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The potential offered by cloud-based accounting systems

October 07, 2014 by Guest contributor

The potential offered by cloud-based accounting systems{{}}Many new businesses use Excel spreadsheets to keep financial records when they start up. And while the familiarity, ease of use and affordability of this is understandable, as small businesses grow, by launching new products, opening at other locations or otherwise expanding their geographical reach, their accounting function must become much more complex.

Using disparate solutions across different sites can make consolidating annual accounts a challenging process. Likewise, for businesses that export overseas or import, multi-currency invoicing and transactions adds another layer of complexity.

To help them grow, businesses need accounting functions that can deal with growth. Additionally, the ability to create additional reports that provide up-to-date financials and that integrate with other internal systems and software is vital.

Fortunately, cloud-based (ie online) accounting systems can help businesses to overcome the constraints of spreadsheets, to become proactive rather than reactive and ponderous. And such systems can be very easy to implement.

The cloud allows SMEs to become more efficient. The most effective cloud-based solutions automate processes, remove time-intensive and unnecessary data duplication and close the gap between input and output. Reports comparing “actuals” (ie actual earnings and expenses rather than projections), budgets and forecasts can be created in minutes and accessed anytime, anywhere by various staff members. 

Security and regulation can be more easily managed using cloud-based systems and the chances of human error become less likely. Technology will undoubtedly continue to be one of the key growth drivers for SMEs in the next decade. Therefore perhaps it’s time for businesses to move on from spreadsheets to realise the potential offered by cloud-based accounting solutions.

Barbara is managing director of online accounting provider Twinfield, part of the Wolters Kluwer tax and accounting division.

Copyright © 2014 Wolters Kluwer (UK) Limited

Further reading

Small teams require big leaders

October 06, 2014 by Guest contributor

Small teams require big leaders {{}}When we started out four years ago, leading a team wasn’t a consideration. We were a small family unit and did everything ourselves. We dreamt big but back then we couldn’t have known how things would evolve.

As our company grew, it became apparent that we had to employ staff. This was uncharted territory; now we had to become managers and leaders if we wanted to grow. Our skills had been more than adequate up to this point but we now needed an upgrade. I suspect many small firms find themselves in the same situation, when it’s crucial to embrace the next step – it’s make or break.

If you’re happy to stay small and have no real interest in growing – that’s fine. But if you want to get to the next level you must learn how to delegate and manage people. We decided it would be a good idea to hire a business coach. There’s no shame in admitting you don’t know it all and we felt some guidance would surely benefit our business. Here are some points worth considering:

  1. Even if you’re not a born leader, it’s something you can improve with effort and education. When it comes to motivating and managing people, there are many approaches, but none of us wanted to be dictatorial or autocratic.  
  2. If you’ve ever been employed you will have had a lesson in management, whether you realised it or not. What was your manager like? Did they get the best out of you? Did you feel valued? Were you listened to? Many people leave their boss and not their job. Sometimes a harsh experience can teach you how it shouldn’t be done. 
  3. If you respect your boss and you love your job you’re more likely to stick around and add value to the business. Working for someone whose attitude is “my way, or the highway” is very frustrating, counterproductive and bad for morale. Do you really need to improve your leadership skills? If you care about keeping your staff happy, you should care.
  4. A member of your team is an asset – so treat them like one. Listening and communication is key. Most people don’t listen intending to understand; they listen to reply. Let your employee speak without interruption and carefully consider what they’ve said.
  5. Set realistic goals and help your employees succeed in achieving them. Delegate and empower your people to make decisions, let them know they are trusted to do so. 
  6. Management is a skill and can be improved and polished like any other. Strive to learn from your mistakes and aim to improve. Just like anyone, you’re fallible. So rather than try to deny your errors, turn them into valuable lessons.
  7. Praise is very important – but not praise for praise’s sake – it must be earned. If you shower someone with praise at every turn they could become complacent and start to think that their performance will be ‘good enough’. You must keep your employees on their toes and let them know if they’ve fallen short of agreed goals. 
  8. Knowing something to be true is one thing; putting it into practice is another. So, constantly review your own performance and strive to improve. A happy, fulfilled employee is good for business and what’s good for business is ultimately what will make you succeed.

Copyright © 2014 Sam Frith. Sam Frith is the creative director of Ski Boutique, an “international agency offering luxurious and bespoke holidays in Europe’s most breathtaking alpine destinations”.

Further reading

Six top tips for making your home-based business a success

October 01, 2014 by Guest contributor

Six top tips for making your home–based business a success{{}}1 Get the important things done first

By setting a timetable for your working week. It doesn’t have to be the same routine every week, but plan the following week’s schedule so that personal and business commitments are separated and you allow sufficient, uninterrupted working hours each day. This ensures that when meetings are arranged, professionally or socially, you won’t let anyone down. More importantly, it also means that you can relax, knowing you have an effective schedule, can take proper breaks and end your working day at a reasonable time. If you live with a partner or family scheduling is particularly important if you are to maintain a balance between your personal and work lives.

