After all, it doesn’t take long at all for your company’s financial history to be filled with dozens upon dozens of mini transactions and recorded earnings. The sheer volume of figures and data that come across your screens every day is enough to make your head swim.
If you are feeling like you’re drowning when it comes to managing your company’s finances, we’re here to say that you’re not alone. Learning the ins and outs of financial management is a rite of passage for all entrepreneurs. Thankfully, this seemingly monolithic task can be broken down quite easily.
Here are just a few ways that you can organise your business finances and stay on top of your company’s financial performance with ease.
Alongside investing in business management software, opening a business bank account is hands down one of the single greatest things that you can do to set your enterprise up for success. This is because having a dedicated business bank account set up before making any sales can allow you to maintain a clearer picture of your company’s spending and earnings from the get-go.
As you may imagine, having this crucial piece of financial infrastructure in place can help greatly simplify virtually all aspects of your company’s financial management, from completing your break-even analysis to calculating your business deductions in the lead-up to tax time. Having a business transaction account can also be a valuable tool when it comes to making office supply purchases or even just keeping track of ad-hoc business expenses like Ubers or other unforeseen travel costs.
Separating your business banking from your banking can also provide the added benefit of further establishing your business as its entity that’s separate from you as an individual. When you open a business bank account, the account name will effectively be the same as your company name, which means that any invoices that your company sends out can be payable to itself rather than payable to you. In other words, having at least one dedicated business bank account set up for your business can make your business feel that much more concrete and legitimate in the eyes of your clients, staff, and stakeholders.
Now that you have all your business expenses and earnings filtering through to one business bank account (or multiple, depending on the size of your enterprise), it’s now time to set up your financial management processes. This refers to all the processes involved with evaluating your company’s recorded income and expenses and organising this information across hard-copy and/or digital files that pertain to individual financial quarters.
Maintaining this practice can help you pinpoint any excessive expenditure with greater certainty from quarter to quarter. For example, if you have suspicions that a particular department in your company is spending unnecessarily, you can review their expenses alongside those recorded by another department within a given fiscal quarter.
This practice can naturally also help streamline the process of filing your business tax returns come the end of every financial year. No longer will you have to waste time chasing down receipts so that you can back up a tax deduction. From here onwards, you should have everything you need thanks to the expense and income tracking processes that you’ve been able to put in place.
All seasoned business owners know that generating a consistent cash flow is one of the most challenging aspects of managing your own business – especially if you’re a smaller or medium-sized enterprise. If you do ever experience issues with your cash flow, then it’s highly likely that you may turn to financial lenders for a little bit of external support either for weathering the storm or for funding strategies for development or innovation.
And whilst business loans can provide a lifeline for your business during its earliest stages or at times of economic downturn, there are some undeniable dangers associated with taking out these financial liabilities. For starters, taking out a business loan will impact your company’s ratio of assets to liabilities for the duration of your loan repayment period. This can, in turn, affect your ability to attract any new investors or buyers, if you’re hoping to organise a company acquisition down the line.
If your company is experiencing ongoing issues with cash flow, there’s also no guarantee that you will be able to pay off your loans, which can in the worst-case scenario, result in your company going into liquidation. And we’re not just trying to fearmonger here. Financial management is all about maintaining a balance between your incoming and outgoing funds. So if the balance is skewed towards the latter side of that equation, then it’s probably best to avoid taking on any additional debt.
That brings us to our final point and one that most entrepreneurs will often find themselves grappling with when they’re on the verge of success: understanding the real costs of business growth. It can be so easy to become idealistic about funding the growth of your business, but the reality is that not all investments made for the sake of your company’s growth will be likely to yield a high return.
With that, it’s important not to put all your eggs into one basket, so to speak. In other words, don’t overinvest in one facet of your company’s growth potential. Keep your business growth strategising broad and multidimensional rather than hyperspecific. And this advice is doubly applicable to small businesses that are less likely to have the resources required to maintain an aggressive or proactive growth strategy.
And if you are wondering whether the cost of additional overheads or new staff factor in here as well, then you’ve hit the nail on the head. Whilst there is some value in the age-old adage that you ‘gotta spend money to make money’, you also want to make sure you have adequate financial resources to respond to other opportunities that may arise before your competitors do. Yes, it pays to be a baller, but the best ballers are those that are agile and ready to make moves when they need to.
