‘All the world’s a stage …’ Part 1
The egg heads amongst you would have noticed the deliberate mistake in that the Johnny holding the skull is clearly ‘Hamlet’ but the quote is from ‘As you like it’. Well at school I didn’t and barely scraped a pass in my Eng Lit ‘O’ level…
All this is is a fairly tenuous link into the first of a series of blogs about the different stages a business goes through. It is important to recognise the stage your business is in because they all have different needs and requirements. In my role as a ‘Virtual FD’ to some of my business clients, I find the nature of the advice changes too – the advice I would give a start- up business for example would be quite different from one where the business owner is looking to sell.
What are the stages in the life of a business?
To my mind there are 4:
- Start-up stage
- Growth stage
- Mature stage
- The end game
In this, the first of 4 blogs, I will examine the start-up stage and give you some do’s and don’ts’ which, whatever stage your business is in, you will find useful.
This stage I would define it as the first 5 years. A report back in 2014 on start-up businesses found that 50% did not survive this 5 year period… Sobering stuff, but after this 5 year period, the business should have established itself where it can move on from survival mode into the growth mode of the second stage.
Watch the cash flow very carefully, sounds obvious but a lack of cash is the biggest threat to a newer business than any other factor as it has not had the chance to build up reserves
- Choose your accountant wisely… I know I would say this but your accountant should be your key advisor and confidant; most accountants badge themselves as ‘Business Advisors’ so take them up on this!
- Build your support network! As well as your accountant you need a lot of help in these critical first years from other professionals. Consider:
- Bank relationship manager – developing a good relationship with your chosen bank is very important
- Commercial solicitor – they can write your ‘T’s & C’s’, draft a shareholders agreement and take action against customers who don’t pay
- Engaging a website and IT professional to develop the website and kit you need
- Business coach – if your accountant is not forthcoming with the business advice then consider engaging a business coach to support your business
- Use your time profitably – don’t get bogged down with less important tasks that you could delegate to others or outsource. Consider where your strengths and weaknesses lie and play to those.
- Market your business effectively taking advice from sales professionals if required. Keep marketing even if you are busy as you will need work when you aren’t!
The ‘don’ts’ are generally the opposite of the ‘do’s’:
- Throw your limited cash at overblown websites or marketing strategies; consider what you need as opposed to what you would like to have
- Forget to keep all your receipts; as they will reduce your tax bill, they are like money!
- Spread yourself too thin on many different projects; concentrate on where your business can make the most difference
- ‘Leave me this way, I can’t survive…’ Apologies, I was lapsing into the Communards there for a moment…
This is a vital area for new business owners but a really good chance to put your business on a secure footing to enable it to take off during the ‘growth’ stage. I have written a booklet for newer businesses and if you would like a copy, drop me an e-mail.
Should you have any queries on this, any other issues relating to your business or how I can work with you as a ‘Virtual FD’ , please don’t hesitate to get in touch.
I move on to the ‘growth’ stage what are the pitfalls and opportunities?
Until next time…
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