View Full Version : Any Tips for Starting-Up a Small Business.....

1st May 2014, 04:45
....hoping the biz will become a medium to large-scale operation, someday?

1st May 2014, 04:46
BTW.....it has nothing to do with aviation....and thank cripes for that! :eek:

1st May 2014, 05:18
What sector/products will you trading in?

1st May 2014, 05:23
Get customers first, know what you are selling, for how much, and why they need them.

Make sure your payment terms are clear, and if a service you have a contract and deliverables are not vague that they can claim reasons not to pay.

Once you have that, do what ever you need to do to deliver the product. <---- and if you don't know how to do this, or step 1 above, go get a job somewhere.

Everything else is just execution detail, with a million different ways, none right, though some wrong!

1st May 2014, 06:00
Birddog has the most important points. Also, know your competition, and whatever the product or skills, you have to market them, they won't sell themselves.

1st May 2014, 06:05
Any Tips for Starting-Up a Small Business.....
You take a big business and...

1st May 2014, 06:06
If you are new to running your own business avoid getting involved with anything that has large investment or high fixed overheads.

1st May 2014, 06:07
Cashflow. It's always cashflow that causes small businesses to fail.

Don't be too proud to admit you've made mistakes or that taking a different path would be better.

Know that there is no instruction manual.

Good luck:ok:

1st May 2014, 07:23
I second perthsaint.

I once had a company where a new board member said to me:
"Have you heard the joke why startups fail?"

I had a million thoughts run through my mind and defensive rebuttals, though let him finish:
"They run out of cash"

I really learned that lesson when that business failed with cash-flow issues.

The why, how, etc. not really important, the lesson was.

1st May 2014, 07:35
Many businesses fail by trying to be all things to all people. Identify a market, tailor your products and services to that and stick to it.

1st May 2014, 07:41
that's really a sound advice. Even though it's hard to say 'no', if it's not very far from your products/services. Still, there has to be a line somewhere.

Good luck and fingers crossed!
Why not start a business based on a need you yourself have, that is not properly addressed by existing suppliers?
BBC News - Top tips for starting your own business (http://www.bbc.co.uk/news/business-16595152)
BBC News - Do you need to be rich to start your own company? (http://www.bbc.com/news/business-23510961)

Effluent Man
1st May 2014, 07:51
I started mine in 1977 and went through a sticky patch in the early 80's recession.During the late 80's and 90's it went really well.Luckily I am winding down towards retirement now because trading conditions are hard.If I was trying to start at the moment I think it would be very difficult.

1st May 2014, 09:01
Birddog + Perthsaint :ok:
Know your Unique Selling Point
The best advertising is word of mouth.
Keep on top of the paperwork (e.g. tax); don't leave it all till year end.

Have an outline plan for successful rapid expansion if you are in the kind of business where that might happen - sometimes your best case can turn out to be your worst case if you aren't prepared

Effluent Man
1st May 2014, 09:06
My guess is that success is largely about being in the right place at the right time.So possibly the best advice of all is to be lucky.

1st May 2014, 09:15
So possibly the best advice of all is to be lucky....and the harder/smarter you work, the luckier you get (usually).

1st May 2014, 09:28
Don't start a restaurant. Most fail within a couple / three years.

A story: For a while we had a fellow seconded from Control Data. He was one of Control Data's earliest employees. He and Seymour Cray had some extra cash and got a franchise for a fast-food restaurant which they ran as an investment. It failed. People in the computer industry will recognize the Cray name.

1st May 2014, 09:35
....hoping the biz will become a medium to large-scale operation, someday?

Yes. Ensure you are well capitalised... otherwise you have bugger all chance of running anything other than a cottage industry.

The typical SME cash-flow issues alluded to by other posters above are merely a side-effect of the majority of startups being under capitalised, thus giving them insufficient breathing room in the realities of business, especially if you are dealing B2B which is pretty much always post-payment as opposed to B2C which is typically pre-payment.

The second secret of business is that you must not, under any circumstances, treat your customers, staff or suppliers as friends. You've no doubt heard the expression "familiarity breeds contempt" ... well, if you're serious about growing a business, keep things on an arms-length basis at all times. If you don't, it will come back and bite you in the backside, absolutely guaranteed 100%. Be "friendly" but not "friends".

There are many other things I could suggest, but one more ....

Employ the services of a good lawyer. Especially in the areas of :
- Drafting T&Cs for customers (You MUST ensure that ALL your customers agree to T&Cs, no exceptions)
- Reviewing key supplier contracts (especially if they are committing you to some sort of multi-year deal)
- Drafting Employment contracts (ideally should be an employment law specialist who can also give you general advice on employment law which is a veritable minefield in places like the EU where everything is weighted heavily in favour of the employee and you can easily get into a LOT of very expensive trouble if you don't do things by the book )
- Reviewing leases for premises (even if its a "serviced office" rather than a full blown lease, its absolutely critical you use a specialist in commercial property with proven experience... because their negotiation work could save you a lot of money down the line ... e.g. in relation to delaps clauses and other stuff hidden in the small print .... commercial landlords are pure evil !)

Don't be tempted to buy ready-made boilerplate fill-the-gaps legal documents online.... they are a waste of money.

Refer back to my point number one about "well capitalised" before you start moaning about "expensive lawyers". :)

Rwy in Sight
1st May 2014, 10:03
Make sure that the initial assumption on having a good product / service is correct and people are actually willing to buy the product. They are two different things saying you would buy a product and actually buying it.

Rwy in Sight

1st May 2014, 10:04
I'd say to make sure you're in a really small office with a really small chair. Use a really small pen and have a really small computer. And only employ really small people.

What? Well that's what you get for posting in Jet Blast. :}

1st May 2014, 10:09
People in the computer industry will recognize the Cray name

Yes and even the great Seymour Cray faced frustration and company bankruptcy (vide. the Cray Computer Corporation and the Cray 3 of which only one was sold)...

If you are planning a tech startup then you are facing the fast running conveyor belt of keeping up with a very dynamic environment that will leave you as marketing director facing constant stress and grey hairs...


1st May 2014, 10:22
I'd say to make sure you're in a really small office with a really small chair. Use a really small pen and have a really small computer. And only employ really small people.


So are you saying V2-OMG is Snow White then ? :)

cockney steve
1st May 2014, 10:40
Be ruthless with Credit Control!
I had PLC's local factory fuel-account....it was worth 50% of my fuel sales. Unfortunately, by the time they settled, they owed another full month,so I wound up financing ~3,000 gallons of Diesel for them.
Came the day, I refused service. The cheque, which "only London can issue" Was magically given local authorisation, within the hour.
Don't undervalue your service, anyone can be cheapest!
Look after staff, they are POTENTIALLY your biggest asset.
Weed out the misfits sharpish!
Did I mention Credit Control?- Don't be suckered by ANY excuses.
strict terms, otherwise you are paying to finance THEIR business.
I've seen more than one go bust by ignoring that rule!

