June 2013

Top 11 Reasons Startups Succeed


Business startups are literally a journey into the unknown and entrepreneurs need to be comfortable with taking on ambiguity, uncertainty and multiple challenges.

Unfortunately, on average, 9 out of 10 startups will go out of business, and the remaining that are able to survive and succeed are the ones that capture the qualities outlined below. These qualities are generally deeply ingrained in the character of successful entrepreneurs.

1) Vision

A well-defined vision is a skill or gift that every company leader needs in order to cross the finish line. It will be the major force behind an entrepreneur’s success and will serve as a compass in tough times. A startup needs to envision how to monetise from the very beginning. The first dollar counts, especially for potential investors.

2) Speed

Getting things done in a quick manner is one of the many reasons why startups are able to reach their goals and milestones. It makes a difference when a startup is able to launch on time or when it’s able to move much faster than competitors. Successful startups never delay the process of getting things done, and have to work as much as needed until something is complete. The most productive people are the ones who make the most of their time. Regarding speed, having knowledgable people in-house really makes a difference. The faster you can make the mistakes, learn from them and improve your offering, the better.

3) Budget Masters

A successful startup is efficient in managing its finances and able to operate very lean. Every angle should have its own budget assigned and unnecessary expenses should be avoided. It is important to know what the company needs in order to accomplish milestones and budget accordingly. When resources are limited, and time is of the essence, companies need to master the skill of doing more with less.

4) Social Skills

Networking is another reason for startup success. A founding team that knows powerful and influential people in the business is completely priceless and can open the doors to partnerships and investors in a New York minute. Great startups have an outstanding CEO who is able to work his or her way into any organization. On the other hand, startup leaders need to inspire people and give them reason to follow them through the uncertain journey, often where team members are required to make many sacrifices such as work/life balance, salary cuts, limited or no health insurance and so forth.

5) Discipline

Discipline starts with self-control and is a product of a strong self-imposed personal standard. Without discipline, startups fail to succeed in business even if situated in the best economy. Self-discipline leads to positive work ethic, and work ethic leads to getting things done effectively and efficiently. It is critical to have all the team members aligned and working together to get to the finish line.

6) Determination

Strong determination is always necessary for success to take place. A successful startup emphasizes the significance of determination when building a business and never quits, especially when the road gets bumpy and scary. There are many challenges that will arise and the startup team needs determination to overcome these challenges. Just like the book from Jim Collins “Good To Great”, if the right people are seated in the right seats of the bus, the startup will eventually find its direction towards success. Determination and persistence is a key component to making this fact happen.

7) Ability to Adapt to Changes

The best startups are always willing to adapt to new technologies.  Adapting to change can lead to major breakthroughs. During the early years, the startup will need to iterate the product plenty of times until they are able to  find the secret sauce and get it right.

8) Fundraising Skills

Cash flow is the blood line of any business.  This means that businesses can be ruined with inadequate capital. Successful startups are the ones that have sufficient capital to run their business operations.  The primary duty of a startup CEO is to be able to raise capital. A good way to raise money  online  is via equity and debt crowdfunding platforms as it allows the startup to raise funds, in some cases, in just 60 days from accredited investors. This eliminates the need of doing an 8 month road show which is tiring and ultimately very unproductive for the business itself.

9) Unwavering Belief

Every business’s success revolves around taking risks. Successful startups are prepared to take risks. As they say, the most profitable investments usually require high amounts of risk. However, such decisions need to have a solid due diligence in order to avoid as much as possible the downfall in the event things don’t turn out as they were expected, which is often the case.

10) Master of Time Management

Startup life can be rough, between the mountain of things to do and limited staff and resources, the company’s success hinges on the team’s productivity and effectiveness to do more with less. I was once told by a savvy and very successful business man that having things to do will never be an issue, but carefully picking what to focus on and what to prioritize will be your business challenge.

11) Execution

Lastly, having an idea is just the beginning and really, execution is 98% in determining each business’ success.  For this part, the experience of the team is critical as their backgrounds will help towards making more good decisions than bad ones. In summary, successful startups are always looking for opportunities to do something better by thinking outside of the box and constantly questioning the status quo. They learn from their mistakes and fix them quickly as they continue their long, challenging and soon-to-be successful journey.  

Article by Tanya Prive, Rock the Post

image by plewicki

"We Measure so our Clients improve" - is it a strap line or a fact?


Our strapline sounds good and seems reasonable but what is a realistic expectation and how do we prove it  - that's our challenge.

Years ago I was the Financial Controller for parts of very large companies - Unilever, Marsh & McLennan, TV Times, Time Life and Times Warner. Naturally I reported monthly otherwise I would have been shown the door pretty quickly.

I left this world to start BookCheck which from the first has provided monthly Management Accounts but the strange thing is that such monthly MI is almost unheard of in our prospects with turnovers from £250,000 up to £1 million and unlikely, especially in quality, above that. So why is this? There are two key reasons:

  • lack of skilled resources to produce them
  • lack of knowledge or experience to use them and benefit

Although our prospects have a natural bias in that they are talking to us, very few have Management Accounts (or MI) or if they do then it's so unsound it's worse than useless. So would these businesses be under achieving profits by not measuring?

It ought to be possible to produce quality MI, use it and then expect a significant increase in profitability but by how much?

How do we calculate a range of expectations? The ideal would be to measure our clients but that will take time. So we wonder are there are any UK statistics on this subject that we could use?

At least we have one client example - they started with us engaged on 25 contracts with a typical life of 2 to 3 years. The business was impressive however they had a big weakness - they didn't know the individual contract profitability. Now they do from our BAR - BookCheck Advanced Reporting, now they work on the lower profit areas to improve, they also focus on the higher profit areas to increase such business. It's all so obvious but it hadn't been achieved previously. Over time it's increased their Gross Margin by 3% which on a turnover of £3M has added £90,000 to their bottom line. That's one heck of an achievement from just reporting.

Measuring overheads likewise is the basis for a significant reduction in costs but by how much on average? Would 10% be reasonable?

Our challenge is expanding this information across our client base in the meantime does anyone have any research on what a reasonable expectation might be? Of course the interesting extension is what would be the effect of properly used MI on the results of UK plc?

Author - Anthony Pilkington, Managing Director of BookCheck Ltd image from aussiegall