Cashflow is the lifeblood of any organisation. Getting it wrong means that your business will fail, but getting it right at a time of economic uncertainty is a significant challenge.
Having a healthy cashflow is crucial for all companies, but can have a massive impact for start-ups. A new business can only survive for a short time with a negative cash flow, and ultimately the business will end up insolvent. Start-ups must adopt processes to help manage their cashflow from the moment they are set up.
Late payments are a significant problem for entrepreneurs to deal with. Half of the small businesses polled by Sage in its monthly Omnibus said they had been impacted by late payments over the last twelve months.
For start-ups waiting to improve their business cashflow, there are a number of steps to take, including:
Know where your money is – It sounds simple, but a lot of small businesses will fail because their owner doesn’t keep a close eye on the funds coming in and out of the business. That visibility is best achieved by maintaining regular updates on your cashflow forecasts.
Know your customers – Many businesses have a set date for paying invoices, learn when these are for your customers and record the date. If the date passes and you are yet to be paid, then there is a good chance that something is not right and you can follow up with your customer.
Set-up an online automated contingency plan – This will help you actively manage your cashflow. It is critical that start-ups remain aware of how much money they are owed and when payments are due, so that late payments do not occur in the first instance. However, if they do occur good management can ensure the late payment does not have a damaging effect on the overall cashflow. These are all aspects that business accounting software can help you get to grips with.
By implementing theses correct processes a start-up will be able to manage their financial planning effectively, forecast the year ahead and identify any potential cashflow issues. By following these guidelines and implementing the right software, businesses can make sure they remain strong and cash positive.
Brendan Flattery is the Managing Director of the Small Business Division at Sage UK and Ireland.
Think back to those heady, idealist days, before you started running your own business... What was your business meant to stand for? What would your being your own boss give you, which employment couldn’t?
Now honestly, look at how you are running your business? Are you truly in control, or is the tail wagging the dog?
From personal experience, and also my client’s experiences, some of the symptoms of your business running you (rather than the other way around) are:
Unfortunately, there is no easy one-size fits all solution – every business owner and business is different. Whilst one business owner may want a six figure income, another business owner may be happy with significantly less.
The first step in the process of taking back control of your business is to reconnect with your initial vision for your business and the lifestyle you wanted to lead as a business owner. What was it that so attracted you to business ownership? What was the aim of your business?
The second step is to identify where you have lost control and moved away from this vision, and in what aspects the business is now running you.
The third step is to start to allocate time in your working week to stepping away from the technician role and move into the entrepreneur and manager role. When I talk about technician, this is actually working in the business, doing the client work. The manager is the role where you put in systems and processes into the business, which help run your business more efficiently. Finally, the entrepreneur role allows you to lead your business and take the time to grow it as per your vision.
The fourth step is to plan how you want to run your business rather than letting momentum carry you along. Do you have to be in such a hurry or can world domination wait a little longer?
And then, finally, the last step is to implement the plans for your business.
It may sound simple, but in practice this process may be hard to complete.
Heather Townsend, The Efficiency Coach
Getting free publicity can be simple. In fact, the reason many businesses get it wrong is they try to overcomplicate things. Ever heard of KISS? It stands for ‘Keep It Simple Stupid’. No offence! It’s a phrase that could almost have been invented for PR (press or public relations). When trying to get free publicity, here are my five tips which I hope will prove useful:
1 Tailor your story to the audience
Journalists are focused on their audience. If the people for whom they are creating content want to know about a specific subject, that’s what they will write about. If you seek publicity for something else, they won’t be interested. You need to understand exactly what your target audience is interested in and make your story fit. Get that right and it becomes much easier to persuade journalists to write about you.
2 Be different
It’s the best way to capture a journalist’s attention. Your story must be packed with ‘standoutability’ (a made-up word that sums it up perfectly). Journalists get hundreds of press releases and story suggestions every day. If yours are the same as the rest, they’ll go the same way – in the bin.