Be honest with suppliers, if you have cash-flow problems, TALK!
The silent debtor is the one to fear, the one who keeps you informed , is often the one who , like you, is sufering "growing-pains" "bending the rules" in such cases, is down to personal judgement...if you get it right, that can turn out to be the making of both .

1st May 2014, 10:41
Someone's mum decided to make home made jam for
her friends.

Soon she was making so much jam she began to get
a little out of pocket, so she charged a small amount
to help cover the costs.

After a year her fantastic jam was so well known in
the parish she had a room in her house converted into
a little shop and charged cost plus a little for herself
to augment her meagre pension.

Year after that she opened a small business in a shop
called "Mum's Jam" and had her friend Maisie and Ethyl
help out. In a few months all the women were earning
enough to not need the pension anymore.

In 2 years "Mum's Jam" was a must-have in everyone's
larder. Soon it became impossible to operate from her
little shop and moved into a premises down the mall
that was once a small supermarket.

Three years later mum decided to take over a food
factory to solely manufacture her jam. Not only her
famous Apricot, but now Pineapple, Fig, Strawberry
and Apple. She had to alter her jam recipes though
in order to satisfy mass production schedules and
Health codes.

A year later for legal purposes "Mum's Jam" began
trading as "MumCo" (Mum Consolidated).

Twenty years after the first jam she made for some
friends, MumCo had cornered the market and was
exporting all over the world. Mum herself, though
getting on, had had many numerous plastic surgeries
including a boob job and a tuck...down under, some
Summer mansions as well as the owner of numerous
Porches. Her jewelry collection alone was valued at
several million dollars. It was then she had three new
factories commissioned open, making a total of 4 in all.

The huge MumCo factories pump out jams 24/7 and
the Company listed on the NYSE just last year. It was
oversubscribed and is today worth a cool 1.4 bill.

Anyway I just heard an old lady I know is making real
yummy home made pies for her friends. I might see if
I can cadge one rather than any of them horrible yuck
commercially made ones...

Private jet
1st May 2014, 10:52
Remember the adage "Cash is king".
Always aim to keep a healthy reserve in cash.

Avoid borrowing money from banks if you possibly can, you'll be working for them and not you and they will have a hold over you.

Avoid the temptation for fast growth. Even if customers are piling up at your door. Many potentially successful businesses have come unstuck by rushing into expansion, overextending themselves and becoming vulnerable to unexpected events.

Keep all your processes as simple as possible.

Be very picky with who you take on as employees. Don't automatically go for the most qualified or experienced. Select people that are capable of whats required but importantly "fit in" and you feel relaxed with. Treat them with respect but never develop a direct friendship. You need to maintain that boundary always.

Don't tolerate late payers, they are basically using you, and once a late payer always a late payer. Take decisive action and don't let things go on and on hoping they will change.

1st May 2014, 10:52
So are you saying V2-OMG is Snow White then

If she is Snow White then she had better fire those members of her staff called Grumpy, Sleepy and Dopey (in fact fire Sneezy as well as he is likely to take too much time off)... ;)


Clare Prop
1st May 2014, 11:19
There's some great advice here.

Before setting up on my own I had been a manager of small businesses (farming, as per my degree in farm management), a contractor and later on managed much larger businesses (supermarket with 50+ employees) so I had a fair bit of experience to draw on.

The only thing that ever gave me sleepless nights was pathetic, time wasting staff hassles.

I started my current business as a one man band, grew to a staff of ten, the sleepless nights were back so I went back to being a one man band and it's great. Nobody there to borrow my stuff or mess up my procedures or muck my customers around. Stuff gets done properly.

Cashflow...COD is the only way. Have EFTPOS and make it someone else's problem if your customers have cash flow problems, don't let them drag you into a race to the bottom. Never extend terms longer than 7 days if you really must and if they haven't paid then stop supplying them on day 8.

Know how to do a gross margin. Have an exit strategy and stick to it. Do your own books, every night, never trust anyone else with your book keeping. If you are not interested in book keeping then go and work for someone else.

And remember a partnership is a ship designed to sink.

Good luck!

Ethel the Aardvark
1st May 2014, 11:21
If you deal with lots of different customers try and keep a smartphone record of their spouses names, kids, sports etc,
When you mention for example how's your wife Barbara or did your son get in the team blah blah blah six months down the track the reaction is usually one of
"hey this guy is really interested" as opposed to that twit down the road who doesn't give a monkeys ( or maybe doesn't have a smart phone)

1st May 2014, 12:02
Never extend terms longer than 7 days if you really must and if they haven't paid then stop supplying them on day 8.

Yeah... good luck with that one when you're dealing with business customers. :rolleyes:

7 days would be a high risk credit account for someone who's only just managed to scrape by a credit check (normally should be pre-pay in this instance, but sometimes credit needs to be extended).
14 days medium risk.
30 days standard.

All set at appropriate credit levels for each customer.

So I would re-word your statement as "Never extend terms longer than 30 days".

If you're unable to extend 30 days to your average customer, then coming back to my original point.... your business is undercapitalised and thus you don't have the breathing room you need to deal with the realities of business.

Trying to stick EFTPOS in the face of all business customers won't get you very far either.

There are exceptions to the rule of course (e.g. if you're running a Cash & Carry warehouse) , but in general business customers equals credit accounts.

Clare Prop
1st May 2014, 12:57
I'm operating a business where I deal direct with the customer, I very rarely supply other businesses. Thank goodness. When I did I spent far too much time chasing up bad debts until my terms were that if someone paid late, the price for the next supply would increase by an agreed percentage.

It really depends on who you are selling to.

It would really help in aviation if more of the suppliers accepted credit cards, maintenance organisations for example. They say it is "too expensive" but how much work do you have to do to cover the cost of a late payer?

1st May 2014, 16:23
sitigeltfelt, it is a gourmet-food product for the wholesale, online, and special-event market. I would like to open my own flag-ship retail outlet someday. I would never start-up anything unless it had multiple revenue streams.

Good advice here. Better yet, I have already followed some of your advice.

My biggest issue was finding a commercial kitchen. As someone already posted - tons of restaurants fail - so there was no shortage of kitchens out there. However, most of the landlords wanted a 2 - 3 year lease, minimum. I did not want to chain myself to a long-term lease until I found out if my product was going to fly. I have recently secured a month-to-month lease in the bunker of a former restaurant.

I have also hired a professional business consultant. Business consulting is a business in itself! However, my guy is good (albeit expensive) but figure it will pay off in the long run. He claims a lot of businesses fail because of a poor (or non-existent business plan) and that ominous cash-flow problem many have mentioned.

I enjoy business; it is the most creative challenge of all. That is the upswing.

The downswing (should it fail): well, I tried my best, learned a lot, and did so w/o losing my shirt, as I have managed to keep my start-up costs to a minimum.

1st May 2014, 16:41
- which poses a question - what is the product? :p (the tongue to indicate 'delicious') :)

1st May 2014, 17:18
sitigeltfelt, it is a gourmet-food product for the wholesale, online, and special-event market. I would like to open my own flag-ship retail outlet someday. I would never start-up anything unless it had multiple revenue streams.

