Top Ten Challenges – Sensible Decision Making
For this challenge I’ve turned to Gavin Meikle. I’ve known Gavin for a number of years. His mission is to transform the way people communicate in order to build a happier, more effective and more sustainable world. Communication, or rather a lack of it, is the root cause of most conflicts, be they commercial or personal. By helping people understand how small changes in their communication can deliver big improvements in their results we are doing our bit to make people happier, more confident and more successful. We are both inveterate networkers…
Prior to setting up his training company, Gavin had a long and successful career in the Pharmaceutical Industry as sales representative, sales trainer and sales manager.
In parallel with his career, Gavin was an active member, trainer and leader within JCI, the international self-development organisation where he developed his training skills, teaching workshops extensively both in the UK and abroad.
During his corporate career, Gavin became aware that good communication was at the heart of business success and poor communication was the cause of most of its problems. His curiosity aroused, Gavin began to study the psychology and the skills behind effective communication and, as a result, formed Inter-Activ presenting & influencing to share his knowledge with a wider audience.
Gavin is an inspiring public speaker and continuously develops himself and others through his active membership of two Toastmasters Clubs: Solent Speakers in Fareham and Spinnaker Speakers in Portsmouth
I’m going to let Gavin have his say:
Sensible Decision Making
When Colin approached me to write a blog post on sensible decision making, I was flattered, and then I thought, is this man out of his mind? I’ve been running my business for 21 years, and I’ve made many stupid decisions along the way. And then I thought, “If I have survived this long, they can’t all have been bad, can they?” So, based on the premise that we learn more from our mistakes than our successes, I decided that I was uniquely qualified to write about this topic, so I agreed.
When I left the “safe-haven” of the pharmaceutical industry to set up my training consultancy at the end of 1997, I knew a lot about training but little about running a business. I sought advice from friends whom I trusted and who were already running successful companies. One was a lawyer, and the other was an architect.
Get An The Right Accountant
Both advised me to get an accountant to help with the financial side of the business. This made good sense to me as I wasn’t a “numbers person” and the thought of managing things like tax returns, VAT, balance sheets and Profit and Loss reports filled me with dread.
By doing so, I eliminated a significant source of worry and it allowed me to focus on making sales, marketing and delivery, BUT it also divorced me from the day to day numbers behind my business. I got an annual set of accounts and a tax return, and that was about it.
Yes, I could apparently phone up my accountant at any time to ask for help, but the problem was that a) I didn’t know what I didn’t know and b) I didn’t want to appear stupid.
So, I soldiered on in blissful ignorance, blindly making decisions based on emotion and gut feel with little recourse to their financial implications.
My biggest errors in those early days included:
- Forgetting to set aside money for Tax and VAT Bills
- Spending money on multiple marketing channels without having any way of objectively assessing the return I was getting.
- Having little or no idea which customers were profitable and which were not
- Not tracking and forecasting my cash flow
Thankfully I have learned from my mistakes and, while I’m a long way from perfect I have improved considerably. Here are some of the things I did that really helped.
- Find the Right Accountant For You
I searched high and low for an accountant that I felt comfortable with. Someone who was proactive, who understood my goals, needs and shortcomings, and who would keep an eye on my numbers and flag up issues and opportunities – enabling me to make evidence based decisions.
- Get help to set up a system that gives you real-time access to your numbers
Not being a “spreadsheet person” I prefer to use an online accounting package designed for non-accountants. This smart software automatically accesses data from my business bank account, giving my accountant and me 24/7 access to my business numbers. It’s a godsend, and I am not exaggerating when I say that I wouldn’t still be in business if I hadn’t discovered it.
- Use expense categories to see the bigger picture
I found that it was all too easy to spend small amounts for marketing related activities without looking at how much I was spending in total. Freeagent, my accounting software made it easy to aggregate and access these numbers, allowing me to make better decisions.
One thing that I was good at – Getting paid!
I know that many small businesses have problems invoicing customers promptly and in chasing up when invoices have not been paid, but thankfully this has never really been a problem for me.
Perhaps it’s all down to my Scottish genes! The one bit of the financial side of the business that I loved was sending out invoices immediately the work had been completed!
Being computer literate, I had an invoice template set up, and I would raise and email invoices as soon as I got home from working with a client. I marked in my diary when the invoice was due and, if it hadn’t been paid, I’d send them a polite email requesting prompt payment, with a little PS that said, “Sorry but I am Scottish so chasing money is in my blood!” – and it almost always worked.
Nowadays life’s a lot easier because my online accounting package generates the invoices for me and then sends out personalised reminders automatically.
Thanks Gavin, I’m so glad someone other than me thinks I’m out of my mind. My Avenue Business Services accountancy, tax and auditing business suffered what might have been a catastrophic event following a business decision that seemed right at the time but was proven to be anything but by circumstances.
My whole reanalysis of myself as The Outsourced Finance Director and not just another accountant (chartered or otherwise) is the result of the resulting decision process.
Get a good accountant (by the way, Gavin is not a client of mine but I won’t take that as a slight!) and a good business coach too, you NEED to make yourself accountable for those decisions once you’ve made them.
‘Sensible Decision Making’ is one of the challenges identified in our blog series and other posts such as ‘Strategic Focus‘ links closely with above Top Ten Challenges for Businesses as they Grow – Please subscribe (using the form, below) if you’d like to be notified of new posts from small business owners facing these challenges.
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