3 Become an expert
If journalists recognise you as an expert in your field, they’ll turn to you first for comment, time and time again. And that means your customers will know you’re an expert, too. Incidentally, it doesn’t necessarily matter if you are a true expert; what matters more is who positions themselves that way first to journalists and their audience.
4 Make journalists’ jobs easier
Most press releases sent to journalists go straight in the bin (these days they simply hit the delete key, often without even opening an emailed release). Largely, it’s because the people who write them don’t understand what journalists are looking for. Once a journalist becomes interested in your business/story, make sure you give them what they ask for – information, quotes, photographs, etc – and do it quickly. You can lose media attention as quickly as you attracted it if you don’t make the journalist’s job as easy as you can.
5 Generate creative ideas for stories
If all you’ve got is a run-of-the-mill story, forget it – why would a journalist want to write about you? You’ve got to use your imagination. You must be creative and seek to generate stories that inspire and sustain interest. Find interesting angles where possible.
Journalists are desperate for great stories. This presents nothing but opportunity for you and your business. I look forward to reading about your business soon.
Personal branding is how you project yourself to the world, how you create and maintain your image and identity. Your brand is just as much about your profession, business and career as your background, what type of person you are, your interests and any interesting facts.
Personal branding is what you do, what you are and above all – what you can do for others. Having a meeting, making a phone call, sending an email are all activities where you get the opportunity to demonstrate your personal brand. Offline and online, you only get a few seconds to make a first impression, so you must get it right.
Do you need a personal brand?
You already have one. You need to make sure it projects what you want it to by staying consistent or – better still – continuous improvement. You must take control of your personal brand because it can help your business to get noticed. It will help you to be seen by current and prospective clients, business partners, employers and so forth. You want people to remember who you are and what you do.
People buy from people – not businesses. Unless you’re ordering a book online, you want to know the people behind the business. This is especially true in service and high-end sales environments, where customers only buy from credible sales people with strong brands. Blue chips are giving their managers personal branding training to turn them into better ambassadors for their employer. The trend is growing and personal branding will be part of everyone’s induction training one day.
Personal branding is extremely important to start-ups – possibly even more important. Customers buy from a few individuals – not really the business brand, which has to be developed over time anyway. Having people with strong personal brands working for a start-up basically means they lend their credibility to the business. Leveraging your employee’s personal brands is probably one of the most cost effective ways of marketing and promoting your business.
Where do you start?
If you want to boost your personal brand and get the maximum impact straight away, the Internet is the best place to start. It’s free and very simple to sign up for online networking sites, which are great tools for promoting your personal brand.
A typical professional will have a profile on Linkedin or Facebook, some will have lots of others. As long as you use and maintain your profile correctly, you’re on to a winner. Try Googling your name and see what happens. Prospective customers are likely to do this these days. Are you happy with what they will see? If you were a client, you would probably want to see a supplier with a professional profile on Linkedin and possibly other platforms.
If you can’t find yourself, you have a fair bit of work to do. You will also be cross-referenced on Facebook, Twitter, Myspace, blogs and other sites to see that you are not simply putting on a ‘corporate act’. Make sure the brand you project is consistent and well positioned.
What are the ‘must-haves’?
Having a professional looking, well-written Linkedin profile will benefit many start-up owners. You should also have well-rehearsed elevator pitch that you can deliver at any time. I’d also recommend an online bio you can link to, as well as ‘clean’ and searchable profiles on Facebook, Twitter, Flickr, YouTube and Google Profiles.
And the ‘nice to haves’?
Make sure you’re consistent with everything you communicate to the world. This includes everywhere you have an online presence. Consider whether prospective customers will be surprised or even disappointed when they meet you for the first time. You must be one and the same across all channels, then you will stand a better chance of coming across as genuine and trustworthy.
Share information about yourself, tell stories and inspire others. Add some personality to your brand – we all know it’s easier to sell on emotions than facts. When you think you are finished, anyone should be able to locate you online and find out what you do and what makes you special. If this isn’t the case – you need to put some more work in.