If I were you, I'd focus on B2B endeavours whilst you find your feet in the business world.

B2C punters are a right pain in the neck to deal with, both due to their human nature and the increasing levels of "handholding" legislation they get given by governments.... for example I feel sorry for businesses having to deal with the aftermath of the Distance Selling Directive where consumers get a "cooling-off" period to return (most) stuff for any reason (no need for defects ... you literally just change your mind). Wonderful for consumers of course, but must be a right pain in the backside for growing small businesses !

Just a spotter
1st May 2014, 17:41
V2 ... first off, best of luck.

From experience, the very simple & useful start-up check list.

1. Have you identified a real and definable problem/need within a defined market?
2. Have you clearly defined a solution to that problem/need?
3. Can you deliver that solution to the market?

If you answer No to any or don't know how to gather the necessary information, review your plan to identify the resources/things you need in order to answer Yes, or, in extremis, reconsider the entire venture. Do not proceed until you have "three greens".

If you answer Yes to all, then it's a good start.

Of course, business startup is more complex. A good starting place is usually a local authority or enterprise board who will provide advice if you're are a first time entrepreneur.

Good hunting.


1st May 2014, 18:41
Have cash....
Learn to say NO to customers....Tesco / big supermqrket want to buy, you want to sell retail at 2.................they will get you to supply at 55p after all their discounts, clauses, etc etc
Have cash
Put house in wifes name
Use Ltd company to minimise losses
As food business then get to know all Food testing businesses as you will need them.
oh and have CASH.

1st May 2014, 21:41
Use Ltd company to minimise losses


All well and good until the banks and other suppliers start asking you for directors guarantees because you're a new business with no prior trading history !

Also a Ltd company won't necessarily protect him in certain circumstances, for example if he kills people through food poisoning. :cool:

1st May 2014, 21:43
A good starting place is usually a local authority

Jeesus no !

Business advice from a bunch of civil servants who've never been anywhere near running their own business (and have probably never even worked for a small business as an employee) .... no thank you ! :rolleyes:

If you want "textbook" generic business advice with no sense of reality, go do an MBA or buy some books in a book shop .... you want tailored business advice from someone who's been there, done that and got the postcard and knows how tough REAL business life is, and how starting up and growing a small business for the first time is the toughest thing you're ever likely to do in your life.

1st May 2014, 21:53

The problem with that is, you are then in a situation where they might not be as enthusiastic about the product as you are - you will get frustrated if you go this way.

Especially if you have customers (Business) who sell "product" and not "solutions" and once you sell "product" or "items" you often end up in
a lowest price wins situation.

1st May 2014, 22:14
V2 are you hard working, that's a good start, but more importantly... are you lucky?

Given the one attribute and the other charm you might just have a chance... (but if you are driven you will know that you have to do what you have to do).

Good luck... :ok:


1st May 2014, 22:25
All well and good until the banks and other suppliers start asking you for directors guarantees because you're a new business with no prior trading history !

Hence house in wifes name. Giving directors guarantees is easy as companies assume its worth something...............30 companies claiming on it with SFA assets shows its worth nothing. Refusing to give one loses you more than giving one. Its a confidence thing.

Also a Ltd company won't necessarily protect him in certain circumstances, for example if he kills people through food poisoning. :cool:

Hard to prove and if using the specialists out there for testing everything then they can become involved but also ingredients suppliers and even consumers if they ignored cooking and storing instructions. Also means have good liability insurance.

1st May 2014, 22:43
V2-OMG, a school friend of my daughter's has started, about 2 years ago, a similar sort of business. She installed a commercial kitchen in her home, and did the rounds of the independently owned/franchise supermarkets. Apparently they don't squeeze their suppliers as much as the big ones. For the 'event' catering, a lot of her work is obtained through advertising on shopping centre notice boards, doing private functions.

Big retail outlets are good for volume (sometimes), but individuals are good for cash flow, as you should usually get payment on delivery, and word of mouth is the best and cheapest advertising you can get.

2nd May 2014, 00:09
Only participate in processes to which you add value!

After an excellent landing etc...

2nd May 2014, 00:12
Only participate in processes to which you add value!

But only under a blue skey scenario...

Let's all scuba in our think tank... ;)


Mac the Knife
2nd May 2014, 01:17
Word of mouth/Small ads
Hire smart people
Supervise but don't micromanage.
"Judy, this is your job for this week - if it isn't well underway by then and you're still handwaving Olu will take-over"

Keep meeting agendas manageable, no coffee, no donuts, no chairs, doors close with 3 minutes grace period. Nobody leaves until essential decisions made and assigned. Listen to important input, cut off fluff, excuses and fantasy. This is not a party.

If someone really has a supergreat idea this isn't the time to hear it - let him/her write a memo to the CEO with a copy to finance, planning, legal and Uncle Tom Cobley an all (best to talk it over with a friend first)

Have a good bookeeper (and a spare)
Don't take holidays for the first few years
"Do good Work!" (Gus Grissom)
Fire dead wood kindly but quickly
Keep an eye out for Black Swans
Be eccentric if you must, but wear clean clothes
Look after the proles - know their names & problems
Don't overstock but don't be obsessive.
So soleee! No tickee, no washee!
Be very very very careful of using subcontractors
Pay your suppliers promptly, gut-rip 'em if they're late.
If you have to borrow, have a tight pay-back plan and do it
If you then need to borrow again, get better terms.
Don't throw good money after bad
Don't tolerate pilferage - ignore the tears
Use the ombudsman
Don't waste money on (particularly on hidden) unessentials/luxuries.
Drive an inexpensive car - but keep it clean and tidy
Write contracts carefully and check 'em
Be ready for that third year big tax-whack
Don't cheat your customers - ever (though they may try and cheat you)
Explain your fee structure and why, then explain it again.
In a business relationship contact your customers regularly, don't wait for them to call you.

Know when to say No.


2nd May 2014, 01:35
There are 2 types of customers in any business -

- Those who pay your bills and overheads

- Those who contribute to your profits

Always look after both!

3rd May 2014, 15:59
I have started a number of businesses, some successful and some not. First one at age 10. Last one... not yet. They have grown more successful with practice, but one tends (perhaps stupidly) to tackle harder challenges with each new step.

Have also worked in and for a variety of businesses, from tiny to galactic, and have worked alone and in small teams to rescue or repair businesses of medium and large size that have lost their plot and foundered or worse.

One insight coming from all that is: "Starting a business" is a specialized and exotic kind of business itself, as is "Running a business" that has been well (or badly) started. The skills, perspectives, knowledge, etc. are not exactly same for both modes, even in the same business, and sometimes quite strikingly different. To do both, one needs just about twice as much skill and luck as to do one or the other. An advantage of starting small, not having debt, and being a strong learner is that it can possibly put one on the path to running the same business when and if it grows larger and more complex.

Older and wiser heads are essential to success, but pay-by-the-minute advisers, accountants, lawyers, etc. should be seen as extra-large mosquitoes that in general thrive by sucking the juices out of easy prey, especially them who are naive and desperate.

