Arbitrage is when you buy something in one market while you sell it at the same time in another market so that you can profit from the differing prices for the same item. This used to be much easier when knowledge still travelled by paddle steamer or carrier pigeon.

I have spent the past few weeks researching how the CrashProof tactics might work in the UK, and in the process learned so much useful stuff that I feel the urge to over-share.

When I first arrived here I looked up an accountant, gave him the book, and asked whether these ideas might work in the UK. "Do UK business owners also sign sureties, and do they also lose their homes when their businesses fall down a cliff?" I asked.

His abrupt response from the moral high ground (which made me feel very colonial, dressed as I was in my best khakis, long socks and vellies) was "that there is no such thing as surety in the UK and frankly there is little place for this kind of thing  in this country, thank you very much."

As it happens, I was a little upset. Clearly these folk were far more ethical than we Africans (with Bob the War Hero adding new value to this belief these past few months). And so I did not explore that avenue again, having  just paid £100 to get this opinion. (About R1500 in real money.)

Until four weeks ago, when I sat down with a local expert in banking matters. After outlining the CrashProof concepts his instant, very sober response was "I wish I had thought of that." (I got that opinion for the price of a beer: a mere R40.)

Turns out the accountant was right. They don't have sureties here. And they don't have covering bonds either. They speak proper English, so the correct parlance is that the bank takes a charge against your home.

(And they do sign a guarantee, it's just that it is such an accepted part of financing your firm - this giving away of your home when you borrow money - that they no longer even think about it.) And when my new hero saw that there is a way around it - he was stunned. As was I! I am so embarrassed that I did not take a second opinion two years ago!

Which reminded me of the first time I tested the ideas on an accountant in SA in 1992. "That'll never work," he said. I ignored him and took a few other opinions before launching the seminar in 1995. At that time I was living the nightmare.

I did the same seminar to about 100 KZN accountants in 2002. They were very, very quiet though the 3 hours. After talking to about 20,000 business owners over the previous 7 years on this very subject - and knowing what they laughed at - the silence was very disturbing. At the end, as I was about to slit my wrists, the top honcho came up to me and said "Wow. That was amazing. I have never seen them so animated!"

So I have been inspired to meet with local attorneys,insolvency experts and accountants; find out how the laws differ between SA and the UK; and look at what they're doing to protect themselves when things go pear shaped.

(The UK government accepts that business failure is part of the cycle, and that bankruptcy is a very common result. It takes but a few moments to arrange, and exactly a year later it's gone and you get your life back. As a UK bankrupt you keep all the tools of your trade. If you're a techie, for instance, you keep your PC and other stuff, although there might be some discussion about that new R40,000 17" Apple MacBook Pro; or if you're a builder you keep the truck full of tools.

Contrast this with SA where judgments last for 30 years, and bankruptcy is truly stressful, often lasting longer than your wildest nightmare. Of course, you can still keep your tools. The last time I looked you were allowed to keep about R60 worth of them. Lets see, that's about 20 blank CDs.

The more I travel the more I realise how the little things we each do in our home towns really do translate well into new places. We  just have to explore a little deeper to make sense of local conditions, and ask more questions of more people. This is vital if the first person you ask gives you answers you don't like.

Of course, now that I have done this research, I can bring a completely new way of looking at the issues to the SA version of the seminar. Software has improved so much over the past 4 years (since I last presented it) that it is also much easier to lay out the web between you, your bank, and your about to be ex-home - and how to fix them in such a way that your banker will love you.

In my simple mind the concept is one of geographic arbitrage - selling the same idea in different markets for different prices because the local people speak funny.

The CrashProof your Business seminar runs for three hours from 6pm and will give you a new way to look at banks, business and money, including the tools to get your home and your money back.

    * Sandton on 25 or 26 August
    * Cape Town on 1 September
    * Durban on 2 September.

My about to be unemployed systems guru assures me that it isn't his fault that the early bird special price of R997 (which should have closed on Monday night) is still open until Thursday night. I hope to see you at one of the sessions. (They're limited to 100 people because that's about as many names as I can remember in one day.)

Click here and I promise that you will survive anything the economy can throw at you.

I had a call from a business owner this morning worried about the credit crunch and how he could not afford R997-00 for a mere seminar right now. (In response to yesterday's PetesWeekly about the CrashProof your Business seminar.)

"What can you tell me that I don't already know after 7 years in business?" he asked.

"How big is your overdraft?" I asked.

"R100,000," he said.

"Would you come to the seminar if I promised to put R26-90 into your bank account every day for the rest of your business life? That means that just one tactic I will share will save you R997-00 over just 37 days, including weekends. And that same tactic will save you R997-00 every 37 days for the rest of your life. Bear in mind that this is money that you are just wasting each day."

 "How can you do that?"

"I will show you why your bank charges so much interest on your overdraft, and why 99% of us let them get away with it. That means you waste R997-00 every 37 days. This is money that you are wasting right now because your banker knows a bit more about his money than you do..

