Six Years in Business – and still counting! Part 2 - The Money Bit

When we set up Level 7 in 2008 the economic circumstances were looking bad: not the best time to set up a new business. At that time we took advantage of a range of sources of advice for new businesses. One bit of advice that has stuck with me all the way through is to remember that ‘cash is king’. You need to have sustainable sources of income to survive. This might sound obvious and risk averse, but I believe that this has contributed to our survival and growth during the recession period. The market in which we operate is a challenging one for a number of reasons:

Establishing the brand - differentiating a ‘training consultancy’ business takes time and hard work

Lead times for winning new contracts from initial conversation to sealing the deal can take up to two years

Budgets for training tend to be vulnerable in times of recession

Reluctance to change training providers in times of instability

There will always be competitors knocking on doors offering a cheaper deal

In the face of these challenges, small businesses need to have robust strategies and systems in place to establish and maintain financial viability. These are the ones that I think have kept us in the market and supported our sustained growth:

Have a range of services in your portfolio with a variety of price points – selling large development programmes may take longer in challenging economic times. Smaller scale services will be more affordable and can help you get a foot in the door with future potential for expanded services.

Make sure that the portfolio of services you offer has congruence as your brand and you’re playing to your strengths.

Have the courage to say ‘no’ if an offer of work is not within your expertise. Don’t lose sight of your core business – there will be times when you feel desperate and worried about money and may be tempted to take on work for the sake of it. I’m not saying don’t do it, we all have to eat, but be clear about how the work sits with your business strategy in the longer term.

Stick to your pricing – be open to negotiation but don’t undersell yourself. If you want to be known as a ‘cheap and cheerful’ brand that’s fine as a strategy but if you want to be seen as a quality provider in your  market it’s important to be brave and not be tempted to cut to rock bottom pricing just to win business.

Employ a good accountant! Although this is last on my list, it’s probably the best investment you will make and do this as soon as possible in your business lifecycle.  In fact, find someone who is more than just a good accountant who understands you and your business and understands the importance of building a good relationship – your success and growth will support theirs!

Dorothy

Northampton

27 January 2014