Now, I am sure my accounting colleagues would not mind me saying that, most accountants make lousy entrepreneurs. We just lack the creativity and drive which makes entrepreneurs so effective at getting new business ideas off the ground.

So why should entrepreneurs/business owners be great accountants?

Each role requires an entirely different skill set and way of working and, indeed, a different personality type (if you are familiar with DISC profiling). So don’t be shy about admitting that you are stuggeling with the money side of your business.

Many business owners do not seek the proper help and guidance, or have the right level of financial information, to help them make decision.  To me this is a huge mistake which can lead directly to business failure. As a responsible business owner/entrepreneur you do not need to be a trained accountant but you do need to have enough knowledge of financial issues to run your business effectively.

So what do you need to do to get this knowledge? Well, for starters:

1. Ask lots of questions of your accountant about why the figures are as they are.
2. If you only receive figures from your accountant once a year, several months after the year has finished, this is not enough! You need to have regularly updated financial information to make decisions on a timely manner.
3. Have a properly thought through profit and loss and cash flow forecast so you can manage your cash – and make sure it is regularly updated for what has actually happened.
4. Don’t just be happy with knowing how much you have sold in total and the margin on this total figure. Ask how you can get information on individual customers, products and projects so you are clear which activities are profitable – and which not.

It is not good enough these days to just shrug and say “Well, I am just not good with figures”. You started your business to make a living for yourself, and any staff you have, and you owe it to yourself, and them, to have a good handle on the money in your business.

To help I have written “your guide to understanding business finances” which can be downloaded for free from my website www.fionabevanfinancialmanagment.co.uk

Good Luck

Fiona

The UK is a nation of entrepreneurs and we brits are great at taking the plunge into business ownership – whether it is a self employed professionals or as small business owners employing staff.

However, for many entrepreneurs taking the plunge is not the hardest part – it is running a successful company in the longer term that provides the stress.

The problem here is that the prospective entrepreneur has often not done their homework.

In particular:

1. They have an idea they are sure is going to work, but have not done a full business plan to explore whether it can be converted into a successful business.
2. They have not consulted appropriate professionals to ensure their company is set up in the best way.
3. They don’t align their personal and business goals. They soon find their business running their lives rather than them running their businesses.
4. They don’t finance their business sufficiently from the outset, which means they can never afford to do jobs properly. Marketing in particular often suffers in this scenario.
5. Because they haven’t planned properly they don’t fully appreciate the risks involved in setting up their business until it is too late.

Starting your own business is a BIG step. If it fails you may not just lose your livelihood but also your house (and your family if you have had to work very long hours).

It makes sense to give your business the best possible chance of succeeding.

To help I have written a guide on starting your own business which can be downloaded for free from my website www.fionabevanfinancialmanagement.co.uk

I have tried to cover all the issues you will need to think about before taking the plunge as well as some of the things which might trip you up.

Enjoy!

Fiona J

One of the reasons is exemplified by a conversation I had yesterday with just such a business owner. They have no problems finding the right customer and do a fantastic job for these customers.

However, the business owner has a real stumbling block when it comes to invoicing and debt collection. Firstly, they hate the process of invoicing itself – it is a chore they put off as long as possible. Secondly, once the invoices have gone out they are very reluctant to chase for the money owing to them.

In my opinion they are being an April (and every other month of the year) fool.

They are working hard but because they are not following through, and collecting the money owing to them in a timely fashion, they are struggling to pay their bills.

What makes the situation worse is that they have employees they MUST pay every month irrespective of whether the business is paid or not.

There is a clear lesson to learn here – if you are unable, or unwilling, to deal with the discipline of invoicing and debt collection you must find another way of getting these jobs done. If you don’t, you may lose your business.

So what are the alternative approaches you can take?

Firstly, many bookkeepers are more than willing, and able, to take on the invoicing and debt collection roles for  you. The benefits of delegation will way out-weigh the costs.

Secondly, you may already have a member of staff on your team who can take on these jobs.

Thirdly, if you really have to do these jobs yourself, you must change the way in which you approach them. Have a very clear procedure detailing exactly how often invoicing should be done (at least once a week would be my recommendation), block out time in your diary every week devoted to invoicing and debt collection, and understand that any work you do for clients is worthless unless you are paid for it!

