digital

Why 2011 should be a great year for north west entrepreneurs

Despite talk of economic doom and gloom, here are just 3 reasons why I think 2011 will be a great year for entrepreneurs and fast growth businesses across the north west:

  1. The North West Fund is here to provide £185m of equity and loan funding making investments of £50,000 to £2m into fast growth businesses across the North West. This includes specialist funding for local emerging sectors such as digital and creative, biomedical plus energy / environmental.  Just the spark that businesses have been looking for to help them achieve their ambitious growth plans – I look forward to working with my clients to make this happen in 2011.
  2. MediaCityUK finally launches. A £650m new city built to service creative and digital companies. Large parts of the BBC are on their way; ITV is also coming and, more excitingly, a hot-bed of exciting new talent and businesses should flourish to support these Goliaths of the creative sector. (I look forward to taking a trip around it to check on progress this Friday).
  3. Despite public sector cuts and the demise of the NWDA, local initiatives like Techcelerate, Manchester Digital, Sharp Project, Daresbury Innovation Campus plus many others will step up to the plate in delivering access to services and support for new businesses – and further new initiatives will no doubt emerge to plug gaps as they emerge.

This is an exciting time to be living and working in the north west. Make no bones about it, its going to be tough plus I am mindful that we need to continue to build solid links with London and internationally, but so long as we can get our own entrepreneurial infrastructure firing in the north west then we should be in good shape for 2011.

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How to get to grips with your business finances

It is easy to get caught up in ‘doing’ rather than ‘running’ your business.

So many business owners find themselves running simply to stand still – finding new customers, taking and fulfilling orders and addressing (hopefully not too many) customer complaints.

Sometimes its difficult to see the wood for the trees:

I’m really busy so I must be making money – right…?

Not necessarily.

Understanding your business finances

It is understandable that, at the end of a busy day working in your business, you would prefer not to review your business finances. But if you don’t understand the numbers that your business is producing then how will you know which bits are working (and profitable) and which bits of your daily work are simply a waste of time and effort?

I frequently recommend that owners of new businesses sit down (at least weekly) with a pencil and journal (yes, that technical!) and write out the week’s sales figures and costs by hand. I find that there is something more insightful about using a pencil and paper compared to an excel or similar spreadsheet – perhaps its the exercise of writing by hand that makes you think more deeply about the figures and how they connect (or not…).

At its most basic, to write out your sales income (ideally split across services or products) and associated costs, will give you a much clearer view of what is profitable work and what is unprofitable – the figures rarely lie. You would be astounded how few entrepreneurs do this simple exercise – and by the number of business owners whose jaws hit the desk when they realise why (or even that!) they are losing money you can tell they wish they’d done this far earlier!

Moving on from pencil and paper to the day-t0-day, I’m a big fan of online cloud accounting packages like Xero as they provide a live dashboard view of the health and performance of your business. Now with live feeds across the majority of UK banks, entrepreneurs can get a realtime view of the health (or otherwise!) of their business. The bank balance is clearly there to see plus debts receivable as are costs payable. Cashflow is absolutely king for all businesses so the ability to see how much cash is in the bank, how much is due in and how much is due out at any one time is crucially important if you are to be in the driving seat in running your business.

Don’t get put off by accountancy mumbo-jumbo, simply by taking the steps set out above on a daily or at least weekly basis, you will be streets ahead of many of your competitors who are ‘busy being busy’ with no clear focus or direction on what works for the future of their business. Try it. Let me know how you get on.

If you are a digital, tech or creative business and you would like some assistance in getting a better grip on your business finances then please drop me a line.

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