Sub-postmasters net returns
by Julie Dove, Cobweb Information Ltd
There are currently more than 17,000 sub-postmasters in the
UK, employing approximately 40,000 assistants. However, anyone
watching the news on TV or reading a paper might be forgiven
for thinking that the UK postal network is in terminal decline,
as news stories highlight branch closures and focus on the difficulties
faced by sub-postmasters in some areas.
No one is denying that sub-postmasters are operating in a market
that is undergoing considerable change. However, for the enterprising
business person this is creating a number of opportunities that
appear to be largely unexploited.
Following a period of upheaval, which saw the closure of around
260 sub-post offices in 2002, the number of post offices facing
closure is continuing to fall. Figures for 2002 suggest that
when sub-postmasters resign or retire, more than 70% of rural
branches, and approaching 90% of urban branches, are retained
and a new sub-postmaster is appointed.
In June 2000, the Government's Performance and Innovation Unit
published a report, Counter Revolution - Modernising the Post
Office Network, which considered the future of the UK postal
service and, in particular, the role of sub-post offices.
The report outlined a number of areas where action was considered
necessary in order to maintain a national network of post offices,
including the subsidy of rural post offices, along with plans
to stop the closure of rural post offices. It was recommended
that urban post offices should be made bigger and brighter and
designed in keeping with neighbouring retail outlets, and that
post offices in deprived urban areas should be subsidised.
Acting on the report's recommendations, in December 2002 the
Government announced a £450 million support package, spread
over three years, for rural post offices. Each year the funding
provides £66 million to maintain sub-postmasters' income levels,
£15 million to develop new business initiatives and more than
£69 million to improve current service delivery - a sizeable
investment in rural businesses.
Within the same month, the Government announced the formation
of a £15 million fund for urban post offices located in deprived
areas. The focus of the scheme will be grants of up to £50,000
for sub-postmasters to maintain, modernise and expand their
These initiatives are designed to ensure that the post office
network is not only maintained, but also grows, offering services
and facilities necessary in the 21st century.
The UK sub-post office network is the largest retail infrastructure
in Europe, and a number of organisations appear to be interested
in using the network to deliver some of their services, particularly
in rural areas. To assist sub-postmasters in developing the
retail side of their business, Post Office Ltd, which manages
the network, is looking at amending the sub-postmaster contract,
which contains some restrictions preventing the development
of some types of business.
Future developments include the introduction of the Universal
Banking system, which will provide a post office-based solution
to the new electronic system of paying benefits directly into
recipients' bank accounts. The only organisations able to make
payments into the account will be Government departments and
agencies. The card account will be accessed through Automat
PIN Pads within all 17,000 post office branches in the UK. Standard
bank accounts will also be accessible via local post offices.
Post offices are to expand their role in the provision of information
to the general public on Government issues, and will help customers
with routine transactions involving Government bodies.
Dealing with pensions and giro cheques currently accounts for
approximately a third of most sub-post offices' income. New
initiatives are being introduced as the role of the post office
changes. For example, to counter the loss of income, new business
has been developed, with products such as travel and insurance
being heavily promoted.
Although the position of sub-postmaster cannot be purchased,
with applications being handled by Post Office Ltd, the opportunity
to run a self-employed business with an employed wage (from
the Royal Mail Group) as well as a self-employed income (from
the retail activity of the shop) can be an attractive proposition.
If you think running a sub-post office might be for you, further
information can be obtained from Postmasternet (www.postmasternet.co.uk)
an online community for sub-postmasters, providing information
on the day-to-day running of post office branches and the retail
opportunities for sub-postmasters. After all, this might be
the business opportunity you are looking for.
Postmasternet is an online community for sub-postmasters
and contains detailed information relating to the day-to-day
running and retail opportunities for sub-postmasters to maximise
their retail business, www.postmasternet.co.uk
Cobweb Information Ltd is an independent researcher and publisher
of the UK's widest range of factsheets, guides and reports for
entrepreneurs and their advisers. Well known to business intermediaries,
such as the high street banks and business advice agencies,
Cobweb also offers information sources direct to end users.
Cobweb is working with Postmasternet to deliver information
that is relevant, up to date and targeted at anyone running
a sub-post office, www.cobwebinfo.com