How To Effectively Grow Your Small Firm Into A Medium Business

How To Effectively Grow Your Small Firm Into A Medium Business

Article credit: Sage 

As a business owner, there comes a time when you realise your firm is changing from a small to a medium business. This realisation can come as quite a shock (as well as a time of excitement), so you’ll need to be prepared.

This article will highlight the complexities you need to be aware of and how the right business management software can help you stay on top of things.

Moving away from being a small business

Rob Moore and Mark Homer set up property investment firm Progressive Property in 2007 with the help of family members, two salespeople, one marketing person and a personal assistant. Since then, their business has grown considerably.

Moore says: “As a medium-sized business, we grew from 35 staff. We then hired a head of human resources to manage the managers, staff and culture. That HR department expanded; we then employed 50 staff. Now, we currently have 86 staff in-house and up to 100 outsourced employees.

He points out how things can feel different between a small business and a medium-sized one: “In a small business, you can have a family culture and feel; everyone can muck in with a feeling of spirit and togetherness. When you grow, sometimes you can lose this.

“It’s far easier to track all costs and metrics in a small business as there are fewer moving parts.

“As you scale, there can be simply too many customers and staff to keep a close eye on everything, and your business can become very wasteful. You can lose touch with your customers and your service, which build your business in the first place.

“Founders especially can find it hard to let go. Micro-management can occur as the founder and high-level managers have to delegate responsibility down.

“Some founders are very good at starting businesses and have entrepreneurial spirit and flare. But they don’t have the different skills required, or passions, to take the business through to medium and large scale.”

Dealing with complexity as you turn into a medium business

There are many complex issues to consider in the move from small to medium-sized business, from delegation and cash flow management to organisation.

Moore highlights the complexities: “As you scale up, staff can get overworked and overwhelmed. Your costs go up, sometimes disproportionate to the extra revenue you’re making, and, as such, your margins can reduce.

“Your culture and organisation can become very chaotic and reactive, where nothing seems to be ordered. Staff can leave under the pressure, and you could be left with not enough people and the inability to hire a good-quality replacement quickly enough.

“Your costs go up again for the recruitment of the right staff, and it becomes harder to track and measure your finances and key performance indicators. It is wise to manage growth progressively as opposed to aggressively and to track all increased costs.”

Mike Smith, director of alternative business finance solutions firm Business Expert, shares five tips to help you grow your business:

1. Delegation is what you need

When done well, delegation creates real accountability and good people will always step up to the mark.

2. Plan for mistakes

Identify worst-case scenarios to prepare for potential damage. Moving from a small to a medium business can come with risks and mistakes, so plan for these in advance.

Mistakes can relate to disorganised accounting, taking on too much debt or even focusing too much on sales and marketing of your business.

Disorganised accounting

One of the biggest scaling mistakes growing companies make is losing track of accounting and drowning in disorganisation. Not only is this frustrating, it can also have serious tax and legal consequences.

To avoid this, hire a professional who is responsible for staying on top of the company’s finances. And simplify your invoicing process. Failure to collect payments on time can have a knock-on effect for cash flow.

Too much debt

Debt is a strategic tool for growth but it’s not something to become reliant on. Whenever possible, try negotiating instead of taking on more debt. If you’re in the B2B world, this is especially useful.

You can offer your services to a company in return for theirs. By building out this network, you lower your overhead expenses and prevent the need for excessive debt. Obviously, this can’t be done with everything but it is a valuable strategy in many situations.

Too much focus on sales and marketing

When growth is the primary focus of everything you do, you’re inclined to spend all of your time and resources on sales and marketing. After all, that’s how you get new customers. But this may be a mistake.

When all of your attention goes to these areas, you neglect creating value for your customers. Innovation goes by the wayside and customer service takes a back seat. The result could be a poor customer experience that negates any progress you make on the sales and marketing front.