Luck, good and bad, can play a large role in survival and growth of small businesses. Don't plan for being even a tiny bit lucky... plan for being highly unlucky and then be very grateful if you are not, but do not relax this principle - ever. Instead of luck, plan to be smart. Learn and plan how to acquire (and hold onto) skills, people, products, connections and opportunities that will allow you to grow in success while maintaining visibility and managing risk so that when the inevitable down-sides, down markets, personal distractions and similar adversities come along you are prepared, ready, and positioned to gain strength, opportunity, and market share as your less-thoughtful competitors founder and quit.

Learn to know your competition better than they know themselves - even companies much larger (and smaller) than yours. Go to trade shows. Subscribe to relevant trade and supply chain publications for information to build your lists of resources and vendors, but do not waste too much time actually reading such pubs except to skim for items 100 pct relevant to you and now.

Experience helps a lot. Working for a while in companies dealing with similar markets and products might not be feasible for you at this point, but looking for individuals in markets very similar to yours, some likely to have started their own enterprise, some likely to be looking for a way to exit for reasons of age or other horizons calling. A slide into something real and knowable can be safer, more satisfying, and economically more durable than a hasty shot in the dark.

Aviation metaphors can be very helpful: situational awareness, fuel in the tanks, reserves for contingencies, multiple layers of plan for every foreseeable possibility and some extra plans for unforeseeable ones. Look carefully where you are going, keep track of where you've been, and pay serious attention to the weather. Get the zen of taxes and accounting and model everything, as often as possible, on spreadsheets rolling forward.

When you are putting your meat on the line in business, just as in the air, think sober and not optimistic. There might be more glory in dropping the space-shuttle ad-hoc into Aspen during an emergency, but - if you aren't a certified astronaut - there's more of a future in consistently greasing a Cessna onto the first few percent of some more-than-adequate runway that gets you exactly where you want to be, reliably.

Mac the Knife
3rd May 2014, 19:49
I've recently seen a highly qualified manager build up and and then allow the next door practice to slide down the hill.

Good money management generally, lots of motivational speeches and posters, just AWFUL people skills. Managed to recruit outstanding staff who would have DIED for her, practice boomed. Then nagged and nasty-grammed, pestered and faultpicked and micromanaged until until the last good one left. There were a couple of less-good eggs of course but you can often tip 'em eitherway. Eventual replacements a couple of unthreatening frightened spinsters who daren't go to the toilet without permission and immediately refer everything up the line to the manager because they're so afraid of being shat on.

Manager now about to have a breakdown but has no insight whatever into problem.

I just don't understand how people can do this. So stupid - control freaks. Best management training is enlightened Army. Carrot and stick. Someone who at first stupidly pinches pencils can learn and become invaluable (or go to gaol). Napoleon said that he could make rational people go out and die for little bit of coloured ribbon.

You de baas - spill coffee on floor, there's a time to wipe it up yourself in front of everyone. Say Please and Thank-you to people. Know when NOT to say please and be the Icy Commander. Apologise if you're wrong (pick the moment carefully). Know you chauffeur's birthday and give him a tenner; even better, know that his kid's sick and send him to your private pediatrician at no charge (chauffeurs are good informants).

Cast your bread upon the waters - most of the time it'll sink at no great loss but people will think no worse and often the better of you.

Everyone will break at some point - even your best people - do you really want to see what that point is? The answer is mostly no.

You can build people up to their best functional level (occasionally they may surprise you) or you can rip 'em down to their worst.


3rd May 2014, 21:27
Talked to a friend in last couple of days and asked how did he grow his business in gaining new customers.

His response was TALK to decision makers not the monkeys, FIND who the gatekeepers to the decision makers are and talk to them.

He has an accent that women love who are mostly the Gatekeeprs and often uses that to get to the Decision Maker.

Beware of the Monkeys as lots of them think they are the Organ Grinders.

3rd May 2014, 21:53
Of course, the three most important things with any business are position, position, position and timing.

And the ability to count.

3rd May 2014, 23:05
I can only reasonably comment on (new and existing) "small businesses" in France:

1) If the business (expects or experiences) an important percentage of sales to be paid in cash (ie. notes and coins), the the owner/proprietor should either ensure that he's always "the cashier" during all "opening hours", or else appoints another "trusted-employee" to assure this task on his behalf. (Don't confuse this with simple "pilfering from the cash-till").

2) If the business also experiences an important percentage of sales to be subjected to say "special government dispositions" such as allowing customers to be invoiced without paying VAT, then he should ensure that the company has sufficient procedures to both record such sales and justify all unpaid VAT.

3) If the business experiences both above, in addition to the owner doing his best to hide "cash only" transactions, camouflaging and hiding other transactions in 2) above, say, attempting to hide VAT-paid sales with VAT-exempt sales, then the owner becomes ever-reliant on another "trusted-employee".

What is a "trusted-employee"? Someone who conducts your business and in your interest even when you're absent. They know much about your business. You fire or attempt to dismiss them at your peril.

Others who help to run your business (those you should fear):

1) Your "IT expert", he who looks after all your PCs, the server, the software etc. (the "IT expert" will always have more access to company files and the network than even you do). Which is why most such "IT experts" are usually external to the company and cost so much.

2) You considered hiring an outside "IT expert" too expensive, prefering to bribe one of your own employees to assume the function. I gave up when it stopped being fun. And started taking up too much time (in addition to the real job I was paid for) after the boss fired the "IT expert" I was both friendly with and respected.

3) Your accountant (the one who prepares the company accounts which are sent to the authorities) each year.But in France at least, most of those "certifying" the accounts of their clients "fear their clients" more than they fear the French tax authorities.

4) All (most) of your mates (usually at the local casino) or at the nice restaurant you invited them to and intend paying for using your company credit card.

At the end of the day, "you've managed to hide so much of the profitability of the company over the years" that noone would buy the company based solely on the official declarations made to the tax authorities. It's worth almost zero in fact. Anyone who bought it might be faced with several years' worth of false VAT declarations to start with. Without all these, the company might well be worth your 25-30 years' past efforts?! You could always try selling the company on to someone else who're familiar with the circumstances I guess.

Except. Remember all those (ex.) employees in whom you once (had to) trust?! You made the mistake of getting rid of some of them under questionable circumstances. It sometimes takes a while even for well-rewarded ex. employees who've not merely sacrificed their fellow employees, in addition to everything else to offer to repent. Which can often encourage others involved to also come forward. For sure, it doesn't help that the owner always believed that any offences (whether simply to the State and tax authorities) were subject to 3 years afterwards.

In fact, as most of these are criminal offenses in France, the company owner would (will) be subjected to prosecution on all and most offenses going back to at least 1994. And all because he didn't respect his most "trusted-employees"...?! Made whoppee in the good ole days at the expense of his employees. And today expects them to make additional sacrifices...?!

What embarrasses me most is that the French govenrnment (most European governments in fact) somehow hail these folks as simple "entrepreneurs", and make available generous resources and aid for what are to me, simply irresponsible company founders whose companies existed for so long simply because their employees feared losing their jobs...

