Blue Dot Blog

We really understand your business (that old chestnut)

It could be worse, I suppose. Your accountant might not even try to understand your business, seeing it as sufficient to simply process all your financial transactions and then tell you the outcome.

And it could be even worse than that, I suppose. Your accountant may say they understand your business but not actually do so!

But it could be better. It could make a difference. Continue Reading

How to decrease your dependence on that one big client (without losing them!)

Like any dependency, first you have to acknowledge the dependence. That one big client may account for a massive proportion of your profit.

What does it look like, that one big client?

On the plus side:

  • Large, regular billings
  • Large cash inflows
  • Business that everyone wants to work on
  • A source of pride across your company that you have XYZ as a client

But also, perhaps, some negatives:

  • Over-servicing
  • Low profitability
  • When they say “jump” you all jump
  • You have to work long, anti-social hours to keep them happy
  • Lack of variety across your business

Good or bad, probably bits of both, that one big client is a risk.

What if you lose them?

What if they lose you?

And it’s also an opportunity.

That one big client may be many things. In fact the only thing that one big client must not be is “that one big client”.

Tubular Bells to Tubular Belle

One of the first records released on the Virgin label was Tubular Bells. It was outstandingly successful and made huge amounts of money for Virgin.

It was a springboard for the growth of not just the record label but the entire Virgin empire.

Indeed, the significance was acknowledged by Virgin Atlantic in naming one of their aircraft Tubular Belle in 1994.

It seems to me that this is one of the best ways to utilise that one big client – use it as a foundation to grow your business and other businesses.

  • Use the cashflows to invest in marketing
  • Use the fact that they are your client to attract the interest of other clients
  • Get testimonials from them
  • Build up unique market intelligence that no one else has
  • Learn how to profitably service a client of their size

The best way to decrease your dependence on that one big client is to build up a portfolio of other big clients!

Be prepared

If that one big client ticks lots of positive boxes (profit, cashflow, good to work with) then use it as a springboard to grow.

But what if that one big client is a problem?

  • Low profitability
  • Slow payer
  • Demands too much attention from senior people

In this case you still need to be building up other clients to reduce the dependency and, when the time is right, try to renegotiate a better deal with that one big client.

However, you have to be prepared to say goodbye. Ideally at a time of your choosing.

After all, they can say goodbye to you, so wouldn’t you prefer to do it on your terms?

 

Many businesses are launched or achieve massive growth on the back of that one big client. But many get painted into a corner as well.

There’s nothing wrong with having that one big client – but make sure you make the best of the opportunity it presents.

 

Michael
@diaryofanomb

I can’t have the business I want…….because of the business I’ve got!

Business confidence supports growthI can’t have the business I want…….because of the business I’ve got!

This was the odd but striking conclusion of a meeting with the MD of a ten year old business who was looking for help with the financial management of his company.

We were looking at an analysis of revenue by client and he was describing the work done for the larger clients, the time taken to do it and the level of fees charged.

Then we compared these clients against the characteristics of the “ideal” clients he was looking for.

Continue Reading

Use the election to make a difference to your business

The UK general election is less than two months away and is predicted to be not only too close to call but likely to return more MPs from more parties than the country knows what to do with.

With votes at a premium why not turn this election into an opportunity?

Smaller businesses are vital to the economy, vital to continued growth and it is in everyone’s interests that they are encouraged to flourish. However, lacking the clout that larger businesses have and being more disparate it is difficult to speak with one powerful voice and easy for a deaf ear to be turned towards the many sensible but less-influential voices that are raised.

So why not ask for, say, five things to be done by a new government to help smaller businesses. They may be:

  1. encouraging prompt payment of invoices (I think legislation may not be practical)
  2. increasing the proportion of public sector contracts that are serviced by smaller businesses
  3. cutting the red tape that applies to smaller businesses
  4. improving access to funding
  5. increasing access to skills and learning for entrepreneurs

Let’s say there are five million smaller businesses in the UK, as @tonyrobinsonobe says. That is way more than five million votes and the forthcoming election will be decided by fewer votes than the small business community can muster.

So, when you know who is standing in your constituency – go and lobby them. Hold their feet to the fire and get them to tell you what their party is going to do to help smaller businesses. How will they make a difference to the five points above?

And if you’re not satisfied by the answers, ask them why they might expect you and every other owner, employee, supplier or customer of a small business to vote for them or their party?

In election that is too close to call, the smaller business constituency has a real voice. And less than two months to use it.

 

Michael
@diaryofanomb

 

Outsourced accounting – the way of the world

Outsourced accountingOutsourced accounting has been with us for many years, at all levels from the freelance bookkeeper to the interim Finance Director.

No change there, but technology is making outsourced accounting much easier to buy and to deliver.

All of which has to be good for businesses of all shapes and sizes

There are two big drivers for this change.

Continue Reading

Boost your profits in 2015

Six weeks until the end of 2014, not a bad time to be thinking about boosting your profits in 2015.

These links may help:

Profit is your first cost: Treat your 2015 profit as the first cost of the year. Weird but very helpful.

Proof of profit: Are you making the profit margin you should from each sale you make?

Go paper-free: Cut out costs and clutter and use expensive office space for people and profit, not paper. Here is how we did it, you can too.

 

And finally, if it is not yet finished, let alone not yet started, your tax return has to be submitted and the tax paid by January 31, 2015.

 

Best wishes for better profits in 2015!

 

Michael
@diaryofanomb