3. Find and retain the right people

Finding and keeping the right people in a business is crucial to its future growth. As your company grows, key roles need to be filled, and the right experience and skills are vital. Aim to know the next two people you hire and make sure it’s well thought through rather than a ‘distress purchase’.

David Kelly, general manager for EMEA at Deputy, a workforce management app, says: “To grow sustainably and retain talent, you need to bring people on the journey with you.

“Pay them properly and on time, and prove work will fit into their life. Investing in tools that allow you to do this will build trust among a dedicated workforce who will be your engine for growth.

“Startups and small businesses need the ability to scale up quickly and resource new contracts. Winning new business won’t be the challenge resourcing to deliver it will.

“It’s a huge investment to employ someone else, so flexible workers are ideal for startups. As you grow, you also need to empower your managers to be successful. You need to know who’s working where, when to deploy people, how to deal with absence and so on.”

4. Measure performance and progress

Make a clear distinction between short-term performance and long-term strategic progress. Long-term insights need to be assessed in order to plan for a successful future.

5. Put systems and processes in place

To scale up any business, you need the right systems and processes in place to ensure activities are efficient and compliant, and continue to deliver for your customers.

If your business is growing and you still have the same systems and processes in place that you were using three years ago, chances are you have already outgrown them.

Growth strategies to consider

Once you have objectives, part of developing a strategy for growth involves thinking about possible barriers to scaling up.

There are several factors that could thwart your ambitions to grow, such as a lack of leadership skills, lack of funding and weak cash flow.

For Shermeena Rabbi, consultant speech and language therapist, and founder of Unlocking Language, one of the biggest complexities of scaling up has been retaining and maintaining staff.

She says: “As we’ve grown and built up our reputation in the industry, we have received more attention from prospective job candidates.

“However, ensuring that new hires can maintain the quality of service and business values we are known for now is difficult.

“This factor is particularly important among senior staff.

“Not only are they responsible for promoting these values among junior staff but as my role becomes less personal and more management focused, they are the people responsible for ensuring these values are felt with our clients.”

Adam Hadley, CEO and founder of data science consultancy QuantSpark, says his growth strategy involves “a balance of opportunity, capability and capacity”.

He adds: “Our biggest challenge is in growing the team quickly enough in a highly competitive market like London.

“As a data science consultancy, we’re focused on pioneering the strategic application of data science and analytics to develop complex decision-support tools.

“About half our revenue is from consulting and half from software development. Our aim is to start generating more revenue from software licensing fees. In the meantime, we reinvest all of our revenue in software development.”

Overall, a credible scaling strategy is fundamental and you should be able to address the following:

  • Skills
  • Governance
  • Management information systems
  • Routes to market

Also consider whether it is best to grow your business organically, via partnerships or via acquisition.

If reaching overseas markets will benefit your business, internationalising the board before doing the same with your company can be a shrewd move. And as well as board members, choose your target markets carefully.

There are many different strategies to consider. In Progressive Property’s case, the founders focused on increasing marketing and advertising spend. But all businesses are different.

Progressive Property’s Rob Moore says: “Many companies paradoxically do not spend enough money on marketing. In the modern business world, you can leverage free and low-cost social media platforms to reach vast numbers of customers across the globe.

“It’s vital to continually test new marketing avenues and strategies. Starting with test spends and incrementally increasing your marketing spend as new media converts well.

“You could form strategic partnerships with other brands or bigger companies, much like the Virgin brand does.

“You could create new products and services and sell more to your existing customers as opposed to just focusing on new customer acquisition. You could employ more national or global strategy for increased reach and impact.”

Employing the right people to scale your business

As you scale your business, you’re likely to need more staff. Aim to build a great team of employees.

Your relationship with them might not be as close as with previous team members, when your company was smaller, but everyone must realise the importance of your business values.

Shermeena Rabbi, from Unlocking Languages, says: “As we grow and secure more clients, increase staff and open more locations, the main difference I have noticed is the personal time I get to spend with the team has gone down, particularly the time with the junior team.