For extra help with invoicing and debt collection please download the ‘Getting Paid’ guide on my website http://www.fionabevanfinancialmanagement.co.uk/guides.php

Good luck

Fiona

The reason for this is that January is often not a very positive time of year. With its dark days and long nights, contrasting with the gaiety surrounding Christmas, January can also be the darkest month of the year physiologically. Not the time to create new plans and start to change your outlook.

Three months on it’s a completely different story.

The clocks have just changed so we have longer evenings. The sun is shining, the buds are appearing and the world seems fresh and new.

What a fab time to be thinking about the future.

In my opinion creative juices flow better when we have the opportunity to get out of our offices and enjoy the sunshine. We are more positive and open to opportunity. We are less likely to dismiss ideas out of hand or procrastinate.

Others must be thinking this too as over the last month or so four owners have come to me for assistance in putting together plans for their businesses. One is for a completely new business, but the other three are established businesses looking for a change in direction.

So if you need to change your business plan or set goals for yourself and your business, NOW IS THE TIME TO DO IT!

Fiona

In my opinion an established business which does not pay its owner(s) a decent wage is really a hobby. So given that we need our businesses to make money it follows that we need to be sufficiently au fe with business finances to understand if our business is running our finances, or whether we our running our business finances.

Unfortunately, a large numbers of business owners are not financially savvy enough.

If you would like to see if you are one of these, try answering the questions below:

1. Do you have a clear financial plan?
2. Do you know if your business is currently profitable?
3. At this point do you know how much money is in your bank and what money you can expect in and out of your bank account over the next month?
4. Do you know what customers/products/services are profitable?
5. Do you have a robust invoicing and debt collection system so clients pay you in a reasonable time (do you know what reasonable is?)?
6. Are  you always able to pay your suppliers on time?
7. Can you always pay your salary/dividend/drawings?
8. Do you know how much you have to sell, and at what price, to provide the lifestyle you want?

If the answer to two or more of these questions is “no” you are probably not as financially savvy as you need to be to run your business effectively.

However, help is at hand and there are ways you can help yourself.

• If you have an accountant/bookkeeper ask them questions about your financial position and what you could do to improve it
• Talk to your business friends who seem to be financially sorted and ask them what they do
• There are volumes of business books out there that can help you understand the basics
• Take time to properly plan
• You may want to go on a finance for non-financial managers course to learn the basics in a workshop setting.

Finally, I have written a series of FREE financial and business guides which you can download from my website http://www.fionabevanfinancialmanagement.co.uk/guides.php

You can download as many or as few of the guides as you like without registering so please do take advantage of them.

Fiona

One of these is a brand new business startup, whilst the other 3 are business owners who are planning to change their business model or want to expand.

As I am used to doing one off business planning for 2-3 businesses a year, this increase in interest has got me thinking. Are more people starting, or expanding their businesses; are more business owners accepting the need to have a proper plan; or am I just more effective at getting my message out there?

My suspicion is that it is a bit of all three. However, I am particularly interested in why, in a recession, more people are thinking of starting, or expanding their businesses, when all the  newspapers are trying to convince us that the economy is in meltdown. Surely now is the time to hunker down and protect what we have?

Well not necessarily. It is often when times are good that we are most resistant to change. When we are in our comfy safe jobs, earning comfy salaries, we are at our least creative. Why plan for an exciting future when you are bumbling along quite happily as you are?

It is when our comfy lives are threatened, or ripped apart, that we are most likely to explore new avenues. We have less to lose and more to gain.

So if you have been toying with a new idea or want to breakout on your own perhaps now is YOUR time.

But please remember to have a proper plan. Make an informed choice about whether to jump or not and make sure yours is not one of the many small businesses who fail.

Fiona

Much of this advice has been freely given, without any thought of direct benefit to the advisor. Most of the advisers believing in the mantra ‘what goes around, comes around’.

I believe this too.

If you treat people as you would wish to be treated you can’t go wrong. Further, it is those people who give most freely of their time and energy who have the most successful businesses – not just in terms of money but also in terms of the enjoyment and satisfaction they find in their business life.

Of course, you have to make a living and it does not do to give away the crown jewels for free if they are your source of income. However, there may be people who will never become clients, who can be assisted along their journey.