As we’ve mentioned throughout this guide, financial management is all about balance. Learning how to look past the numbers and engage with the reality behind your company’s figures can help you maintain a healthy balance between your earnings and your outgoings. And it is this ability to maintain balance that will help your company grow organically, that will help you helm a larger enterprise as your billings grow in suit. That is without a doubt, the most sustainable way to transition from a startup entrepreneur to a bonafide CEO.
The Apprentice recently returned for a 14th series, as 16 entrepreneurs and impresarios battle it out to win a significant investment in their respective business ventures from Lord Alan Sugar.
Creditsafe analysed the key financial data of each contestant to identify which hopeful is the real winner when it comes to business success, with former ‘Young Entrepreneur of the Year’ and ‘Media Disrupter of the Year’ Jackie Fast coming out on top.
To rank the business acumen of this year’s Apprentice candidates, Creditsafe devised a scoring model that considered the profitability of companies they've worked at, their history as directors, a current ratio of their total business assets and current liabilities, their credit score, County Court Judgments against candidates and finally, their net worth.
Jackie started her first business, Slingshot Sponsorship, in her bedroom in 2010, with only a laptop and a budget of £2,000. Six years later the business had expanded into a number of international markets and boasted a client list that included Shell, Red Bull, Richard Branson and the Rolling Stones. She later sold the business in 2016 to the Marketing Group plc for millions, having grown the company’s net worth from £23,153 in 2013 to £243,239 in 2016.
Jackie also serves as a Non-Exec Board Director of the European Sponsorship Association, one of the youngest in the association’s 30-year history. Her latest business venture is REBEL Pi, a rare Canadian ice wine brand focused on the UK market. Now a public speaker and author, her first book ‘Pinpoint’ was published in 2017, exploring the effectiveness of sponsorship in driving business growth.
Creditsafe’s data also indicates that this year’s runner-up is Kayode Damali, a 26-year-old motivational speaker and former director of the National Union of Students (NUS), making him the only contestant to have worked in a business outside of the SME space. During his time at the NUS, Kayode was appointed as a director, with the organisation producing revenues in excess of £19 million.
David Walters, group data director at Creditsafe, said: “When compared to last year, it’s clear that the slate of contestants this time around have had significantly less board level experience prior to coming onto the show. It will be interesting to see whether experience really does pays off when the contestants battle it out to be crowned the winner of this year’s Apprentice.
“From our experience, the background and past success of business leaders is an important indicator of future success. Before entering into any partnership with a new company, it’s important to do due diligence on who you’ll be doing business with and how they have performed in the past. There’s no doubt Lord Sugar will be grilling the contestants and doing his own research to ensure he picks the right apprentice.”
In a surprising turn of events, foreign investors don’t seem to be put off by Brexit. In London over 99 financial projects were backed by overseas investment beating out the likes of Paris and Berlin, foreign entrepreneurs are actively seeking out the Entrepreneur Visas to come to the UK.
Globalisation: The next stage business
Expanding business holdings on an international is the move for the 21st century, whether it’s opening a foreign franchise or taking over an existing company, the exploration of a new country’s economy can put businesses ahead of competition.
The UK is currently attracting pioneering business women and men as one of the biggest investment hubs in the Western world, a great international pedigree, and a fantastic business time zone. With over a billion-pound worth of investment in the city of London over the past 12 months, it’s clear to see that over Brexit worries are not slowing down business opportunities,
There are many ways to enter the UK but for those looking to pursue a successful career and make the most of the UK economy an Entrepreneur, Visa will definitely be the best option. This visa defined as a ‘Tier-1’ is for prospective business people from outside the European Economic Area and Switzerland who are looking to either set up or run a business in the UK. For those looking to go to the Capital, an immigration lawyer in London would be able to guide through the steps for a successful application.
(Source: Immigration Advice Service)
Greg Cox is the CEO and co-founder of Quint Group – an award-winning FinTech company with headquarters in Macclesfield, Cheshire which also has operations in London, America, Poland, South Africa, China and Australia. Here Greg tells us more about the FinTech giant’s beginnings and triumphs, as well as his role in achieving all of this.
