In his recent column for the Daily Telegraph, Lord Sugar (best known through the TV Series The Apprentice) implored small and independent business owners to return to the basics of business. All you need to balance the books he said, is a pencil and paper.
Indeed in today’s world of profit and budget forecasts, turnover underwritten by credit and all number of Excel sheets predicting business for the coming 24 months, it is easy to get lost in the fact that a business remains at the very bottom line exactly that; a business.
Lord Sugar was quoted that as he started out, he simply had weekly targets. He knew how much rent he had to pay and if he hadn’t met his overheads by the end of the week then he would have to work twice as hard the following week.
Today Auto Windshields went into administration. Another casualty in a long line of recent businesses which have become victims of our poor economic climate. It is easy to say that they were the victim of circumstance or just plain unlucky. However the truth is that just as with the banking crisis 18 months ago, it is the businesses which are built upon solid foundations which will prevail.
Often that solid foundation takes more time, patience and in some cases opportunities perceived at being lost. However, the financial security on which every business should be formed will in the end be the difference between those companies which succeed and those which fall aside.
Swapping budget forecasts for pencil and paper never hurt anyone (or business) for just one day.