100 Stories of Growth - Insights from Entrepreneurs

37 36 THOUGHT LEADERSHIP SMITH & WILLIAMSON PRACTICAL FINANCIAL MANAGEMENT • Make sure that you – or someone you trust – are keeping the financial score in your business. Don’t penny-pinch on the management of your financial position. • Keep proper ‘books of account’ electronically or otherwise, so that accurate financial data can be extracted easily and efficiently. • Prepare integrated budgets and forecasts to predict your expectations for the business. Challenge your assumptions and beware of errors and omissions. • Prepare monthly management accounts and review these against your budgets and forecasts. Investigate variances and consider whether corrective action is required. • Implement daily or weekly reporting to keep management abreast of key financial developments and KPIs. Use this information as a management tool to help you run your business. • Monitor the key financial ratios in your business and investigate any unexpected changes. • Control and protect your assets and, where possible, build reserves to strengthen your balance sheet. Don’t forget your intangible assets. • Choose your customers carefully and keep your debtors under control. Our debtors deliver the cash that drives your business. • Prioritise areas for investment Make investments that will increase the capability or profitability of the business, helping you towards the attainment of your vision. 2 FROM ENTREPRENEUR TO LEADER • Clarify role definitions and expectations Ensure that everybody understands their role and is adequately qualified and trained to carry it out. • Develop trust through delegation Don’t be a hero or a meddler. Trust in people to make decisions and allow them to do their job. • Go away Get away from the daily routine of the office operations: network, meet potential partners and customers; take time out to strategise. • Consider your instinct Always pay attention to your first thoughts, your instant responses. • Seek out and consider the opinions of others There is always more than one view. Be flexible and open your mind to the wider possibilities. • Balance thinking and debate with data Carry out your detailed research and base your decision- making on firm foundations. Try to be objective and unbiased. • Never defy your instinct Think of a time when you ignored your instinct. Remember how it felt and what happened . 3 VISION AND STRATEGY • Define your vision Describe in one or two sentences what you want the business to look like in three years’ time. • Identify four or five factors that are critically important to achieving your three-year aims. What does success really hinge on? • Identify your tactics for year one, such as important actions that will ensure your future success. • Consider what could go wrong and include tactics that will reduce or manage these risks. • Involve your senior team to yield additional insights and ideas. • Remember that a well-developed strategy achieves nothing without effective implementation. • Allocate time at management meetings to ensure that the big picture is not forgotten. 1 The six building blocks for scale-up excellence THE BOARD AND MANAGEMENT TEAM • Have you hit a glass ceiling? Consider the management changes you should make to overcome this. • Don’t underestimate the importance of a senior finance person Always hire the best person you can afford for the job. • Don’t try to build your dream team overnight Take your time. • Consider areas where non-executive directors could bring benefits Get a great chairman. • Remember the personality types Don’t suffer dominance, bullying or yes-men. • Regularly evaluate your team and the individuals within it. • Don’t waste time in unproductive or poorly planned meetings. 4