"My business failed because we underinvested in the most vital component of any business" - by James
It’s been almost 7 years now since my first business - Rocket Powered - failed. It was a great little company. A devoted team, fantastic service, clients who loved us, high standards.
Hell…. we even stamped the toilet roll with our logo.
BUT…. we minored in one major thing… we underinvested in the most vital component of any business…. its finance function.
We were acting on 18 month old financial data, making decisions based on gut feelings and not on any hard financial evidence.
We didn’t have a budget or forecast.
We never had monthly management accounts. We had accounting software but thought that submitting a VAT return was just the click of a button. (It is if you know what button to click.
It isn’t when you get a VAT inspection from HMRC and you’ve been getting it wrong.)
We were investing less than 1% of our revenue into the finance function of our business, so it was always going to be a liability rather than an asset.
It’s all well and good having funky offices, a cool brand & clients who love what you do.
But if you haven’t got control of your finances, you’re not in control of your business and when it fails… it hurts.
You see, we don’t know what we don’t know.
I learned the hard way and now invest properly into our finance function (about 4% of our revenue.)
And I’m proud to say that I also help thousands of accountants around the world to ensure THEIR clients are investing at the right the level too, by giving firms the training and THE tool (GoProposal) so they can confidently provide their clients with everything they REALLY need.
I hope my failings can be your learnings.
You don’t know what don’t know, so ask your accountant… because they probably do.