Abby Goode of Sage One
For some years, Sage has been speaking to SMEs to find out what key challenges they faced when setting up as well as asking what the key challenges were once they were up and running. We used the feedback to develop Sage One, our online accounting service for small businesses.
We travelled all over the country to visit small-business owners, as well as attending many networking events to speak to even more of them (and their accountants).
We set out (from a product development point of view) to establish how they manage their business accounts and their business in general; whether they have staff and how they pay them; how they manage the sales and purchase invoice process, etc. It was great speaking to so many businesses and really getting a feel for what they wanted from their business software.
A common charge that emerged from our discussions with owner-managers was a perceived general lack of support from the banks. In fact, we found that small businesses are reluctant to use banks for lending and will often seek alternative sources of funding. This is worrying, what with the current economic climate and with so many easy-access, high-interest, high-risk lending companies appearing. The banks should be helping small businesses – not working against them.
Through attending events, we also met a number of bank employees. They informed us that the process of lending money was changing from a local decision-making process to a national one. Where has the relationship with your bank gone?
Keep a close eye on your cashflow. Knowing how your business is performing is crucial – especially if you need to apply for a loan.
Become familiar with the reports future investors will want to see. A profit and loss report and a balance sheet report will show how your business is performing and help you to work out its current value. Sage One Accounts allows you to produce these reports without having an understanding of accounting or having to manually calculate the figures.
Talk to your customers, too. Find out what they want from your products and services. Can you augment them or add value by offering a bespoke service, for example?
It seems obvious, but chasing outstanding payments is key to maintaining healthy cashflow. Similarly, you don’t want to get on the wrong side of your suppliers, so stick to the agreed payment terms.