“I have also noticed the rapid startup growth has become more stable. Increasingly, more of my time and capital has to be spent on operations and processes activities. This largely includes time spent on quality assurance and HR.”

Consistency and quality are paramount. Create the right culture and an environment where people want to be and want to excel then get out of the way and let them get on with it. All team members must be properly engaged, motivated, recognised and rewarded.

If you need to outsource to recruit experts for your business, do this in moderation.

You don’t really want to blow your budget on recruitment agency fees if you can avoid it, or rush to hire a star player who subsequently doesn’t fit into your company culture.

How business management software can make things easier

There are many different types of software that can be used to help manage your business whether it is small or scaling up to a medium-sized business.

Administrative tasks

Deputy’s David Kelly says: “When you’re small you need to see value immediately. Cloud-based tools are a great answer: they’re affordable, they can grow with you, they’re inexpensive at the outset and therefore low risk.

“We’re seeing lots of successful new businesses take a new, fresh approach to managing and engaging teams from the outset.

Time management

Adam Hadley from QuantSpark says their primary focus “is outsourcing and automating everything that doesn’t provide us competitive advantage”.

He adds: “This means using the latest accounting, HR, time management, remuneration and EMI [Enterprise Management Incentive] vesting platforms on the market.”

CRM, payment and accounting systems

On the topic of business management software, Progressive Property’s Rob Moore says: “A CRM [customer relationship management] system, email marketing software, accounting software, design and editing software, payment merchants, intranets and internal communication systems are all part of growing a more systems-based business.”

Business Expert’s Mike Smith says: “There are apps for time management, accounting, administration tasks and performance analytics to name a few.

“Very few of us are strong in all areas; they can add support to the bits we find challenging.

“One old-fashioned bit of advice I would add to this is to get a business mentor. There’s nothing like a more experienced pair of eyes to watch your back and many older business people are happy to lend their assistance.”

Back up data

Some business management software can help you minimise “human error” and back up important data.

Christopher Burke, chief executive of tech transformational agency Brickendon, says: “Companies should look to the latest technological tools including advances in artificial intelligence (AI) and cloud computing as a means of double-checking, securing and locking down the most important data.”

HR software

David Vine, the chief executive of bookkeeping provider Ozlop, recommends small businesses use HR software based on how it has helped him with the businesses he has started.

Vine says: “It is not unusual for me to meet small business owners who need to hire staff to keep up with customer demands but don’t have the time to find the right people and get them started.

“But there is a lot of easy and cost-effective help available.

“Just because you run a small business, it doesn’t mean that you shouldn’t use the latest technology to manage it efficiently.

“Without the luxury of an HR or finance department, essential business admin will be your responsibility, so you need to look for ways to get the best resources, using the wide variety of cheap yet really effective HR software now online will bring huge gains.

“Such systems also help ensure you have the right manpower to grow and also help you adopt a professional approach that follows best practice.

“When you combine them with the sort of support that may well be available to you from memberships such as your trade association, local chamber or organisations like the Federation of Small Businesses [FSB], not to mention from discussing it with other business owners you know, that’s a lot of help.”

Conclusion on becoming a medium business

It is important to remember that there’s no one-size-fits all strategy to scale up a small business to a medium-sized one. And it takes commitment and resilience from all involved to successfully do this.

Scaling does not always mean multinational expansion says Stuart Paterson, a partner and co-founder at Scottish Equity Partners (SEP); it may involve capturing a bigger domestic market share, acquisition or joint ventures.

What’s important is to set measurable targets and milestones that will add maximum value to your business.

And consider the bigger picture: scaling up creates wealth, drives innovation and investment and supports employment.

A Deloitte study predicted that if the number of scale-ups grew by 1%, it would result in the creation of 150,000 new jobs

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

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Negative Foreign Currency But Positive Local Currency AR Or AP Account Balances

Negative Foreign Currency But Positive Local Currency AR Or AP Account Balances

Article credit: Sage 

How and why would Evolution ever be able to display a negative foreign currency balance but a positive local currency balance (or vice versa) for the same customer/supplier account? And do you resolve this?

