Following on from my last blog and boring as finance is, you need to understand it, refer to it and use it as your guide for making profitable growth decisions. It only takes one day of really great focus a month to understand your businesses finances. Additionally make sure to use the experts when you need them for the specialist expertise they should bring to save you unnecessary costs.
In the early days of a business you must take advice on the best possible set up for your firm and shareholding, particularly now when employee share schemes can make a significant difference on both recruitment and motivation.
In the early days I believe the most powerful financial lessons I learnt was through doing my own accounts. Albeit, I took them in monthly for a check up by a proper qualified accountant – with this partnership in mind I really learnt how the cash-flow worked in my sales cycle. I planned well the demands for cash and growth support and I made solid profitable prioritised decisions.
As a small company grows, like many service providers we outgrow expertise, moving onwards and upwards. I moved from a local small private firm, whom had cared for me brilliantly giving me tax advice at start-up as well as support when presenting to the bank for an overdraft to give credibility to my plans. (I also in-between made the dreadful mistake of trying to cost save – working with a one man band whom gave me no value.) Then on to Grant Thornton at a time when I felt I needed better international accounting advice and more in depth support regarding inter-company trading regulations. It is also true that as a business grows the credibility of the firm and brand you are using for accountancy adds value.
As the business became more complex, going into manufacturing, learning about depreciation and other practices I needed a firm whom had a broad breadth of experience and some international foundations. By then we were exporting more, Pacific Direct had acquired a Czech manufacturing business, started manufacturing in China and were selling in more and more countries with some currency complexities.
Finally when I sold Pacific Direct the importance of having solid good private advice regarding my own tax position, that of my family’s new wealth and the best ongoing structure for future investment considerations has been another lesson in the services accountancy firms offer. I would never-the-less state, irrespective of all of this the importance of having great financial controls, reporting capabilities and a brilliant finance brain in the business, (not mine) even if you can only afford a part-time FD it is a price worth paying.