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Don’t put the cart before the horse when business planning

As shown by previous blog posts, every now and again I like to visit the business forum pages and see what queries entrepreneurs are posing to the community there.

 

Some of the most interesting ones are about marketing, as they nearly always give excellent advice.

 

This is the case with one story I’ve been following.

 

It’s a software firm offering bespoke accounting software. By the sounds of it, they build the software you need from the ground up based on exactly what you need from it.

 

Apparently this normally costs thousands as a one-off payment, but this firm allow clients to subscribe for a more reasonable fee.

 

The reason they’re posting on the forum is because even though they already have a couple of clients signed up, they have numerous visitors to their website who aren’t translating into customers.

 

All the responses from the community about why this may be so make a lot of sense.

 

  • Work out who needs your product, and who their influencers are.
  • Develop a unique selling point; what makes your software different?
  • As usual, sell the benefits not the features. The seller is very proud of their work and wants to show what it can do, but not seeing things from a customer’s point of view.
  • On the website, say what the product is right away to eliminate confusion.
  • Explain what the different options for a customer needing accounting software would be – and how choosing your option is best.

 

To be fair, this advice could be taken on by almost any entrepreneur or start up.

 

At least three of the points should come under your Business Plan, which you should create right at the beginning of your venture.

 

So even if you have a great product, you shouldn’t put the cart before the horse and hope it finds its target market all by itself.

 

But you will need more information that those five points.

 

Find out what they are here:

 

https://www.madenotborn.com/starting-your-own-business/

 

David

Financial issues that keep you awake No.4 – Not knowing how your business is performing

According to KPMG Small Business Accounting’s recent survey, the 4th most common financial issue that affects the sleep patterns of business owners is not having an up-to-date picture of business performance.

 

Luckily, this seems to be a problem that a lot of the business leaders have been proactive in trying to resolve.

 

2.6% of the 250 respondents said it was a current concern they hadn’t addressed yet.

 

However, 22.6% had it down as a concern that they were actively trying to resolve, and 24.1% said it used to be a concern that is now resolved.

 

Ultimately, even though not knowing the current state of your business’s performance is a big problem experienced by many, it is an issue that seems quite easy to address.

 

The worry would come from either sitting at home, or up in bed, not knowing what the exact income from your day’s trading was.

 

Even worse, you may not know what your outgoings were.

 

If you’re absolutely convinced you’re not breaking even, or if there’s a nagging doubt at the back of your mind, then you’d struggle to sleep.

 

You could of course call your accountant, but that’d have to wait ‘til morning. It doesn’t help your cause at that exact moment in time.

 

Which is why the remedy for this problem is, as the report states; “Deploying technology”.

 

Namely, the technology is cloud-based accounting software so you can access your business accounts at any time.

 

“Lack of up to date management info [was a concern]. Switched to cloud-based system; was very successful.”

 

And;

 

“Using a programme like Xero has been very successful.”

 

In fact, bringing in cloud-based accounting was the most effective remedy overall, with more than half (54.5%) of respondents deeming it to have been “extremely” successful – with a further 24.1% stating that it has been “quite” successful.

 

The statistics speak for themselves.

 

If you need it too, you can find a list of recommended accounting software programs in our Guide to Accounts for Small Businesses here:

 

https://www.madenotborn.com/courses-money/

 

David

Financial issues that keep you awake No.5 – Finding funding

Today we’re continuing our countdown of the financial concerns that affect business owners’ sleep patterns.

 

The data comes from KPMG Small Business Accounting, who interviewed 250 business leaders to see what keeps them awake at night.

 

Today’s concern, at number 5 on the list, is raising finance for growth or expansion.

 

14.2% of respondents earmarked this as a current concern they’d not addressed yet.

 

21.3% said they were working to resolve this problem.

 

13.5% said it was a previous concern that’d they’d now resolved.

 

That’s 49.1% of business leaders who felt a lack of finance for growth was causing them to lose sleep.

 

It could be that finding sources of finance is something that may be traditionally outside of the remit of a hired accountant, leaving the business owners to worry about it themselves.

 

Other issues on the KPMG list were considered less problematic, such as filing tax returns on time and correctly.

 

This would be because the business owners knew their accountants were prioritising such tasks, so it was all in hand.

 

However, it seems that simply asking your accountant to help out with finding funding could be a way to alleviate those concerns.

 

68.0% of respondents found this to be successful. And, if your accountant can’t help you out, maybe it’s time to find one who can.

