Don’t Start a Business in the Recession… Not!

If position, position and position is vital in identifying and enhancing the value of an asset in the property market then cash, cash and cash remains paramount in any business but never more so than in a new venture in these cash strapped times.

Starting a business in a recession may not be your first choice as an entrepreneur but if in fact, whether through desire or as a result of unforeseen circumstances, you find yourself in such a position an enterprise started in a downturn may not be any less successful than one started in a boom provided, whatever the temperature of economy is, the key principles of business management are adhered to.

Management books abound that include such essential ingredients to success as; a business plan, a budget, a marketing strategy and of course a people management and development process, all of which of course are very worthy, maybe even for some particularly institutional investors a prerequisite, but in my 25 years of experience of buying and selling over 300 businesses they are ingredients that, without the recipe cannot be blended into a meaningful dish.

Anyone can be taught to cook, as indeed Jamie Oliver has proved, but only a few will make truly great chefs. In every recipe one or two special ingredients are what actually help turn the dish from a simple supper to a magnificent dinner.

In business this is cash. You simply wont survive if you;

a) Can’t make it
b) Free it up
c) Access it from alternative sources if your own particular well has dried up.

This ingredient has always been particularly special but now it is particularly scarce.

Here is my recipe for cash management;

Jo Haigh's Business Recipe

So you now have a recipe and the all important secret ingredients – so it can’t fail… or can it?

Life’s virtues include faith, hope and charity and behaving with such moral fortitude must surly bring its rewards.

Business virtues are in fact not too different, replace faith with belief and enthusiasm in you products and services; it’s seen many a despondent entrepreneur through dark times, and instead of hope how about intuition for the truly talented, this will rarely let you down. And finally charity, a new business is very greedy and not just for cash but of your time and energy.

Like an athlete training for a marathon, it will sap your strength and bleed you dry. So practice patience, a skill many entrepreneurs sadly lack but which if harnessed can deliver more than any other business virtue.

Some make millions by putting all their resources on a single play of red or black, but the shrewd wait, judging the market and then seizing the opportunity, watching as the avaricious and foolhardy stand bereft.

Being patient doesn’t mean doing nothing, far from it. It means optimising the moment in a downturn. There will be lots of these around for the shrewd and savvy entrepreneur so your choice should be someone who

- Makes things happen
- Watches things happen

Or someone who rather sadly says
‘what just happened then?’

Seen in the right way the recession brings not just problems and disasters, which it certainly does, but also opportunities to be grasped.

The question is are you up for the challenge and the ride of a lifetime?

Jo Haigh
Head of Corporate Finance for MGR

www.mgr.co.uk
www.jo-haigh.com

About the Author

Jo Haigh

Jo Haigh is a Partner and Head of Corporate Finance for MGR, a company based in London and Yorkshire and a partner in the FDS Group, a specialist training and development business.

An experienced dealmaker, Jo specialises in putting together the right deal at the right time and in the right format for growing businesses throughout the country. She has bought and sold over 300 companies in the last 20 years specialising in owner managed companies.  More >>

 

How to Model High Growth Organisations

Academy Group 23, chief executive mentoring and experiential learning group (with members from the North East of England) recently heard expert speaker Andy Todd (see Andy’s website at www.com-cat.co.uk ), from Commercial Catalyst, specialists in advising and helping organisations achieve ‘high growth’.

Academy members learnt what the key characteristics of high growth organisations are and then, more importantly, which would be appropriate and practical to implement themselves to achieve similar dynamic results.

The Academy’s chief executive members were able to appreciate the high growth subtleties and techniques to maximise business potential – strategies for taking their products and services to the market, for example:-

• the identification of ‘breakthrough’ clients/ customers,
• having an effective B2B Proposition,
• aim high/ globally,
• potential to be first or second in their market,
• total market size must exceed minimum of £300m sales p.a.,
• the importance of generating revenue as quickly as possible to self finance,
• it is crucial to have a disciplined and measured approach to business development,
• add value and charge top quartile pricing,
• be deal rather than product oriented,
• crucial to be innovative / offer differentiation,
• sell client their potential to achieve competitive advantage not cost saving,
• base price on value given not cost or competition,
• thought leadership of potential clients.

Peter Sutcliffe,

Joint Chairman with Karen Humble, North East, Academy Group 23

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, to find out more about the North East Group, or to find a local group near you, visit www.chiefexecutive.com.

 

Generating Referrals for Your Business

Academy Group 32, chief executive mentoring and experiential learning group (with members from the East Midlands area) recently heard Rob Brown give a very practical insight into how to implement and extract real value from a structured referral system. Any company that could use extra business generated from referrals should come to one of Rob’s sessions.

His top 3 tips were:

• Turn the fans of your business into advocates (he gave a process for this).

• Seek active referrals, rather than passive ones – get a personal introduction and strong endorsement (Rob gave us a 7 step process that all members present could use for getting active referrals).

• When seeking referrals be really focused and specific upon the introductions that you would like the referrer to give you – the more specific you are the easier it is to think of someone suitable.

A really useful session from Rob on how to develop a structured process and system for getting high-quality referrals into your business. Very practical and enjoyed by all members present.

Peter Pritchett, Chairman Academy Group 32

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford® , to find out more about the East Midlands group, or to find a local group near you, visit www.chiefexecutive.com.