Cleaning up in the den

With a nervous start, Tony Earnshaw and Steven Pearson pitched for £100,000 investment in their industrial cleaning business UK Commercial Cleaning Services Ltd. This was hardly an exciting sounding business proposition, but the duo were making money and growing fast in a very competitive field. Very quickly Tony and Steven showed competence, vision, commitment, drive and passion.

But it all then started to fall apart when detailed questions were asked about the finances. Deborah, Peter, and Theo quickly dropped out when it became clear that the guys weren’t completely on top of their numbers. In the end, Duncan’s offer of £100,000 for 35% of the business was accepted.

There are a lot of things you need to get right to run a successful business, and these are all really, really difficult. I would argue that if you are a rapidly growing, profitable business and there is sufficient working capital in the bank, then actually keeping on top of the numbers day to day shouldn’t be at the top of your personal priority list. In this situation sometimes it is all you can do to keep things on track. You focus on fixing problems and making sure that the wheels don’t fall off and if finance isn’t a problem, then it is difficult to make the time to give it much attention.

(Of course, it’s a very different thing if you are struggling to make a margin and are burning through your capital; then you need to be really close to the numbers.)

Assuming that there isn’t a gaping hole in the accounts (they had been running the business for three years with no external capital, and they had money in the bank, so a quick litmus test suggests that the there wasn’t), Tony and Steven had proved that they could do all the difficult stuff. By comparison solving the accounts problem was dead easy!

As Theo said to me when I was in the Den, “business is all about people” and I’d want to invest in Tony and Steven!