Tell us a bit more about your career path, prior to founding Quint Group - what attracted you to the financial technology sector?
After learning to code at 16, I worked in a range of businesses areas, some online, before focusing in the consumer finance industry. I’ve always had keen creative inclinations (both parents are designers) and an entrepreneurial approach which, when combined with a computing background, seemed to be a successful recipe for building a business like Quint.
How was the idea about Quint Group born?
I was a passive investor in a consumer finance business in 2006, which subsequently failed in the wake of the financial crisis in 2008. When the business failed, I was asked to investigate and summarise to other investors why the business was unsuccessful and what our options were. While completing this report I started to look at the market in detail and it became apparent to me that consumer finance was primarily delivered to customers over the phone and on paper, which seemed crazily outdated. I could not believe how far behind the consumer finance industry was in terms of online technology application - this realisation prompted me to start Quint. Upon launch in 2009, my aim was to build businesses in the consumer finance space that focused on online platforms and technology.
Despite your countless responsibilities, you are still involved with the day-to-day technology developments of the business - how do you ensure you are directing the company in the correct direction, form a technological point of view?
I have lots of talented people around me that are experts in tech and product delivery. Those people work across our three separate tech hubs, allowing me to take considered views from three independent groups of experts. This is helpful and means I get a balanced perspective. The experience gained from making good decisions and the lessons learned from making bad decisions historically are also very valuable in my current decision making progress.
Do you look at others in the FinTech industry as competitors or do you take a different view?
Yes and No. As a Group, we do not have single direct competitor because we have multiple business channels combined within one group. However, we do have competitors to some of our individual businesses, although my perspective is that everyone in the sector is someone we can potentially work with and learn from. Across the Group, a competitor of one of our businesses might be a potential client or supplier of one of our other businesses, so our outlook is necessarily collaborative and perhaps more relaxed to competitors than most.
To what extent is Brexit going to affect Quint Group?
That is a very good question – I don’t think anybody knows the answer to how Brexit will affect their business! We do not import or export goods and have limited exposure to currency fluctuations so certain aspects of Brexit may not affect us in the same way they will other businesses. My feeling is that Brexit and other economic and political challenges we have ahead of us, could result in an economic downturn, which could have the potential to negatively affect the UK economy. All we can do is prepare as much as possible, diversify to mitigate risk and react timely to changes in the socio-economic landscape.
What goals are you working towards with the company? What do you hope to accomplish?
Our company is ultimately consumer focused – our greatest successes are derived when we put the consumer’s needs at the heart of what we do and this ultimately drives our commercial success. In terms of revenue, our short-term goal is to grow to £100M GBP annually and successfully develop our international territories. Our long-term goal is to create Europe’s most successful group of FinTech businesses.
What is your advice for successful leaders in the modern tech-focused world?
Focus on the medium to long term and worry about getting that right. The medium and long term will soon become the now and if you take a long term approach, you will get long term results. It can be easy to get distracted with the day-to-day, so I mindfully set aside time for strategic planning on a regular basis. Another key area for me is keeping laser focused on real profits and revenues as opposed to users or other tech intangibles. I’ve witnessed too many people give away valuable services for free because they feel user volume is more important than traditional metrics of success. I think this approach will result in many businesses failing in the coming years.
This may seem like a scary feat, but according to Rob Moore, The Disruptive Entrepreneur and author of Global No.1 book ‘Money: Know More, Make More, Give More’ released on audio on July 27th on Amazon, there’s no better time to invest time and energy, if not money, in becoming an entrepreneur.
Should You Become an Entrepreneur?
I’ve often said before that the idea of “time management” is a joke, and it is.
Instead, let’s focus on “life management”.
So, ask yourself: how well are you managing your professional life? Are you keeping up with payments, progressing well in a field you are passionate about, protecting yourself and those you love, and feeling fulfilled while making a difference to the world around you?
Or, are you feeling overwhelmed, struggling to move forwards in your career, and feeling as if your decisions are controlling you, when you should be controlling them?
If you are answering “yes” to any of these latter questions, then I’m here to tell you that it’s time to learn how to succeed in life and how to make a change, to take your life into your own hands, and to find a way to carve your own profitable path of success.
It’s time to become an entrepreneur, right now.