2 Create a separate workspace where possible

Working from home often means having to consider others, but your schedule won’t remain intact if you have kids demanding your attention or housemates bringing home friends and walking into your workspace. If possible, your workspace should be in a quiet part of the house. A sign on the door letting people know if you can be interrupted is also useful. At the very least have somewhere to shut away your work things at the end of the day. Packing up is an excellent way of signalling to yourself and others that your working day is over.

3 Have at least three external meetings each week

Building meetings outside of your home into your working week means you actually get out and speak to people. It also means that you are engaged in building your professional network and promoting your business. A great way to do this is to use a co-working space. These are open-plan, shared workspaces where you can hire a desk by the day or half day. They often have social cafeterias and business events that you can attend to learn new things and make new connections.

4 Make sure you love what you do

This might sound obvious, but you have to really love something about your business if you are to get through more demanding days. Whether it’s being your own boss, loving what you make or the service you deliver, or simply engaging with people to promote and sell your product or service. The more you like something the better you tend to be at it. And it makes the things you don’t like easier to tolerate.

5 Deactivate notifications on mobile devices when you’re not working

It’s tempting to have every work-related email and social network app notification pinging just in case you miss something really important, but whether you’re in working hours or not, this can be incredibly distracting, diverting your attention away from your well-planned day or critical objectives. If your business does not need you to be available 24/7, turn off the automatic notifications on your devices out of working hours.

6 Find yourself a mentor

A good mentor can help you succeed. They’re usually someone who has been in business, having started from exactly your position; someone who has overcome similar challenges. They may have specialist knowledge or networks you can tap into and will ask you questions to test your thinking. It’s good to be challenged in this way. A good mentor will help you see things from an external, impartial perspective, which can be incredibly valuable when you’re working from home, mostly by yourself. Equally important, a good business mentor also brings compassion and empathy and cares about your long-term success.

Copyright © 2014 Zoe Brown. Zoe Brown is a business manager at Bright Ideas Trust, a charity that helps young people in London who aren’t in employment, education or training or “who haven’t had the same chances as the rest of society to start their own companies and learn business skills that will stay with them for life”.

Further reading

Three reasons why you don't have a million pound business

September 29, 2014 by Guest contributor

Three reasons why you don't have a million pound business{{}}

Would you like your business to reach £1m turnover? Most business owners would answer yes, but 96% of them will fail. Only 4% of businesses reach £1m turnover.

Why so few? Well, it has a lot to do with how you started the business and what pillars you have in place to allow you to reach that level.

Having worked with hundreds of businesses over the past few years, I have discovered that there are some striking differences between the ‘micro’ business owner and the owner of a £1m enterprise:

1 Qualification

Starting a business requires no formal education or qualification. The process of going online and registering a new company is easy.

This ‘low bar’ to start also means that most people assume that what they know is likely to be enough. They then spend the entire first year bravely finding their footing and ‘learning to walk’.

The skills they develop at this early stage will influence their ability to break through the £1m mark later on.

2 The "complexity ceiling"

Most businesses hit a ceiling because the way they began means further improvement and growth is too complex for them to handle and pursue.

Effectively, the business becomes trapped in what is sometimes called the ‘Hindu Rate of Growth’ – an average growth rate of around 3% each year – just enough to keep pace with inflation.

To break through this ceiling, new systems need to be employed to allow for growth to happen, while at the same time managing the increasing complexity of the business. What allowed many entrepreneurs to run a successful small business simply cannot support larger, more complex teams and issues.

It is at times like this that it helps to have an outside party shine fresh light on your business processes.

3 The language of numbers

Every entrepreneur – ideally at the start-up stage – needs to become fluent in the language of business. This language is all about numbers; profit, sales, cashflow, receivables, assets, equity, ROI, average value sale, conversion rate – these are all numbers that the professional business person not just understands, but is also able to leverage for every business decision they make.

In marketing, sales, team management and leadership there are key metrics to measure, estimate and average to evaluate and justify decisions that will lead to sustainable growth.

If you want your business to break through the £1m threshold, review your techniques and decision-making processes now. Don’t wait until you hit the ceiling and get stuck.

Copyright © 2014 Shweta Jhajharia. Shweta is principal coach and founder of The London Coaching Group, which you can follow on Twitter.

Further reading

Are entrepreneurs born or made?

September 22, 2014 by Marc Duke

Are entrepreneurs born or made?{{}}I’ve often wondered whether you are born an entrepreneur or whether you can you be made into one?

Entrepreneurs see things differently. They’re happy to stick to their guns when everyone else tells them they’re wrong. They’re prepared to go it alone. Often they can spot a gap in the market that others don’t see. They’re also prepared to put in a lot of extremely hard work and cope with failure, however hard that might be.

Recently I’ve started working with a brilliant organisation called Founders4School. Its mission is to inspire the next generation of entrepreneurs in the UK. It sends founders or entrepreneurs to visit schools at no charge to talk to the pupils about their experiences, thereby giving pupils an insight into what being an entrepreneur is all about and making it a career option to consider.

