Starting a business can be a tortuous process and can be fraught with difficulties. Businesses stand or fall for a number of reasons and Nasser Elaheebocus (NE) of Business Pulse is all too familiar with these as he has worked with hundreds of businesses in their early years and during their growth phases.
He recently outlined the 3 common causes of failure as:
- Assess your strengths and weaknesses. You must listen not only to yourself, but to others to overcome any shortcomings. The quality of leadership and management is the most important criteria of your business.
- Not being ready to go to market and the market not being ready for you.
- Inadequate finance to cover any shortfall in working capital, especially in the early days of the business.
With these three causes in mind, Jeremy Taylor (JT), who launched The Company Connector a little over 18 months ago, sat down with Nasser to discuss his approach to starting the business, lessons learned and actions that may need to be taken.
NE: Hi Jeremy, why did you set up your business and what do you do?
JT: After 14 years as Chief Executive of Gatwick Diamond Business (gdb), a strategic leadership role in the nationally significant Gatwick Diamond region, I set up The Company Connector Ltd in August 2018.
We help businesses connect and work effectively to achieve their commercial aims by using my contacts at a local, regional, national and international level along with my knowledge of the Gatwick Diamond Economy and its relevance to the UK National Economy.
We are also building an international network to assist businesses in the Region and beyond in exploring export markets and would support overseas businesses looking to land into the UK, through Gatwick.
NE: Jeremy, when you set up your business, how did you estimate your sales & how long it would take to achieve these? Overestimating is a common mistake and can have a huge impact on cash flow.
JT: Loosely speaking, I had an idea of what we needed to earn, I had an understanding of the scale of charges we could make and then evaluated how many days we would need to work along with the types of projects we could deliver.
However, this wasn’t a complete leap into the unknown as I had secured some consulting work before I left my old job, so I knew that there would be an income from day 1.
We also clearly stated payment terms so that clients knew what to expect &, I’m delighted to say, we have achieved an average of around 25 days invoice payment period. Cashflow is good!
NE: There’s also an issue with start-ups on underestimating setup and running costs as well as controlling vital operating costs so how did you address that setup and what are you doing to manage your business outgoings?
JT: The start-up costs were relatively low as we had home computing and other supplies available. There were some costs in building the company identity, logo, website & social media profiles, but websites like www.Fiverr.com are a great source of supply. And they are great value!
The main driver in this area was starting the business with a three-year Business Plan and a vision through to 2027. At the moment, we are pretty much on target for income although the sales mix is not what we anticipated and needs to be addressed.
NE: Cash flow is cited as one of the biggest issues facing business so how do you ensure you get paid on time?
JT: As I mentioned before, we clearly state payment terms of 30 days and most of our customers fall well within that. We also make sure we get a Purchase Order and, possibly most importantly, follow the invoicing process set by the client, if there is one.
NE: When you set up your business, you said that you had a number of potential income streams so how did you know there was a market for each of these and what research did you carry out?
JT: During my time with gdb I realised that there was a role for someone to provide engagement services for public sector or major infrastructure project providers. I’d also been aware of some of the regeneration projects that had taken place and seen the positive impact from those projects. I was convinced that there would be opportunities to support businesses with international trade services in a post-Brexit environment. And, finally, as an experienced public speaker and event host/facilitator I was sure that I would find work in this space.
The research I carried out was in talking to prospective clients and other influencers to test my theories. The majority came back with positivity and in some cases, the offer of work.
NE: What changes have you seen in your market(s) and how have you adapted your offer?
JT: One of the key issues to affect the business was with the speed of Brexit. Whilst I was in no way an advocate of Brexit, I felt sure that it could create opportunities and so we worked towards the original 31st March 2019 deadline – remember that one?
When there were delays to Brexit, then that caused uncertainty in the marketplace and so a lot of our conversations with prospective clients were vague. It’s interesting to note that, since the General Election at the end of 2019, the conversations have become a lot more definite and we are starting to see some real traction with international trading clients.
In respect of other work in the regeneration and stakeholder engagement space, we have yet to see any significant changes. However, we do keep an eye on Government Policy as that can have an impact on these types of projects.
NE: Many business owners start a business based on a solitary idea, product or service, but they often lack the other business skills. What do you do to keep current and effective in marketing, finance, administration, etc?
JT: Having had total commercial responsibility for Gatwick Diamond Business and in other roles, I believe that I have good overall understanding of the various business functions that we would have to undertake. Some of those functions are more interesting than others and it is sometimes difficult to knuckle down to the less glamorous tasks, but good discipline and time management help.
In terms of business skills, we regularly attend learning and networking events to add to the knowledge base, we read widely and have a great relationship with our accountants so we can keep on top of administrative functions such as Making Tax Digital.
NE: It can be challenging and lonely starting up, so who supports you?
JT: Being a 2-person business we rely on each other a lot and work well together. We’ve also found that it is important to be out & about, meeting with people and discussing ideas and issues. There’s further support to be found with our accountant & other professional advisers while membership of organisations (such as gdb) brings contacts as well as someone to talk to.
The important thing is to be ready and willing to ask for help and to accept it!
NE: Distraction can be a time and business killer so how do you keep focused and what do you do to ensure your time is spent profitably?
JT: LinkedIn …. Twitter … Facebook … Blog writing …. Website … going to events …. Networking …. Learning …. Writing this article! How on earth do we have time to work?
The best thing I learned across my life is to make a list, have a good diary and a sensible administration system with time allocated for paid work, marketing, administration, prospecting, learning, lunch & down-time. The diary has to be flexible and we have to be prepared to respond quickly to client needs, but it is vital that we are commercially active.
NE: If you had to start again, what would you do differently, if anything?
JT: Two things, I think.
1 – On reflection (and possibly like many businesses) we may have set our starting rates lower than we needed to. It can take a while to establish any new business with a commercial rate that is acceptable to clients. To compensate for this, discussions have been held with clients across the first 20 months and we have been able to increase the daily rate in line with the Plan.
2 – In order to generate more income from Speaking and Events, we could have taken some opportunities to host events for free, in return for capturing video footage of those presentations to build a ‘showreel’ to give to potential clients and booking agents. This an action that will be taken forward in early 2020 to ensure we have a clear offer for event clients.
NE: Any final thoughts or recommendations?
JT: I can happily say that this decision was the right decision for us and came at just the right time. There is no question that we are still in uncertain times for the economy and the country, but we are ready and flexible enough to react positively and, I believe, sustain the business.
Nasser – Business Pulse – www.businesspulse.org.uk – 07946 284256
Jeremy – The Company Connector – www.TheCompanyConnector.com – 07831 148064