Survival of the fittest
If you haven’t recognised that we are working in Darwinian times, what world have you been living in for the past couple of decades?
Pensions have become a vulnerable, endangered species. Manufacturing or manual labour jobs are being devoured by automated systems. Money is changing form and moving faster, technology is accelerating and contorting the whole financial, professional and private landscape, and businesses that sell no products and hold no stock are floating for billions.
Beyond all these disorientating changes, and more significant than these sometimes-worrying concerns, is the fact that with the age of information there has also arisen an age of opportunity. With the right mindset, the right dedication, and the right decision-making, you can make this upsurge of technology work in your favour and find your own successful niche in the market.
I’m almost tempted to suggest that we are living in a Brave New World, but this would be an exaggeration. Business is the same as it has always been; it’s simply changing shape, and the gulf between old and new technology is widening at a growing pace. This is the reason that we must all embrace this new age, or risk being trampled beneath it.
So, I repeat: it’s time for the stronger, fitter, more ambitious professionals among you to become an entrepreneur, right now.
Hard work is killing you
One of the most repeated, most foolishly believed lies is that ploughing through a 60-hour week for years on end will bring you success. That if you work harder and longer than anyone else you will triumph beyond them, make more money, and progress further.
These are the claims of someone who has not yet embraced the idea of finding success on their own terms, and someone who is ignoring reality. In 2016, work satisfaction in the UK was at a 2-year low, with almost 1 in 4 workers looking to leave their jobs, and over 1 in 3 saying that they were unlikely to fulfil their career aspirations in their current roles.
If you spend 60 hours every week working yourself mad for someone else, in the hope that you will get that promotion you have always craved and that your pay will rise incrementally, what about the activities you truly love? What about aiming for a greater share of the wealth you deserve? What about the time you struggle to spend with the people you want to be around? What about the physical and mental exhaustion that comes from slogging your guts out for so many hours, every week?
Then there is the fact that many of these industries are becoming redundant, and the inherent risk of basing your entire income and future on a technical skill that could no longer be required in the very near future. Without the ability to control the financial upside of your role, and if you are relying on the safety net of state systems to protect you when you retire, you may be wasting your present while putting your later years at risk.
After all, how many employees do you know who are truly satisfied and fulfilled by their job? How many shut their minds down at work and “just get through the day”? Combine this lack of passion and satisfaction with the long hours, the exhaustion, the lack of financial recompense and the fact that many sacrifice the time they could be spending doing the things they love, and you have a recipe for dissatisfaction at best, and disaster at worst.
Another time for the record: it’s time to become an entrepreneur, right now.
Merging passion with profession
I’m convinced that the ideal scenario is to run a company that allows you to merge the things that enthuse and excite you with technology and with the opportunity for making large amounts of money. You have nothing to escape if your work involves doing what you love. Interested? If not, why the hell not?
Once you have accepted and embraced the need for change, I advise seeking out the path of least resistance which has a limitless earning potential, a limitless customer base, and the opportunity for creatively making a difference in your field and potentially the world.
I’m not here to tell you the path you need to take, but the prospect is not as intimidating as it sounds. Some people who have been working a job for years will struggle to imagine altering their course now, and will scoff at the risks involved. But what is riskier than spending your life in a career that does nothing to satisfy you emotionally and very little to reward you financially?
While it may seem like a pipe dream before you begin, remember that the wealth of the richest people in the world, who make up 1% of the population, is worth 65 times that of the poorest half of the world.
Whose strategy seems to be working best: the 99% or the 1%? Which do you think is the group that is more satisfied with their lot, the more fearless, the more financially stable, and the ones making a real difference?
If you aren’t answering “the entrepreneurs” loud and clear, then I don’t know what else to tell you.
Seriously: it’s time to become an entrepreneur, right now.
Where can you start?
Becoming a successful entrepreneur is not always a straightforward process, but there are trends and similarities between different people’s success stories that you will benefit from taking notes from. When you study the most successful people in the world, you learn ways to emulate them, and are giving yourself a reliable fast-track road towards mastering being an entrepreneur. Read their books and biographies, listen to their podcasts, and watch their videos. No one can give you a better, quicker, and more thorough guide to mastering your own potential and investing in yourself, than those who have already succeeded in life and achieved what you want to achieve.