4th May 2014, 01:58
With regard to cash-flow...

On all of my contract T & C's it clearly states (amongst other things) that:

1. All initial orders must be paid in full prior to production
2. 21 day terms available on repeat orders

I have 30 day terms with my suppliers and will only accept payments from customers by either Bank Transfer or by BACS payment.

The problems I used to have are now non-existent.

4th May 2014, 02:05
If it is a porn business make sure the girls have peaky Protestant tits...


4th May 2014, 02:17
Way to go PingDit?!

Even if the UK eventually leaves the EU, you'll be able to continue selling your wares to the common-wealth nations, including India.

Beats having to translate all the installation / operation instructions in all official 14(?) EU languages?! Relying on the ex. common-wealth nations as David Cameron prescribed a few months ago, merely requires you (in the case of India alone) to reproduce this same documentation in several 10s of variations of Hindi, Tamil, Bengali etc. Good luck to both you, David cameron and the UK "going it alone"?!

PS. Please don't start your installation / operation manuals addressed to the Australian / NZ markets with: "My fellow sheep-feckers..."?! They may well have a generous sense of humour but... ;)

4th May 2014, 05:16
I think one is either capable of running a small business or one's worldy (or sheltered) experience means one isn't.

Seen a lot of "kids" of my generation inherit daddy's business and make meal of it (rich dad, poor dad). Seen the opposite too although less frequently.

The best business I ever saw was run by a cheery little Jewish bloke who would operate inside the horse betting shop and approach punters offering to buy their winning tickets for more than they paid out. Of course he was laundering money but there was nothing illegal about his actions inside the shop.

I know of two people who each started a very successful business only to be kicked out by their own board. Seems to happen quite a lot I'm told.

One thing is for certain when you put yourself in the ring, sharks patrol the waters.

Morphine - Sharks - YouTube

4th May 2014, 08:57
Always promise low and deliver high. If you promise something for 2 PM and deliver at 3, you are a bum. If you promise the same thing by the end of the day and deliver at 3, you are a hero.

Meetings? Always (always, always!) have an agenda. Detail one person to prepare agenda to be circulated not later than COB the day previous. Same person to note action items (who, what, when) for circulation not later than COB. Rotate this responsibility. If you don't have an agenda, cancel the meeting.

Always start on time, if you make a habit of arriving 3 minutes early, they will to. Somebody raises 'any other business', carefully note it down and put it on the agenda of the next meeting.

5th May 2014, 00:36
If you have a budget for advertising - double it, now. 'Tis verrry expensive.

5th May 2014, 03:45
Wow! Thank-you everyone for your suggestions. I am going to copy this thread and put it up on my office wall.

Someone wanted to know what my gourmet product is. If I divulged too much, it may be construed as spam, and the whole thread may be deleted.

However, I can tell you that it is generally considered to be a venerable confectionary item. I am going to tweak the marketing and ingredients into the realm of gourmet.

Besides your good advice - my business mentor is Voodoo Donuts. (My product is not a donut, but I love how the took something generic, and pumped it). People come from all over the world to visit Voodoo Donuts!

Anything is possible.....with a good cup and a half of innovation and creativity!

Voodoo Doughnut, Portland, Oregon. - YouTube

5th May 2014, 04:16
My only confectionary addiction.


Solid Rust Twotter
5th May 2014, 06:05
Someone wanted to know what my gourmet product is. If I divulged too much, it may be construed as spam...

Gourmet spam? Now there's a thing. Should be a great market for it in Hawaii!:ok:

It had to be done.:}

5th May 2014, 08:27
Watch the banks. I had a contract with a Canadian company through their Californian office. E mail an invoice to California on Tuesday: California approves it and the accounts people in Canada do a bank payment run on the following Monday, their usual day. Despite electronic transfer, the money wouldn't arrive in my account until at least the following Friday. My bank blamed the Canadian bank and the Canadian bank blamed my bank.

When the customer changed banks, the payments came up short every time - the new Canadian bank were making a charge for foreign transfers that they had not mentioned when the change came about and were taking it off the transferred amount! That led to a number of unhappy suppliers.....

5th May 2014, 10:15
I have been self employed for nearly 45 years, a simple thing I was told I have stuck to and it seems to work,

Do not employ your Wife,

Do not employ any friends,

Do not employ anyone who wears Shiny Shoes

Do not employ ex Directors of other companies

Do not employ ex Bankers, Ex Solicitors or failed Accountants

Do not employ people who wont look into your eyes when talking.

Do not employ anyone who spends more time talking about their "Degree" than answering your questions

Do employ people who can show you what they have done

Do employ a secretary who looks like a Horse(they are normally really good)

Do employ people who prove they can be trusted.

Then get about building ya business and Never letting customers down!

Dont ever turn up to a customer late, or in a Flash Car, or stinking of last nights good nite out,

Dont ever do business at a Bar .

Base your company in the British Virgin Isle or Jersey(CI) that way what you make.... you keep.

Send me an e mail when you need any help, and I'll put you in my appointment book! after I have sent the Proforma invoice!!

Peter R-B

5th May 2014, 10:31
Only three golden rules from me:

1. Take advice (which OP is doing) BUT ONLY FROM THOSE WHO HAVE DONE IT.

2 NEVER allow a bank to have any say, influence or power over your business

3. Spend twice as much as you think on marketing

Effluent Man
5th May 2014, 10:43
On (3) There is an old saying that half the money spent on advertising is wasted,the trick is in knowing which half.

5th May 2014, 11:00
Do not employ anyone who wears smart suits and ties, or who speaks/writes 'MBA' type gobbledygook bullshit. My attitude to these gentlemen and ladies is that if I can't understand what they're saying, it's their fault, not mine.

So basically at the end of the day if their strategic game plan does not seem sexy to you when they run it up the flagpole to see if flies, and is not a good strategic fit from your paradigm ......... WALK AWAY.

5th May 2014, 14:03
Meetings? Always (always, always!) have an agenda. Detail one person to prepare agenda to be circulated not later than COB the day previous. Same person to note action items (who, what, when) for circulation not later than COB. Rotate this responsibility. If you don't have an agenda, cancel the meeting.

Husband of a friend some years ago relocated to Japan for 3 years in a Joint Venture, every meeting he saw that last meeting minutes were changed and people never did as they agreed to. It was a Japanese cultural thing to make sure everybody saved face.

He took control of agenda and minutes.

After 1st meeting of doing this everything started to get done as nobody wished to be the one to turn up not having achieved anything as that would mean losing facing among peers.

In short, set Agenda and understand Culture differences and use to your advantage. Use what ever is needed to win.

5th May 2014, 14:15
And always remind your staff that the beatings will cease only when company morale improves... !