Jörgen Sundberg, Personal Branding UK
The Start Up Donut’s week-long celebration of mums who run businesses – mumpreneurs, kitchen table tycoons, business mums, businesswomen, call them what you will – is over for another year. What did we learn?
People don’t necessarily like to be labelled, so do we need a term to define this group? Is it necessary for people to know you’re a mum or is the fact you have children irrelevant?
The discussion surrounding the term ‘mumpreneur’ on our forum threw up some interesting opinions.
On the one hand, business women such as Laura Rigney are proud of the ‘mumpreneur’ tag. She said: “It takes an awful lot of determination and dedication to start a business from scratch and then continue running it while doing the everyday things that come with being a mother”.
Emily Cagle disagreed, saying: “The main issue for me is the irrelevant categorisation of a business owner (who happens to be female and a parent). People tend to mean well by using the term to recognise the challenges mums often face, but I think it's generally unhelpful.”
There will always be disagreements over such things, anyway, if Cara Sayer is right, the term 'mumprenenur' will undoubtedly go out of fashion”. Other terms, such as ‘kitchen table tycoon’, were also disliked, it must be said.
We also invited guest blog posts from business mums last week and it was interesting to see the common themes: the importance of being resourceful; effective time-management; the need for multi-tasking; the need to start up on a shoestring; remain flexible; and being adept at prioritisation of time and tasks.
The lessons learned when managing a family and various school runs, mealtimes, hobbies and bedtime routines can be very useful when running a business.
You can see from the case studies that we’ve featured on the site, such as April Browne who runs Crystal Jewels, that despite much competition for their time, many mums continue to be inspired to start a business, while for some, such as Claire Willis of SnugBaby, necessity is still the mother of invention and the basis for many new mum-owned enterprises.
At the end of the week, I asked an open question on Twitter aimed at all business mums: “What was your inspiration for starting your business?" These were just some of the replies:
These were broadly representative, with the vast majority related to having enough flexibility to look after children while still providing for the family. Starting a business seems to be the perfect solution for women who want to continue working but who also want to spend time with their children while they’re small.
On a personal level, it’s been really nice to be in touch with such a lovely group of people who’ve been so helpful and really got stuck in with the discussions.
I’d like to say a special thank you to our blog contributors and to everyone who retweeted, commented, said hello and helped to spread the word. Although Mother’s Day has been and gone, our support for mums running their own businesses will continue throughout the year.
Anna Kirby, BHP Information Solutions
Well, guess what. I have finally heard from the bank, after 3+ weeks. Inefficiency? Procrastination? Well, whatever it may be, the bank said no. At this point I could U-turn and get a job, a salary and pack it all in. But I KNOW there is something out there that will work, a stone that has been left unturned.
This is a hard knock on my fundraising effort. We have gone so far. Larger contracts have been placed and I can’t develop new products without the funding I was counting on. What next?
I spoke to my neighbour, a successful, experienced builder who is going through a difficult time at the moment. He said exactly the same thing. He needed bank support to make a new project a reality. The equity was there to secure the loan but the bank said they didn’t want to make him homeless- can you believe it? I’ve no words to explain my frustration.
I have been speaking with a couple of investors but they want to take their time and my time is now. How do I say “now”, not later? How?
I think you’ll agree with me that opting to run your own business means NOT settling for the easy option. There’s a huge degree of resilience required, which one needs to develop along the way to cope with the difficulties. As the bank said no to lending to the business, we moved on to (another!) personal loan.
Now it’s all about moving forward... due to a grant we got from the East Midlands Food and Drink iNet, we were able to have a PR agency work with us for a few months. This means we were able to write our first newsletter and we also sent loads of samples to magazines and newspapers. I've had my first interview with a glossy magazine which will hopefully mean that there will be more awareness for the products nationally. We’ve had interest from other national magazines, and a large food magazine is talking about writing a feature on us which would be fantastic.
You can find out more about Marcela on the new interactive business website www.inafishbowl.com