 As an example, look at the following AR Enquiries screen:

Therefore:

Total Debits in local Currency: R3800
Total Credits in local Currency: R2400
Balance in Local Currency: R1400
Total Debits in Foreign Currency: $1400
Total Credits in Foreign Currency: $2400
Balance in Foreign Currency: -$1000

REASON AND SOLUTION:

One way the above can be recreated is as follows:
1)      Process  a $1000 invoice but use a 1:1 foreign currency to local currency exchange
         result of client capturing mistakes)
2)      Process  a $400 invoice but use a 1:7 foreign currency to local currency exchange rate local currency to foreign currency exchange
3)      Process a $1200 payment that also includes a $1200 discount amount , and again  use a 1:1 foreign currency to local currency exchange
4)      Don’t allocate any transactions and the above balances should be the result

 The solution here would be to simply allocate all credits to debits and then the local and foreign currency balances should both be negative.

 

Disclaimer: These articles refer to possible solutions and a platform to share information. Each article describes a method that solved a query (knowledge gathered from previous sites) and how Sage Evolution should operate. These articles make reference to a specific Sage Evolution version, however the thought process can be generalised. Please note the information contained in these articles should be treated as guidelines and adapted to accommodate differences in business processes and IT environments. Articles may not be applicable to all environments. If this article did not resolve your query please contact Kiteview Technologies Support Department on:  (+27) 010 005 6678.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

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Chart Your Journey To Business Success [Infographic]

Chart Your Journey To Business Success [Infographic]

Article credit: Sage 

Starting a business has never been easier, thanks in large part to new technologies that have lowered barriers to entry. Just because entrepreneurs can get started quickly and relatively inexpensively, however, doesn’t mean you can ignore the fundamentals of running a business.

When you find yourself with real customers, real revenue, and challenges you might not have anticipated, what comes next? We’ve created a new infographic designed to help startup and scale-up entrepreneurs identify and address some of the key challenges facing small businesses today.

What do your fellow entrepreneurs think about their prospects for success? You’re part of an optimistic group: 75% of you are confident in your business’ future, with 58% expecting increased gross sales or revenues in the coming year.

Yet, you have a clear view of your challenges, including hiring and keeping good employees (48% say it’s an impediment to growth) and securing financing (43% of entrepreneurs say they can’t get the financing needed to grow).

As the old business saying goes, “Revenue is vanity, profit is sanity, and cash flow is a reality.” There are many different variations on that adage, but they all point to the same question: Are you dedicating enough time to planning for adequate cash flow? Did you know that 80% of businesses that plan their cash flow monthly are still surviving after five years? Did you know that 60% of businesses that plan their cash flow only once a year fail within five years?

Check out the infographic below and chart your journey to business success. Let Sage be your guide!

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

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How To Create A Business Budget

How To Create A Business Budget

Article credit: Sage 

Starting and growing a business is an exciting but challenging prospect. While you may be a skilled leader or have a great idea for a product or service, the financial side of your operation is not always something that comes naturally. Even after you secure funding, you aren’t done yet. You need to correctly allocate your funds for best results. If you don’t have a budget, you could end up spending more than you take in. You need to anticipate and plan for your future needs to maintain a strong cash flow.

Similar to your business plan, a budget sets a framework that helps you move toward your goals. However, unexpected events can throw a wrench in your plans. It’s important to realize that your budget is never static. There will be unforeseen changes, and you will need to make adjustments along the way.

Where to start with your budget

If you are just beginning the process of opening a business, a budget can help you estimate the total startup costs. A realistic budget also tells you the profit you can expect to bring in. Your initial budget should include all your revenues, costs, cash flow, and profits. After accounting for costs, you can determine if you have any funding left over for capital investments.

Small business owners often think they don’t need a business budget because they keep rough financial numbers (income and expenses) in their head. The problem with this approach? They’re likely to adjust the numbers to paint a more ideal view of business financials —or their recollections aren’t accurate. Committing budget numbers to a document and working with it through the year ensures accuracy (and, yes, honesty).