For that reason I have written a number of business guides for small business owners for whom having a management accountant is an unrealistic expectation. These guides can be found by linking to: http://www.fionabevanfinancialmanagement.co.uk/guides.php

You do not need to register with me to down load the guides and they really are free.

Enjoy!

Fiona

Firstly, my great friend Trevor Lever (Trevor Lever Consulting) really helped me to get some perspective on a tricky client issue I had. Just before meeting with said client I luckily bumped into Trevor in his office at Starbucks, Wells. Because I know Trevor so well I was able to really talk through my concerns and bounce around some ideas with him. This really helped prepare me for my meeting – which meant I got the results I needed.

When we work on our own it is difficult to be totally subjective and to think through issues which affect our business in a logical way. Having partners like Trevor is a real boon and makes running my business a less lonely experience. Thank you Trevor.

Secondly, my excellent IFA Andrew Stinchcomb (Integrity Financial) is really helping my husband and I to put together a robust financial plan for the future. He is always coming up with wheezes to make us better off financially. He has saved us thousands in pension fees and is now looking at how we can pay off our mortgage earlier – without paying anything extra! Now you will think that that is his job: and it is. However, Andrew is unusually  generous with his time and energy. Thank you Andrew.

Finally, my web designer Jeff Bevan has been working tirelessly to keep my website up-to-date and running efficiently. Now he is my husband, and living with the client is certainly a way to keep the pressure up. However, Jeff does a lot more than just what I ask him to – he is always on the look out for ways to make my website better. Thank you Jeff.

I believe a small business is much more than just the business owner and their clients. It is the cloud of goodwill from strategic partners and suppliers too.

Fiona

It is unlikely that the banks will be any more willing to lend money than they have been during 2011. The state owned banks in particular are struggling to make money and are fighting hard to strengthen their own balance sheets. To do this they are deciding to take on only that debt which is guaranteed. Consequently normal owner managed businesses will continue to find it hard to get financing from their banks.

This means that companies must do all they can to ensure that they are in control of their own destinies – particularly when it comes to money.

Here are some tips you can follow to ensure that you don’t have any financial surprises in the coming year:

1. Firstly, have a fully thought through cash flow forecast showing when you expect money in and out – including any larger fixed asset purchases you will need to make.

2. Secondly, assuming you are not a bank, give credit to your customers with care. Don’t give credit at all unless there is a clear business case for doing so. If that business case is there, check with credit vetting agencies that the customer is credit worthy. Once you have agreed the credit terms make sure you have them clearly laid out in your terms of business and on any invoices you send out. Finally, make sure you have rigorous debt collection procedures and FOLLOW THEM.

3. Watch your spending and ensure that you only spend where there is a business case for that spend. Questioning every £ that goes out of your business (and this means before an order is placed with a supplier not once the company is committed) will make a surprising  difference to your bank balance.

4. If you are making any large purchases think about the best time to make the spend. If you buy in haste you are likely to pay more than if you have time to make a considered purchase. You might also want to look at using HP or lease financing rather than using your working capital.

5. Keep bank fees down by prudent use of credit cards (always pay off the balance in full when it is due!) and by looking to pay, and be paid, in ways which are cheapest for your bank (and you) to process. This means use cheques only if strictly necessary and cash only as a last resort.

By being aware of your business finances and taking an active roll in managing them you can help ensure the financial health of your business.

Fiona

Unfortunately, it is not the done thing to make resolutions for others – as Karen in Outnumbered tried to do – so I cannot resolve for my sons to keep their rooms tidy or to play on their computers less. So I will have to stick to resolutions for myself.

As with many of you top on my list is to get a bit more active and eat more healthily after the Christmas excesses. I would also like to budget better on a personal front and stop being tempted by sales and other tactics employed by shops to part us from our money.

On a business front I am going to try to blog more consistently – once every two weeks will be my target.

To be honest though, I think January is the worst time to make big promises to ourselves to change. The dark days and miserable weather are not conducive to positive thinking – and I certainly think winter is the worst time to try to lose weight.

So my advice to anyone who is thinking of giving themselves big challenges in 2012 is to make some small resolutions in January and then aim to start making any big changes in the spring.

I find that by saving big things to March/April the positivity induced by the lighter days and better weather helps to ensure my resolutions get off to the best possible start. I am not saying that I always keep on the right course, but I certainly stay in it longer than I would do if I started in January!

Good Luck

Fiona