A client of mine was thinking about starting a business, and asked me how big an overdraft she needed to ask her bank for. After talking through her plans, we agreed that the overdraft was a safety net, not a requirement and that, ideally, she ought not to make arrangements to borrow money she didn’t need.

I have been very lucky to work with a number of entrepreneurs and business owners. If I had to identify a common characteristic, it is a simple determination to succeed. Not necessarily financially, but in getting their product, service, or message, out there. It never seems to matter how much they have in the bank, their passion to succeed leads them to find innovative and often unusual ways to achieve their goals.

Passion really is a form of currency. To illustrate this, I can remember presenting to a bank for a significant loan to support a business. On paper, the business was in trouble. It was losing money, it was losing good staff, and it had issues with its governance. What it did have was a charismatic leader who conveyed a tangible sense of passion to succeed. Failure simply wasn’t an option. The bank was convinced, and the loan was granted.

If passion is a form of currency, then starting with little cash is no bar to success. The ideal combination is a sound business plan, presented with passion.

Nothing succeeds like a budgie with no teeth.

I have had a few meetings recently with people looking to start a business. Some of the businesses were start-ups, some were buy-outs.

As a freelance FD, I was asked if the idea stood a chance of succeeding financially.

What we very quickly got down to was not CAN they make a success of the idea, but do they WANT to make a success of the idea.

Without the will to succeed, it’s very unlikely you will succeed.

With a determination to succeed, even average ideas stand a good chance of making money.

We have much to thank Donald Rumsfeld for. Although mocked for his listing of “what he knew he knew”, “what he knew he didn’t know”, etc, this analysis of your situation can often distinguish perception from reality.

Compiling a list of things that you know you know about your business might seem like a waste of time, but put it beside a list of things you don’t know about your business, and you might surprise yourself just how many things you suspect, but aren’t sure about.

If you aren’t sure about it, then you don’t know it.

And then ask yourself, what are you doing to find out?

Great question raised this morning at the Birmingham Social Media Cafe – “Do you value your time?”

It sparked an interesting debate about the perceived value of your time. Do you give it away freely? Do you calculate free-time in terms of lost opportunity? Is your time worth more or less to you than to your clients?

In a service sector, time is what I sell. If I am not charging for it then by default I am giving it away. How much can I afford to give away before I start to devalue it?

As ever, it’s a compromise. I need to give a bit away to “show what I’m selling”. The time that I choose to invest in networking needs to have some ROI.

I was reminded today that time spent with some people is priceless.

Spent a great afternoon today on a panel presenting to a group of aspiring film makers. I am always inspired by those who have creativity running through their veins. Something about art being the object of their day’s work, not the pursuit of profit.

My input was to help improve the participant’s business skills. Also on the panel were four (yes, four) lawyers.

Art is good, sustainable art is better; be led by your work, not by the corporate structure.

Thanks to The Producers Forum for organising a great session. http://www.producersforum.org.uk/about.asp

financial business support
Just had a really interesting chat about accounts packages (no, really!). It boiled down to compromise. There are a number of “must have’s”, including basic transaction recording, simple reporting for statutory purposes, and more complex reporting for management.

Unless you have £20,000 to spend, its unlikely you will get everything you need from a single piece of software. So how much functionality do you require your accounts system to have, and how much do you export to excel?

On one level, you spend as much as you can in order to get as much out of your accounts as possible, using excel to tidy up the presentation. On the other hand, you can get a simple accounts system that copes with the basic transactions (reconciling actual activity to the bank for example), and export key figures to excel to provide all your management information.

Both are compromises, but I suspect the latter could cost a fraction of the former. Its worth thinking about, and could save you a lot of money…

Financial Business Support
Many years ago I interviewed a bunch of characters for the post of Nightclub Manager. Failing to make a decision, the panel asked itself the following question, “If the interviewee was a nightclub, would I go to it?”. Suddenly the choice became easy.

It is very easy to forget the impact that the person has on the identity of the business. Every employee, from security on the front desk to the chair of the board, adds a key ingredient to your brand. In times of apparent doom and gloom, what kind of impression do you give the outside world?

A visitor to your business, whether by phone or in person, may well learn more about your company from the first point of contact in the first few minutes than in the whole of the meeting you have carefully planned.

Recession. What is it? What does it mean? And most importantly, what does it mean to you?

The sales are in full swing, parties are loud and late, cars are travelling far and wide. Some days it feels like there are two worlds, the one we live in and the one we read about.

Losing a job is not fun – I know from personal experience – but take this out of the equation, and what else is happening? Food prices are down, fuel is just 86p a litre, variable mortgage rates are at an all time low. The spectre of recession might be based on little more than a perceived worsening of our world.

Perhaps the biggest thing we have to fear, is fear itself.

Another subject that is covered by a thousand books, prompted by a business running an on-line shop selling stylish products for the home and garden.

Assume a marketing spend of £1,000, how much of this should they spend on getting past customers to come back, and how much on finding new customers?

My view was a split of about 20:80, with the majority of spend on finding new customers. The type of products on sale are not daily purchases (think Christmas, birthdays and special occasions), so customers may come back, but maybe only twice or three times a year tops. To me, the key to driving revenue up is to find new customers.

How do you allocate your marketing and advertising spend?

Books have been written about this, but in response to a request, here is my “back of a matchbox” analysis.

Non-executive Officers usually sit on a board, to agree and monitor the strategic plans of an organisation. Executive Officers are responsible for the day to day activity of the organisation.

Those who serve on the board, and are involved in making strategic decisions, have corporate responsibility. It is essential that these folk know who they are, and their legal obligations.

If you have a sound bite you can add to help with this, please comment!