The last time you negotiated with your banker he knew something that you didn't. That allowed him to charge you more than you should be paying. I will show how to fix that, and your banker will then happily cut your interest rate between 5% and 7%.

Of course, that's just one of a whole group of tactics that will save you money, secure your life assets, and make sure that the only person who can close your business is you."

There is a tiny loophole in all short term insurance contracts. In normal times it is not worth worrying about. In times like these it is crucial. Let me explain.
 
Assume that your home costs R1-million to rebuild. When you bought it three years ago it cost R500,000. Your insurer will increase the cover on your home by 10% each year. That means that after 1 year your premium rises a little and your home is covered for R550,000. The next year that rises to R605,000. And after the most recent year, your home is insured for R660,500. (that's a long way short of R1 million.)
 
There is nothing wrong with that. At least, not until something goes wrong. Maybe it's a fire, or maybe a flood, but let's look at what happens now if your home is destroyed.
 
The loophole is called 'AVERAGE'. This means the following.
 
When you put in your claim for R400,000 damage, the insurer will point out that you did not really insure your whole home. You only insured 66% of your home. (It was worth R1 million, but you insured just R660,500.)
 
That means that they only have to pay out 66% of your claim, and 66% of R400,000 is R264,000, leaving you to pay R136,000 towards repairs.
 
If you had a total loss, your R660,500 leaves you under-insured by R339,500, which you will have to meet yourself. Heck, given the market of the past few years, the chances are strong that you still owe more than that on the bond!
 
As I said, this is not a problem in normal times. But the recent past has not been normal, and the good news is that home building prices went skyward until a year or so ago. The bad news is that most of us are badly under-insured, and if something happens now the Insurer will not pay out what you expect or need.
 
Please don't feel alone. If your home is worth less than R1.5 million, then you are in the same leaky boat as 86% of all home owners who are insured for only 45% of the correct value. If your home is worth more R1.5 million, then your sum insured is likely to be only 55% of the correct value.

The same rules apply to contents. The sum insured must be the cost of buying new contents of the same quality.

Yet 78 of every 100 people are only covered for 39% of the true value of their contents.
 
This means that on a R50,000 claim, they will only get R19,500 from insurers. They need to pay R30,500 themselves!

So, when you choose your sums insured do not think of your lounge suite as 10 years old, and worth nothing. What will it cost to replace it?
 
Part of the problem is that we forget what we have hidden in our houses. Out of sight is out of mind, which leads to out of pocket.
 
If you would like a form to help you work out the right sum insured, go here, and work through it valuing each item at its new price. The results should be startling.

Phil Cooper is a long standing Business Warrior and friend. It was his suggestion I tell you about this problem. Chances are good that nobody else will.

A few folk have seen fit to complain about my writing these past few weeks. They say I no longer say good things. I only focus on the bad, it seems. It appears that my raising the spectre of failure is a bad thing. I am buying into all the tabloid hype about our economy, I am told.

I thought I had run my last CrashProof workshop in 2003. The country was booming. We were all floating on a rising tide of cash. The future was so bright we all needed Ray-Bans, except for KZN where Oakleys were all the rage. Five years later and the playing fields have potholes.

Since the start of this year I have lost thirty Warriors each month as they have closed down. That's not focusing on the bad. That's reality. If that trend carries on, I will lose almost a third of my client base this year as they close their own firms. That's not hype. That's reality.

I am not a journalist. My role is not to scare you. I value the fact that you think my words might be worth reading each week. I don't buy into the headlines about massive job cuts, or price hikes. At least, not until those effects ripple down into my clients.

The state of affairs is tight, in my opinion. That's why I decided it was time to discuss ways to survive business closure because so many of us are facing it. That's what the CrashProof seminar does.

I do not think it is fair when a small business owner (or self employed person) is forced to lose everything because the economy has taken a step backwards. That is what happens to most of us little folk.

I find it strange that the MD of Eskom, the person most to blame for the parlous place we find ourselves right now, retains his job, his bonus, and his future, when the results of his choices are putting my friends and clients out of business.

It does not seem fair that he can hurt so many people and not be held to account, while my hero is caught in the net and loses his daily bread, his home, his life savings, and five years of his future. (Or hers.)

I do not think it is right to stay silent about it. That means I face a choice of my own. Do I join the crowd and bay for his blood, knowing that it will not happen in my lifetime? Do I teach people I like and respect how to cope with events and how to salvage their daily bread, their homes, and their life savings?

I have chosen to help those folk I can, rather than to tilt at the windmill that is Eskom. Given their progress we may need that windmill soon!

Life is a fascinating journey, peppered with extremes.

From the day we're born we're taught to be careful with money. Usually by our parents, and our grandparents, and our teachers, and a whole bunch of other folk with one thing in common -- they earn salaries.

BBBEE Update: This week one of the Business Warriors was asked to join the table to discuss the finalization of the codes of good practice for BBBEE for small business.

If you've ever been a salesperson -- of the travelling variety -- then you will remember how much time you "invested" in getting lost?

Business is about money. Without money no business can realistically survive. Yet very, very few of us small business owners understand anything about money