 

This is backed up by the 76.0% approval rate from those who changed their accountant.

 

The other successful tactic was to move to cloud-based accounting, which is unlikely to be applicable to this particular problem.

 

A good accountant should be able to check your financial forecasts so you have the best possible chance of receiving funding.

 

They can make sure your business plan and forecasts are tight and realistic, which will be advantageous when applying for a loan from a bank or a government grant.

 

They should also know what other types of funding you may be eligible for due to their experience within the accounting profession.

 

Overall, knowing that someone can make your business look as attractive as possible to potential investors should reduce most of the worries you have about the issue.

 

Find an accountant to help you out right here:

 

https://www.madenotborn.com/accountancy/

 

David

6 free tips for business accounting

Blatant plug today.

We’ve updated our website to include our brand new courses, starting with the Guide to Accounts for Small Businesses.

It’s packed full of useful info so you can keep your finances nice and tight:

 

  • How to calculate your break-even point
  • Calculate a cash flow forecast
  • Calculate a profit and loss forecast
  • Calculate a balance sheet
  • Recommended accounting software
  • Managing your cash flow

 

AND it comes bundled with ready-made Excel spreadsheets for each of the financial forecasts, so you won’t even have to work anything out yourself.

Yours for £9.99 so it’s more than worth it.

BUT if I was you, I’d download our free six tips for accounting first just so you really get your money’s worth. Here it is:

https://www.madenotborn.com/guide-to-accounts/

David

#Startup motivationals don’t #help

It’s a new month. The first day of Spring?

 

Doesn’t feel like it yet – as proven by the frost on my car windscreen that needed clearing before I came to work this morning.

 

Twitter seems to think so though, with the #FirstDayOfSpring hashtag trending good and proper all day long.

 

Out of interest, I decided to search for a hashtag that relates to our line of work.

 

#StartUp. After a few seconds looking at the top results there’s very little there that’s actually helpful for anyone wanting to start a new business.

 

It’s just a load of motivationals – cheesy, clichéd pictures with some quote about bettering yourself. Like this:

 

“Today you are you, that is truer than true. There is no-one alive who is youer than you.”

 

What does that even mean? Why does it relate to business start-ups?

 

“Youer”. That’s Dr Seuss isn’t it?

 

Here’s another:

 

“Falling down is how we grow. Staying down is how we die.” With a picture of Russell Crowe in Gladiator next to it.

 

Great! But how do I work out my tax return? Probably won’t feel like growing when saddled with a big fat tax bill due to not having any actual advice available.

 

One more:

 

“Memories take us back. Dreams take us forward.” Retweeted 124 times.

 

Are people into this? Are actual entrepreneurs sitting there thinking “yeah man, so true!”

 

Doubt it.

 

If you want genuine help with your #StartUp forget the motivationals and have a look here:

 

http://www.madenotborn.com/starting-your-own-business/

 

David

A taxing situation

A friend of mine unfortunately got a tax bill of £6,000 recently. Ouch.

 

He wasn’t expecting it.  HMRC sent him this little surprise in addition to his usual income tax from his steady job, so he thought he was all square with them.

 

However, it turned out it was because of a second property he owns.

 

Even though he’d declared the income he gets from it, such as the rent from his lodger, he hadn’t declared any expenses.

 

HMRC wrongly thought he was simply coining it in and needed cutting down to size, so to speak.

 

Even though HMRC should issue a refund once the right self-assessment figures are in, I think that for a new business that would be crippling.

 

You could easily end up using any spare cash in your business to pay off your (incorrect) tax bill, leaving nothing left for the day-to-day running of your company until the refund comes through.

 

Which could take a while, if you’re especially unlucky.

 

Getting a self-assessment tax return wrong is easily done, but annoying to fix. Even if you get your money back nice and quickly, there’s still the hassle of re-calculating your taxes and calling up HMRC to chase it up.

 

Hassle you can do without when you’re trying to run a business.

 

The easiest thing to do is get it right first time – either yourself, or by getting an accountant to do it for you.

 

We have both solutions covered right here:

 

http://www.madenotborn.com/accountancy/

 

David

Don’t let your business get blown away

So Storm Doris came and went.

 

Luckily, we didn’t see too much devastation where we are but she’s caused havoc elsewhere in the country.

 

One thing I noticed was the blanket coverage from the media about the storm, even before it hit.