The fact is, many of these mega-rich money-makers idolised those who came before them, just as the smartest entrepreneurs are idolising and following the world’s richest entrepreneurs, now.
When it comes to your own personal vision for your ideal business, it comes down to your own values and shaping them into something profitable. Anyone seriously considering their future as an entrepreneur should have a crystal-clear image of what they want to achieve and a profound awareness of the things that matter most to them.
Look deep inside, start making notes on the things you love and the things you want to achieve, and start emulating the entrepreneurs who already know how to succeed in life.
You can do this. Many have succeeded in life before you, and many will succeed after you do, too.
So, what am I going to tell you, one final time?
It’s time to become an entrepreneur, right now.
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Looking to start your own business? Maybe you’re a few steps in already? You feel like you’re treading on egg shells? Gary Turner, UK Managing Director of Xero, here gives a brief analysis of all that can go wrong, and how to avoid them!
Entrepreneurs deserve a huge amount of respect for taking the leap to start their own business venture as it’s no small feat. You just have to look at the troubling statistics which show 21% of SMBs don’t make it past their first year to realise the challenge that’s set before them. I’ve been vocal that 2017 will be an unpredictable year for the UK economy, and following last week’s budget it’s vital now more than ever that a new business starts with as few issues as possible.
Here are my 6 Don’ts to ensure success in your first year.
1. Don’t rush your dream team
You may have a small network, you may have never hired an employee, and you may have many family and friends happy to help out. This can lead to new business owners bringing in familiar faces to help get them off the ground – but while this is useful for some aspects of work like admin and delivery, external expertise are vital. It’s not advisable to bring in family just because they’re accessible, take the time to recruit people who belong in a small business. The key traits to look out for are ambition and initiative, and an innate ability to work in teams. Alongside a specific skillset for different aspects of the business such as marketing, IT, sales and the like, it will help frame your company as a professional one.
2. Don’t market your company before developing your brand
The excitement of launching your own business is unparalleled, and naturally you’ll want to shout about it from the high heavens. However, before you go spending money on services claiming to boost the potential of your social media channels, you first need to create your own business identity. This includes creating your own brand values, distinguishing your unique selling point, identifying your tone, and keeping consistent messaging across all PR and marketing. No matter how someone hears about your business, it needs to be in line with where they may hear about you elsewhere.
3. Don’t lose sight of your personal life
Just because you’ve become a business owner doesn’t mean it should become who you are. You need to remember to keep you personal life separate from business. We need to respect ‘burnout’ as a real phenomenon, it’s not something only the weak experience, it’s human to feel run down and demotivated from a lack of enjoyment in life, so take the time to focus on you. A lot of this boils down to balancing work with play, and today’s technology makes accessibility to work a lot more possible. By using the cloud anywhere, you can cut commuting time and spend that time on extracurricular activities.
4. Don’t assume the role of an accountant
There are intelligent software tools that allow you to take your finances into your own hands. Online platforms can allow you to analyse your numbers, expenses, wages, POs/invoices and more. And while we believe this makes small business finance accessible and more easily digestible, nothing compares to the experience of an accountant. They’ll be able to monitor books for errors, use their knowledge to discover your eligible tax breaks, offer guidance and insight as a result of your numbers and more. Yes, accounting tools are important, but using someone’s expertise will help those numbers go that much further.
5. Don’t set yourself unrealistic goals
Ambition is important, but your first year should be the time to get your ducks in a row. Setting specific and high targets can be demoralising if you don’t hit your highest hopes, which is why you should set bronze, silver and gold targets. This will allow for a feeling of success, but it will also encourage you to push yourself to strive for gold – be it sales, exposure, clientele - targets will always be beneficial in building motivation and momentum.
6. Don’t go at it alone
Recent findings from Xero’s Make or Break report shows that, despite Brexit being a huge concern, 58% won’t be seeking help from a mentor. It’s unclear why, perhaps it’s from a lack of access to industry peers, perhaps it’s a strong sense of self-belief, but either way mentors can bring huge benefits . There is no shame in asking for advice, and most people will be happy to share their wisdom and experience. Don’t make a mistake that could have been easily advisable, hit the forums, attend networking events or even ask people in different industries – any knowledge you can soak up is vital to your future success.