5th May 2014, 14:19
I would agree with a lot of stuff given here especially to keep clear of banks. My own business was built using generated cash all the time and when I sold it we owned everything outright and had no debts, you would be surprised hoe attractive this was to buyers also meant that I kept all it was sold for (less tax etc. of course)

One thing that has not been mentioned that I did from day 1 was to make a spreadsheet with 'what if' scenarios in it and I maintained it always. I had every event I could think of from loosing a customer to major things that could have bankrupted me. Some of the scenarios were catastrophic but by playing them out on my spreadsheet I was able to decide the best course of action should anything happen and on the inevitable 4am awake worries I just went and played things out on the computer.

It worked for me.

Finally some advice that was given to me by my boss when I got my first management job "the jobs all right, it's the people that will fck you". And he was so right.

5th May 2014, 14:23
Re 3, marketing, use the internet to your advantage.

You don't have to sell over it to help it market your business.

ie ebay - some businesses have an ebay store solely to get the name
and address out there. Ebay can be just a marketing tool.

Use internet forums.

5th May 2014, 14:26
Sadly I missed off my list,

We, that is the English, British, Anglo Saxons have a friendly way of saying tings, and making verbal agreements

Like:- "Well it possibly may cost say 1000.00"

or "It might be around 1000.00" Or "it might be about 1000.00 or thereabouts

Experience has taught me when dealing with Johnny Foreigner especially the European type who feel they run the EU, it is better to be spot on positive IE:-

It will be 1000.00......

I started dealing in Europe about 1984 and found initially that my prices were always being scrutinized and argued over, after about a year I was told by a gorgeous Flame haired well built Tutonic secretary to a well known German transport company, that I should rephrase my words when quoting for the contracts I undertook, by using the friendly British standard type of speech and writing I was leaving myself open to be questioned, so being bold I altered my writing to match my bold Lancastrian words, and ..Hey presto contracts were awarded as the verbals,.... agreements were then easy and never again did I have any discussions after the event about my invoiced prices,........and another thing ALWAYS get payment in the currency you want not the other way about..!! .

Peter R-B

5th May 2014, 16:02
I have printed out this thread, am going to have it framed, and it will grace the walls of my office. One day I hope to open a flagship store; I will put it up on the wall of that store - with an airplane dangling from the ceiling. Kewl!

Thank-you so much for your invaluable advice!

Meanwhile, back at Voodoo Donuts......how many times do you see a line like this outside a donut shop? (link below).

The founders make me laugh. Late-night Voodoo tends to attract the insomniacs and those who have imbibed. So, they came up with the Nyquil and Pepto Bismo donut! They were selling well.....until the FDA told them they can't put an over-the-counter drug on foodstuff.

Gotta give them credit, though, for thinking up the unthinkable!

Voodoo Donuts of Portland - Best donuts anywhere, if you don't mind waiting in line - YouTube

5th May 2014, 17:21
One thing that has not been mentioned that I did from day 1 was to make a spreadsheet with 'what if' scenarios in it and I maintained it always. I had every event I could think of from loosing a customer to major things that could have bankrupted me. Some of the scenarios were catastrophic but by playing them out on my spreadsheet I was able to decide the best course of action should anything happen and on the inevitable 4am awake worries I just went and played things out on the computer.

I'm amazed that it took until the fourth page to find this sage advice from funfly. Until your major supplier has had a fire, you think it won't happen to you. It will! The car industry for a long time operated with 80% of any part from one supplier, 20% from another. That way, both products were qualified, and the supply chains in place. Any problems at 80% and the other is ramped up until another is found, or 80% is back on line.

Do any trials and qualification of alternative products before you have a need for them (recipes may need tweaking slightly to maintain the flavour and texture of your product). Also ensure prices and deliveries are confirmed in writing before the need arises, otherwise Supplier B's prices may mysteriously shoot up when they get wind of the fire at Supplier A.

From my own experience, certificates of conformity are not worth the paper they are written on. Make it clear to your suppliers that you will be checking the quality and quality of everything that is supplied. Anything substandard is to be replaced free of charge and compensation for the time wasted by the substandard product is to be recompensed Only when suppliers prove themselves beyond reproach should you take their word for it. I've found it in the aircraft industry and it evidently happens in the food industry (Tesco et al & horsemeat).

5th May 2014, 20:29
Employees should FIFO (Fit in or F*** Off). Arranging the business around the needs of the most junior employee...

Clients: Can you afford it if the biggest account fails? They can, and do.

Are you still working at 9 pm? Why not?

Plan ahead. Then plan some more.

Exit strategy? It might be modern PC gobbledegook, but where is your business going?

Your business has to be better than the competition. Half of them are below average, so it can't be too hard...

Good luck!

6th May 2014, 17:25
Once you've got the new company start-up "off the ground", consider all possibilities before expansion as per this BBC report (http://www.bbc.com/capital/story/20140501-how-the-rich-stay-rich) (or consult your independent financial advisor who can steer you through all the pitfalls... :}

6th May 2014, 20:19
Use internet forums.For sure.
My website doesn't get a gurgle front page unless you do a very specific search, but I post often on a hobby woodwork forum that does hit the front page, and if people go into the sub-forums of the things I make (boxes, furniture), you're pretty sure to find a post by me, with nice pics, lots of 'likes' and links to my website and farceberk pages. I reckon at least 50% of my new clients come to me this way.

6th May 2014, 21:29
It's a huge step to go from the level of "partners" in the enterprise to the hiring of employees. Having employees opens you up to a whole host of threats, mostly governmental and regulatory, with the power to crush you like a bug on the whim of a clueless bureaucrat.

My sister's husband had a thriving general contractor business destroyed. As he was industrious and perceptive, he continued to make an excellent living doing handshake jobs under the radar. But he has since maintained that it is impossible to follow the rules and make a living trying to build a small construction business in Michigan.

6th May 2014, 21:33

Yes, Facebook has certainly taken off as a great marketing tool.

As has ebay.

They have also substantially lowered the cost of marketing to customers.

6th May 2014, 23:29
Gourmet spam? Now there's a thing. Should be a great market for it in Hawaii!

... it already exists - in South Korea. ISTR comes in an exclusive 'black label' can. Honestly ...:ok:

29th Aug 2014, 17:23
I did print-out all your replies and they were then posted on the wall of my office and commercial kitchen. They were a great inspiration, and I did heed a lot of the advice.

We just cut a deal with a supermarket; our food product will be on their shelves in September. We are currently negotiating with another food retailer and a pub/restaurant chain.

Have hardly had time to breathe - miss you guys!

But...thank-you! Thank-you! Thank-you! :ok:

29th Aug 2014, 17:39
Well done!:D:D:D


29th Aug 2014, 22:25
Cash flow, yes, but ABOVE ALL

2 NEVER allow a bank to have any say, influence or power over your business

This is the absolute No 1 axiom.

A bank will suck all the profit out of your business and then, when you are almost dead in the water, call in its loans when it knows that you have just enough left to pay them by realising your security, ie selling your house at fire sale value, but no more. It will do this without any remorse; it doesn't give a s**t about you or your business, it will have squeezed you dry and then lost interest.

Bankers know absolutely nothing about running a typical small manufacturing or service business, and any advice they offer is aimed at increasing their revenue from your business. Most of them cannot even read a set of management accounts.