 

Up to a day before it was due to start, airports had cancelled flights and Network Rail were warning of delays and cancellations.

 

The Met Office issued two amber warnings for snow in Scotland and Northumberland, and one for winds of up to 80mph in the Midlands and Wales.

 

Overall, it seemed they were pretty sure the thing was coming, and made sure everyone knew.

 

The blanket coverage from news outlets could of course be attributed to the need for 24-hour news, so anything newsworthy is recycled and reported ad-infinitum until the next headline comes along – but that’s another story.

 

It had me thinking that it couldn’t be more different to that most infamous of Met Office gaffes, the Great Storm of 1987.

 

“Earlier on today, apparently, a woman rang the BBC and said she heard there was a hurricane on the way; well, if you’re watching, don’t worry, there isn’t, but having said that, actually, the weather will become very windy, but most of the strong winds, incidentally, will be down over Spain and across into France” said Michael Fish, who often takes the flack for the non-prediction of the storm.

 

Although it sounds like he may have been misquoted, and just giving information the behind-the-scenes meteorologists had told him.

 

Still, the forecasts said the strong winds wouldn’t make it further North than the English Channel when ultimately it caused £2billion worth of damage.

 

This led to widespread criticism of the Met Office, who had failed to plan ahead through inadequate equipment and under-funding.

 

Several reforms then took place including refinement to their computer software, the training of meteorologists, and the way weather warnings were issued.

 

Where am I going with this?

 

Oh yes… don’t let the same happen with your business.

 

It’s an extreme example, but shows how important planning can be.

 

In a business, this applies to everything you’ll do – from the start-up stage, to accounting and marketing.

 

Make sure you’ve taken every eventuality into consideration, and know how to react if they happen.

 

Don’t let your business get blown away.

 

http://www.madenotborn.com/starting-your-own-business/

 

David

Pretty vacant – what to do with empty business premises?

Following on from my visit to the forums of a business website yesterday, I’ve come across another question posed to the masses…

 

“I have a commercial property that will soon become vacant.

 

“I’ve been renting it out for the last few years, but before going down that road again I’m racking my brains trying to think if I could utilise the space with a business of my own.

 

“So far I’m thinking of splitting it up into self-storage units as a possibility… I would just need to know the building regulations and where to go for the fitting side of things.”

 

Sounds like a good idea, but there could be a few more factors to take into consideration:

 

Location size – a few folks on the thread aren’t convinced that the property is big enough.

 

Competitors – how many other self-storage businesses are in close proximity? Once again, other forum users think that the small size of the unit could count against it.

 

Transport links – what’s access like for vehicles? People are mostly going to be transporting their belongings in cars and vans.

 

Desirability of the area – might sound odd, but I’d consider the surrounding area when choosing a use for my property. Putting storage units in an area full of upmarket offices may be a missed opportunity, and not the first place potential customers would look for storage in the first place.

 

If the building is already configured for office use, would the cost of converting it to something else even be worthwhile?

 

Lots of things to consider.

 

We’ve addressed these kind of issues and loads more in Module 4 of the Made Not Born guide to starting your own business, which can be found here:

 

http://www.madenotborn.com/starting-your-own-business/

 

David

To patent, or not to patent?

I was scanning a well-known business forum earlier. It’s interesting seeing the ideas that people have, and the questions they pose to the business community when they need help.

 

One recent poster asked about the importance of patenting a prototype product they’d designed, as it seems expensive to do.

 

No-one took the time to reply, which seemed a bit of a shame.

 

A bit of research suggests it costs about £4,000 to patent an invention. I’d say if you truly believe in an idea and want to protect it from theft, then maybe it’s worth the cost.

 

Going into production and having someone rip off your idea would cost you a lot more than £4,000 in the long run, I’m sure.

 

Rather than patenting the product first, perhaps it would be better to conduct some market research and see whether the public want what you’re selling.

 

If the demand is there, then that £4,000 might just pay for itself in future.

 

They went on to ask whether they need a special licence to manufacture the product. That’s more difficult to answer, they don’t specify what the idea is.

 

Probably a bit of a Catch 22 situation there, they don’t want to give away the details of their non-patented product so I don’t blame them.

 

However, the bottom line is that protecting your intellectual property is a must if your business is going to be dependent on it.

 

Learn how in Module 3 of the Made Not Born guide to starting your own business, which can be found here:

 

http://www.madenotborn.com/starting-your-own-business/

 

David