Being an entrepreneur is just the beginning. Building a successful and sustainable business requires strong leadership, management and an understanding of how the finance team can drive growth.
Speaking at Access’s Springboard to Growth conference in the Forest of Arden last week, Guy Rigby of Smith & Williamson outlined his principles for building a viable business.
Martyn Dawes, founder of Coffee Nation, also spoke at the conference about building his business and confirmed some of the points raised by Rigby. Dawes told AccountingWEB how his FD had helped to fuel the company's rapid growth:
· The FD was an invaluable part of the team and having one on board was “a condition of investment”
· “A good FD is like the navigator on a ship plotting the course – don’t set sail without one”
· “It wasn’t exactly a love/hate relationship, but we didn't understand each other at first. She [the FD] became a good foil and was a leveller”
· “She had her head down in the numbers, but we eventually came together”
· “You need evidence that your business works. Despite an insatiable appetite for data, the business went to banks to start with but we didn’t get any until four years in”
· “Get a good adviser, beware the small print, get investors and ask them lots of questions”
During his talk, he outlined the following top tips for entrepreneurs running fast-growing companies:
- Recognise the shift in skills required - it’s important to realise that management is not the same as leadership. Understand the difference between delegation and abdication
- Don’t retain the role of chief fire-fighter - it can be self-limiting and prevent the business from growing
- Invest in capability - build infrastructure, which includes recruiting people to take on the responsibilities that were once your personal domain. Allow others to prove their worth
- Assume the role of strategist - think about what’s next, look forward, outward and upward. Establish relationships to enable growth and shape the business for the future
- Don’t be tempted to meddle - it can have a detrimental effect on the growth of the business
- Trust defines leadership - you won’t unlock the potential of your team unless you build trust
- Build up a management team - you don’t necessarily need a full-time FD, but when you make that jump, get the FD first and then a non-executive director
- Understand the motivations of the management team - build on your confidence and knowledge to effectively manage others
- Figure out where you fit in the eco-system and how you adapt - collaborate to accumulate. Work out where your business fits in the product, market, service or price matrix
- Diversity is the name of the game.
Rigby, the head of entrepreneurs tax and business services at Smith & Williamson, used to be an accountant with Chrysalis Records. Based on his experiences, he suggested the following principles and tips for finance teams in entrepreneurial businesses:
- Penny pinching on finance is not the thing to do
- As a fast growing business daily or weekly reporting is important
- KPIs are not all about pounds, shillings and pence - it’s the other things you need to measure
- Don’t run out of cash!
What business growth or financial advice would you offer a budding entrepreneur?