If you cannot start your business without a bank loan, you are easy meat for the bank, and they will welcome you in, lend you money against your house, and then fleece you. Don't do it. Get a job, work freelance, do anything except borrow from a bank.

Bitter from personal experience? Yes of course I am. It cost me nearly all my savings, 15 years ago, but it was a lesson worth learning and passing on.

30th Aug 2014, 08:39
Banks have been pulling businesses down for years to get the assets. Midland Bank (now HSBC) put the profitable company Kerr Stuart and Co into liquidation to get the assets - and that was in the 1930s! When I started my business, it was with a reasonable amount of cash in hand - enough that the bank moaned about it being in a company current account. That helps.

I had two customers, neither of them UK based, for my consulting work. In the end, EU legislation on Gender Equality and Solvency 2 meant that I had to take my pensions or lose up to 20% of them: that increased income put me into higher rate tax so that 49% of every day's income went to the government. Not an attractive situation, so I shut the business at the end of the contract periods and retired.

If you can afford retirement, do so.....just make sure that you CAN afford it!

Lon More
30th Aug 2014, 10:57
Start with a large business and let the banks get their claws into you as previously suggested

cockney steve
30th Aug 2014, 12:09
My last business.....I did the research, made up the Business -plan, phoned various banks with the proposition......It was freehold property and I was putting in ~ 30%...plus I had a freehold house that covered the whole business x2

Naff Wets promised the earth and said there was absolutely no way they would take a charge on the house......come the meeting, that was out of the window and the interest -rate had gone up a couple of points....and their method of calculation bore little resemblance to the true , exhorbitant rate.

I thanked them for wasting my time and informed them they had cemented my resolve to close my account and move elsewhere.
I then did a deal with thr OLD, ETHICAL RBS. It wasn't long before "Fred The Shred" screwed it and it's customers.....every time I queried outrageous charges, they were immediately reduced by 50%
I still keep a small Current Account there. Ireally hope it costs them to maintain it!

Nowadays, there are innovations such as "Crowdfunding" Were I looking for business- capital, that would be my first port of call.

The present banking system is run by greedy amoral parasites. it is unfit for purpose. their obscene plundering of excess "profits" many of which were paper lies, showed that interest rates bore no true relationship to risk. legitimised thieves . Unfortunately, the counter-staff and spineless, powerless "branch managers" have to bear the public's ire.

Lon More
30th Aug 2014, 12:39
I've just transferred a not inconsiderable sum from my Dutch account to my UK one electronically. The money went off my Dutch account immediately and arrived on the UK one a week later. I queried this here, the money was transferred to the UK within the hour and the robbing bar-stewards at Canary Wharf sat on it for a week using it to earn their bonuses

30th Aug 2014, 13:14
As a post-script; In the immediate aftermath of 9/11 some cretin in the management of one of the major banks (I'd name it if I could remember which!) decided that airline insurance premiums would rise to the point that no airline could afford them. This decision was made after the Government announced that it would underwrite all additional risk so that premiums remained the same. The said cretin(s) simply could not understand the Government announcement, which would have been clear to a 10-year old.

So they promptly called in a loan made to an airline in the North East of England that was well on the way to a full recovery; apart from good passenger revenue it has just signed a contract for postal services. Indeed it was so successful that a well-known venture capitalist had agreed to invest 3m (I think it was) to finance expansion. The money was in the process of transfer.

The loan was 45K; peanuts. The bank demanded repayment within 24 hours, but failed to communicate the demand until 12 hours of the period had expired, coinciding with the business day, of course.

They made no effort to contact the MD, who would and could have paid it from his savings. The following morning they called in the Receiver, and announced to the world that the airline was bankrupt. As always, that announcement closed all their credit accounts for fuel, aircraft were seized, and the airline was destroyed.

The senior manager concerned, when the airline's MD finally managed to get through the defences and force him to speak, merely kept repeating "It's our view that you cannot survive the insurance increases. I haven't seen anything from the Government underwriting the risk. We have a right to demand the loan back, we have demanded it and you were unable to pay within the time given, so we had no option but to call in the Receiver. Goodbye."

Some of the detail is fuzzy in my mind, but that's broadly the story. But here's the point; there was no ulterior motive in the bank, it was nothing more than sheer moronic stupidity by senior managers , who totally misunderstood the problem in the first place, were unable to grasp the Government's intervention and its effect, could not understand the airline's accounting statement and balance sheet, could not understand that a VC had invested 3m after rigorous assessment, in short were utterly clueless about anything financial.

Have things improved? No. I am in the middle of a row with the Co-Op Bank about a relatively very trivial matter, but in the course of it I have come to realise that the people I am dealing with, including quite senior ones, have ALL the failings listed in the paragraph above. They are stupid, process-driven idiots; not one can understand company management accounts, and they are being jerked around like puppets by those above them.

1st Sep 2014, 01:44
Only from my experience.
Write bussines plan. You may use whatever fomat to include different topics it is entirely up to you. But write on paper :
1. What is your aim with this bussines
2. Way how to reach
3. SWAT analyses, helps a lot. To positioned yourself and your product.

Take care about mangement of bussines plan. Some things must be reserved to your eyes only. It excludes pc or any other electronic device. Write it on paper!
Writing down bussines really improved my private bussines. Altough I am the same one and my colleagues as well.

31st Oct 2014, 05:34
Hardly have had time to breathe. If you thrive on 20 hour work days - start your own business. Many nights I can't sleep anyways - yes, cash flow is always a challenge.

However, we have been short listed as one of the swag-bag suppliers for a major American awards show. (We were discovered at at a recent trade show).

You probably don't believe me - who would? I can barely believe it.

Thanks again for your advice.

31st Oct 2014, 08:01

Well done and also for being brave enough to take the leap. :D


31st Oct 2014, 08:01
If you thrive on 20 hour work days - start your own business. Many nights I can't sleep anyways - yes, cash flow is always a challenge.

Yes, that's what many people gloss over .... they all shout "write a business plan" ..... but then they make no mention of the harsh realities of running a small business (well, I did, on this forum when you first asked the question !).

Sure you should have some sort of "business plan", but don't waste months writing a bunch of waffle that is nothing but a theoretical projection that is likely to be biased and heavily-optimistic. Maximum 10 pages of A4, but quite frankly for you average small business in an unregulated sector, maximum 5..... concise, to the point, cover important points, but don't waffle.

I bet most small business "business plans" don't even think about the really important topics, such as the two you outlined...cash flow, a limited number of people being everything from "top dog" to "bottle washer". And to be honest, they probably can't... since those are realities that are difficult to plan for when you're busy dreaming up a new business .... hence my point about keeping "business plans" de-minimis.

Keep up the hard work V2-OMG!

31st Oct 2014, 09:15
Excellent! Fantastic news. Now, repeat after me......if you need to finance your growth, DO NOT GO NEAR A BANK.

A lending bank will take what you have created and destroy it, while lining their pockets with your money. When you have none left, they will call in the Receiver.

