Simon Dolan, SJD Accountancy
This sounds obvious, but it is amazing how many small business owners throw away money when it can easily be avoided. Missing tax deadlines is a classic example: a £300 fine may not sound like much for a large corporation, but for someone starting their own company, it is quite a chunk.
It is also important to know what you can claim. This sounds easy, but the governments advisory booklet on the subject is 100 pages long! For the start-up business, cash is king. When I first started out, I struggled to gain credit from the banks, which taught me to be very cautious about extending credit to customers. It is now becoming much more commonplace for customers to provide part or full payment upfront, and business owners should not be scared to ask for this.
Customer service is key
One of my first jobs was working on the local cheese and egg stall aged 14. The owner there hammered into me that if you make your customers feel special and valued, they will come back for more. 25 years later, the cheese and egg stall is still flourishing, and the owner is one of our clients.
Don't undervalue services
When I first started out, I thought that you needed to be the cheapest to attract new business. I quickly learned that being cheap is a help, but service is far higher up the buying chain of influences.
Know your limitations
Marketing looks easy, which is why many owner managed businesses think they can do it themselves. In reality it is easy to spend a small fortune thinking you are doing clever marketing, without getting much in return. After recruiting a marketing manager we now spend less than 1% of turnover on marketing. It used to be more than 5%.
Be a niche player
It took me ten years to figure this one out, but the days of the generalist are over. We talk to sole-traders and freelancers as just that. They have specific needs and requirements above and beyond how we would treat an engineering company, restaurant or pub.
Don't waste time writing plans
In the past, I've found it all too easy to slip into the trap of writing plans, but it is actions, not plans that generate new business, so don't waste endless days procrastinating when you could be out there getting results. It's better to write a one page plan and act on it, rather than writing a 50 page plan and wasting a week of your time.
Find the right employees and empower them
When the time comes to start expanding your company, you are likely to receive CVs from candidates with great academic qualifications, and fantastic experience.
When I was starting out, and still today, I look out for candidates who have a special spark, and who care passionately about doing a good job. My strategy involves empowering and trusting staff to make important day to day decisions, using their own initiative, or letting them develop and run their own business ideas and projects. By adopting this approach, the real go-getters soon step up, and they are then likely to shape their own roles and be focussed on achieving success.
Offering staff freedom of expression helps ensure an environment in which the employees are playing an integral part in building a company that they belong to, and this in turn makes for a healthy working environment.
When expanding, keep control
Over the past few years, we have really benefitted from the high volume of self employed people coming into the market. However, it is essential to know what is happening within your business, even if another office is at the opposite end of the country.
A prime example of this was where one of our regions employed a new accountant who worked mainly from home. All appeared fine, but after an internal audit, which we do every six months, we realised that the new accountant was stealing customers and supplying his own company which he had set up.
I had not expected to see corporate espionage in the professional world of accountancy, but this was a valuable lesson. Tighter controls need to be balanced carefully, to ensure that employees retain their freedom of expression.
For more information visit www.sjdaccountancy.com
Post Date: May 13th, 2010