Why Businesses Need A Three-legged Milking Stool
One of our investor/shareholders asked me why dairy farmers didn’t use two legged milking stools. The answer was obvious – it’s unstable and you’ll fall off.
It’s the same in business. When I started my call answering business 21 years ago with my late co-founder, there were just the two of us and we were not very stable. Our shareholder, George, said “You need three legs in your business.”
And that’s when it dawned on me that my key role was business development. And the time I was spending trying to save money managing the cash myself and by doing the book keeping, VAT returns and chasing what we were owed was a false economy. If you’ll excuse the stool metaphor – I was falling between two stools.
Our first step was to outsource the bookkeeping. But we soon realised we needed a better handle on our business so we employed a qualified part time financial controller.
A few years later we then took the step of bringing on board a part-time finance director on a retainer to support the board and our internal finance team. This FD wasn’t to replace our existing external firm of accountants who still did our compliance stuff, year-end accounts, and our annual returns.
Our FD helped us set up weekly financial forecasting reports which we still use to this day. These are invaluable because they are always looking forward. Most management accounts are produced monthly and quite often the directors get to review them 3 weeks after the month end. So if things look bad in week one of the period that’s now seven weeks old which could be far too late to remedy potential problems.
Quite simply, having this in place allows me to sleep easy at night.
Over the years I’ve had the pleasure of working with hundreds of clients – from many different business sectors with turnovers ranging from £50,000 a year to well over a £100 million – and without fail the two biggest issues they have in common are:
i. getting more sales profitably; and
ii. Managing their cash flow
Today, business owners have so much more choice than we did 20 years ago. A fresh pair of eyes looking at your business is absolutely essential at any stage, whether a start-up in its first few years or when really well established.
And that’s why I was delighted to be introduced to Mark Nicholls, MD of Tectona Partnership Limited, by my good business friend and client Neil Osment of NOA Limited.
Good outsourcing partners are critical to any business – whether it be a telephone answering service, IT support or part-time financial directors. In return you will get peace of mind and free up your time so that you can concentrate on the income producing activities in your business.
You won’t need to break the bank either because outsourcing these functions is a fraction of the cost of employing staff. They will add real value and stability to your business with years of experience on tap.
Now, don’t you just love the thought of a three legged milking stool for your business?
Tectona are a team of 15 experienced and commercially savvy Financial Directors who provide short and long term support for SMEs. If you want to exit your business, look for profit improvement, re-evaluate your product mix or simply manage your cash efficiently then you should look no further than Mark’s team. They really do have the ability to get underneath the numbers in your business and provide you with a platform from which to make some very sound decisions about your future.
Mark can be contacted on 07818 407061 or firstname.lastname@example.org