31st Oct 2014, 09:18
Hello...What type of business you doing ?? I am looking to expand my business !!
I am currently dealing into Air Charter,Air Ambulance,Ground handling,Permits, etc based out of India.

31st Oct 2014, 09:30
When I sold my business nearly 10 years ago I had a number of banks telling me the best way to manage my 'wealth'. This,of course, on top of advice from friends and family.
I ignored them all and with much "tut tutting" from everyone I did my own thing.
Now, looking back, I can see that had I followed any of the advice offered by the banks, I would have been in serious trouble by now.


That's advice from a man who built up a large successful business.

2nd Nov 2014, 12:29
It pays to remember that no-one in a high street retail bank in the UK, from the Manager downwards, has any knowledge or experience of running a business; most of them can barely understand a typical set of management accounts.

I am constantly bemused by the way they offer their "advisory services" for which they are so comprehensively unqualified. (I'm equally bemused by the fact that people take up the offer without checking out who is providing the "advice", but that's another story.)

Retail banks' staff are trained for five things so far as businesses, especially small businesses are concerned;

1) Maximising the Bank's income from their victim's account, by lying and cheating, thereby removing profits from the company, making it necessary to borrow to restore working capital.

2) Ensuring that the loan is secured on an asset that's unconnected with the business, usually a Director's house, for which the fire-sale value will probably be 5 - 10 times the amount of the loan.

3) Calling in the loan for no good reason, at the drop of a hat, without warning, so that the bank can acquire the security immediately to sell to a "buyer" owned by the said bank at a value equal to the loan, which this company, ie the bank, then sells at an enormous profit.

4) Telling their customers to contact a call centre in India about any problems or complaints, apart from those occasions when they might be able to sell another product, using deception as required to do so.

5) Making young, personable female members of staff stand around near the door to greet any man who comes in and give him wrong advice about who to see and what to do. Women customers are normally spared this treatment.

PS....Where I'm coming from is that it has taken me 16 years rebuild a successful, debt-free business after being shafted by a Bank doing everything I have mentioned in this thread, and left with a huge debt. I managed it only because I use a selection of 3 banks to store the cash we need to maintain operations and provide certain payment services eg BACS etc. They are all an incompetent bunch of wasters, but unfortunately it is not possible to operate without them. Hence the 3 banks, to spread the risk, and I minimise the amount in each. Each of them would shaft me again if they could, as they would any customer.

2nd Nov 2014, 18:56
So I would re-word your statement as "Never extend terms longer than 30 days"

And don't deal with the likes of Tesco either. Last I heard their payment terms were 120 days and if suppliers don't like it then...too bad, no orders. A bit much really when you consider they are primarily a cash business.

2nd Nov 2014, 19:05
And don't deal with the likes of Tesco either. Last I heard their payment terms were 120 days and if suppliers don't like it then...too bad, no orders. A bit much really when you consider they are primarily a cash business.

Not only that, but said suppliers have to pay Tesco for space in their stores ! ("listing fees", "slotting allowances","pay-to-stay" etc. )

"win-win" if your name is Tesco, not so much if you're the supplier !

2nd Nov 2014, 19:46

That's advice from a man who built up a large successful business.

What about entities such as Funding Circle ? Maybe there's a catch, but it seems like a fair way to lend and borrow for businesses.


2nd Nov 2014, 19:51
What about entities such as Funding Circle ? Maybe there's a catch, but it seems like a fair way to lend and borrow for businesses.

Fair way to borrow.... maybe ... (although I'd call it "fairer" rather than "fair")

As for lending, not really attractive .....most offer poor returns to lenders after tax, inflation and risk is taken into account. I've said more on the topic previously in this post (http://www.pprune.org/jet-blast/534814-peer-peer-lending.html#post8338664) back in Februrary, in essence most P2P lenders would be better off mastering the equity markets instead.

3rd Nov 2014, 09:31
Equity finance is fine; the financiers are sharing the risk with you in the hope of sharing the profit. All the different ways of acccessing that are good, and they include "crowd-funding" and the various outfits which channel small investors' funds into small businesses, spreading them among several to mitigate the risk.

Just make sure you retain control.

The sine qua non is that you have a potentially prosperous business with a realistic plan that you are demonstrably capable of bringing to fruition. You also need a realistic assessment of the value of your business at it stands. Investors want to make a profit commensurate with the risk they are taking, from both growth in share value, and dividends. They can't do that if they pay too much for the shares, so they won't. Watch Dragons Den to see what I mean; people come on to that with a fantasy value for their fledgeling businesses, in most cases, and get kicked out pronto.

5th Nov 2014, 01:17
Interesting advice - thank-you. In between the exhaustion, I am eating it up.

I dumped my high-priced "business advisor" and his "retail plan." Business does not have to be complicated, i.e. I walked into an establishment yesterday with my product, the merchandise manager took one look at it, and ordered 100 units (to start). They want me to tailor the product to their branding and said they would then increase their order to 500+ units/month. So, why the h*ll do I need a "retail plan?"

I have three more retail meetings tomorrow. One is with a company who also wants to buy my product then rebrand under their name. I did not want to do this initially, but you have to be flexible to survive. I guess that would be my #1 piece of advice at this point - be flexible.

My second one would be the value of relationships. Business is all about relationships.

Will keep you posted about the possible Awards Show thing.

5th Nov 2014, 01:19
One more thing.....about those business plans. They should not be written in stone!

5th Nov 2014, 07:25
My second one would be the value of relationships. Business is all about relationships.

As I've said before on this thread....

Yes, but ..... ***BUSINESS*** relationships .... friendly, but not friends.... keep things arms length and professional at all times !

That applies across the board to suppliers, customers and staff.

Never, ever, cross that boundary. It will, not might, come back to bite you in the backside if you do !

5th Nov 2014, 07:59
A bit much really when you consider they are primarily a cash business.

Hear bl00dy hear. Retailers -whether food or fashion - are the top of the food chain as regards cash. I've already had a row with one retailer about their attempt to introduce 'terms': I'm shortly to have another.

Apart from the fact that it's suppliers who have 'terms', not purchasers, the retailer is building and/or operating their business on someone else's cash flow. (Alarm bells may well start to ring at this point). No doubt there are accountants somewhere who think it's a good idea; the rest of us know it as 'taking the p1ss'.

Curious Pax
5th Nov 2014, 11:47
Surprised that no one seems to have mentioned knowing how much your product costs to produce as a fundamental tenet of business. That's not just the raw materials cost, but overheads too. Only by knowing that can you know whether you are pricing to make a profit.

5th Nov 2014, 12:05
Surprised that no one seems to have mentioned knowing how much your product costs to produce as a fundamental tenet of business. That's not just the raw materials cost, but overheads too.

Erm, isn't that what the foundations of a business plan do, make you think about all the expenses ? :cool:

But assuming you've got your pricing right, the mistake many SMEs make is being undercapitalised which leaves them struggling to deal with the harsh-realities of business. "Cash-flow issues" are often just a by-product of being undercapitalised. Being well capitalised enables you to ride the waves instead of capsizing !