – in that context, like my plumber or was it electrician? – they have no interest whatsoever in completing any task swiftly. They extend out their conduct of Will matters (under the guise of ‘doing everything by the book’) for as long as possible. Logically, there’s no incentive to rush towards any given end point when your lucrative ‘engagement of services’ is raking you in £SoMuch per month come what may, even if you’re working on other jobs as well.
A good friend told me recently of a lawyer who had proposed working on a Will for a fee scheme based upon the size of the estate concerned – not even a notional hourly rate!
I’m not suggesting that auditing need not be a valuable service all round, but equally the big accountancy firms rake in millions of pounds from conducting annual audits of companies – the main reason they can do this is that having an audit is a legal requirement. Nice money if you can earn it.
Thirty or forty years ago cosy client relationships meant that an accountancy firm could retain a particular audit for decades at a time. Despite universal lip service being given to notionally stringent professional standards applying, de facto there was precious little gain to be had from discovering (let alone doing anything about) an issue or problem arising during an audit process because, of course, maintaining good relations with the client was all part of retaining the lucrative gig for another period of time.
These days, inevitably perhaps, things are slightly different – there are bars upon auditing firms retaining their audits for more than four or five years at a time, ‘just to keep all parties, i.e. clients and auditors, keen and mean’. The biggest auditing firms (in the UK they call them the Big Four) can make millions per annum from each client in auditing fees – let alone sundry consulting fees as well – and thus clearly ‘staying onside with the client’ is any accounting firm’s goal/imperative.
But then again, when things go spectacularly wrong – e.g. a massive fraud or accounting error turns up (or indeed a company suddenly goes bust) – and the solid hits the fan, everyone – management, auditors, (whomever) in the cosy business/professional world of ‘scratching each other’s backs’ – runs for cover.
And then, very occasionally, a chicken or two come home to roost. I know nothing about the details of this case, but here’s a link to a piece upon an accounting auditor who has apparently and unfortunately had his quiet and no doubt lucrative profession career rather rudely interrupted – as appears today upon the website of – THE GUARDIAN