I’ve had the privilege of visiting both of my old secondary schools, accompanied by some highly inspirational entrepreneurs. The format for the event is a brief overview of the entrepreneurs’ experience along with the lessons to be learnt and advice to be shared. After that the floor is open for the pupils to ask questions.

Here are some quotes from the entrepreneurs that might help you decide on the entrepreneurial nature v nurture debate:

  • “When I was seven my dad lost his job and I used to help with selling door to door. I learnt that if you provide people with a quality product, they’ll buy from you again.”
  • “I did loads of different jobs, but never felt fulfilled. In fact, I felt positively unfulfilled, so I wanted to do something that made a difference.”
  • “I watched this film and thought – I’d love to set up a business that does this.”
  • “I’d followed a traditional path – university, graduate job, then hit a brick wall and thought I want to do something else.”

Just as insightful were some of the questions asked by pupils aged 11 and 12, including:

  • “How do you get your first customer?”
  • “I’m thinking about starting a business, but have no idea what to do?”
  • “My grades were not as great as I thought. I think I’ll become an entrepreneur.”
  • “When did you know you were going to start your own business?”

What I’ve learnt is that some people are born entrepreneurs. It’s a calling: they can’t see themselves working for someone else, climbing up the corporate ladder. While there are others who get to a point, having followed a logical career path, where they would like to do something they’ve always dreamed of doing and are brave enough to take the plunge. How many people chose this path following a redundancy?

The question is what skills do you need? All of the entrepreneurs had a solid degree and it’s a given that numeracy and literacy are essential, but as for the softer people skills, I guess it’s the University of Life where those are gained. One thing is certain, though, entrepreneurship is as valid a career choice as any other and the UK is a great place to build a start-up business and support entrepreneurs.

Copyright © 2014 Marc Duke, marketing consultant and founder of Marc Duke Consulting.

Further reading

Should SMEs look to alternative crowdfunding?

September 16, 2014 by Guest contributor

Should SMEs look to alternative crowdfunding?{{}}

2014 has been heralded as the year for crowdfunding. There are literally hundreds of platforms for people to choose from, but with share-based crowdfunding on the rise, consumers and small businesses are faced with a difficult choice.

Traditional crowdfunding platforms have huge user bases, tailored for product-based start-ups, which means that if you are lucky enough to make it onto the ‘Popular’ feed, your business idea will be viewed by millions. If, on the other hand, you don’t instantly capture the imagination of would-be investors, your chances of getting funded through these types of crowdfunding sites tends to decrease significantly.

While traditional crowdfunding platforms with product-based models might be good for getting consumer-focused propositions backed, they are less effective when it comes to B2B companies, which may have products and services that are less appealing to the traditional crowdfunding investor.

Don’t give your money away

The biggest issue with well-established crowdfunding sites is the high commission demanded – typically between 5% and 10%. Bootstrapped start-ups need all the financial help they can get and this is one of the many reasons we and other small businesses are increasingly choosing to go it alone with DIY crowdfunding.

Know your investors

One of the greatest benefits of DIY crowdfunding is the information businesses receive about their backers. Where traditional crowdfunding focuses on getting the money through the door, you won’t know necessarily why or where your product adds value to those people.

By setting up your own crowdfunding site or even by looking for VC funding, that market research data is more readily accessible. Moreover, it enables the business to constantly better itself and innovate based on feedback from the customer, business or angel.

When success also means disaster

One of the biggest problems with most crowdfunding platforms that have recently been damaging start-up businesses is being over-funded. Although some of the most recently built sites such as CrowdCube are able to trade in shares, traditional product-based crowdfunding platforms do not. This means that businesses opt to give something else away in return for investment – usually the product itself.

This isn’t often an issue for most businesses because the funding provides the opportunity to scale production. However, when campaigns are grossly over-funded, this can cause problems with meeting the demand for products in exchange for funding, rather than focusing on ‘paying’ clients.

Examples of this can be found all over traditional crowdfunding platforms and can cause massive delays for the business. While some may view this as a justifiable sacrifice, there are risks involved with this that can impact on the successfulness of the business’ future. You can spend so long fulfilling those owed orders that you’ll never have time to fulfil any new ones.

If not broken, breaking?

The huge user bases of popular crowdfunding platforms still make them a very attractive option. That said, as fewer start-ups are willing to give up such a large percentage of their funding in commission it isn’t difficult to see a future in which start-ups primarily use their own platforms for serious funding.

In-house developers within tech start-ups make creating self-funding platforms a realistic proposition, particularly if it provides flexibility and information as well as funding. These DIY crowdfunding platforms also provide the consumer with a much more interesting investment opportunity: not only being able to buy the product, but also buy shares in it.

Perhaps the product-based crowdfunding model isn’t broken just yet, but with more and more small businesses creating self-funding platforms, to crowdsource more serious investment, it can certainly be argued that the writing may be on the wall – especially in the B2B space.

Copyright © 2014 Tim Fouracre. Tim Fouracre is CEO of Clear Books. Clear Books is currently raising £3.3M, which will be the largest ever B2B crowdfund in the UK.

Further reading

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