While budgets need to be calculated at least once a year, it may be better to update it once per month, or even daily.

Checking your budget regularly can help you make more accurate estimates based on the current status of your sales pipeline. You can also identify areas where you are at a risk of overspending and cut back before you go over your allocated totals.

One of the reasons you should review your budget is you can see the impact your decisions have made in the short term. You may discover you aren’t spending enough on marketing. Or you may be spending too much on certain marketing channels that aren’t generating a high return on investment. It’s important to consider your sales and referral channels. Additionally, you may be able to make adjustments to invoicing so payments can be sped up, enhancing your cash flow.

Don’t overlook often-forgotten expenses or revenue

  • To make sure you don’t miss any expenses, use bank statements, credit card statements, and receipts to assemble a comprehensive list.
  • Commonly missed expenses include bank/financial fees, interest, local and sales taxes, and home-office costs like utilities and rent/mortgage.

Prepare for the unexpected with a strong budget

Business moves at a quick pace, and sudden changes, such as a client cutting its budget or reducing an order, can harm your cash flow. You need to assess your budget to determine how the loss of revenue will impact profits and how long you expect the effects to last. Do you need to reduce marketing expenses or hiring costs until you can recoup the loss? Your budget needs to be flexible.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

Contact Us

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A New Generation Of CFO Can Drive Digital Transformation

A New Generation Of CFO Can Drive Digital Transformation

Article credit: Sage 

Digital transformation has risen to the top of the corporate agenda. Whatever the business vision at the top, innovation should figure highly. That’s because today’s connectivity supports new ways to engage with customers, with data insight being used to increase productivity and efficiency.

Technology and business strategies are interlinked. Top-level C-suite executives are now tasked with achieving better results through data and technology. And those that don’t do this successfully are at risk of being left behind. According to a 2017 study by Forrester Research, 38% of business and IT decision-makers believe that technological change such as digital transformation will have the greatest impact on their decision-makers over the next 12 months.

Digital transformation is a complete reimagining of work; an opportunity to re-write the rules of business. It allows any business to shorten the distance between what it wants and what it can get. But it also means that competitors are just as capable of taking advantage because they’ll have access to the same tools.

Data is at the heart of digital transformation

Data enables new technology. Digital transformation is about businesses becoming data-driven. But perhaps more importantly, it’s about creating insight and value from data. We’re already seeing this with the rise of automation, artificial intelligence (AI), and an ongoing trend of businesses moving their on-premise Enterprise Resource Planning (ERP) systems to the cloud.

Forrester Research says that digital transformation is about investing in systems of insight. Businesses must discover the insights that matter most, embed them into the software that customers and employees use to engage, and continuously learn and measure through results.

Chief financial officers (CFOs) are major stakeholders in digital transformation. Already responsible for overall financial planning, management, and record keeping, their role has evolved, particularly when it comes to data analysis and decision-making. They are the ones who see all vital business data, and should have skills to analyse and interpret it.

Rather than simply reporting on what a business has done in the past, the CFO is expected to use real-time information to guide day-to-day decision-making. They must also be able to find value with efficiencies that can add to the bottom line. The only way to do this is to measure advanced performance metrics, make predictions, and act quickly.

CFOs are in a great position to look at digital projects and assess whether they will deliver a return on investment when it comes to revenue and profit needed to justify a long-term change. They can look in detail at whether initiatives are likely to differentiate the business and result in better productivity and efficiency.

CFOs can lead digital transformation efforts

As part of digital transformation, CFOs should be looking for enterprise technology solutions that can provide fast and easy access to real-time financial data, which they can use to make decisions. As well as ensuring compliance, these tools must allow them to access financial operational data, with automated alerts and capabilities such as scenario planning.

The cloud is a great enabler, allowing CFOs to access real-time data anywhere and anytime. With enterprise cloud solutions now reaching maturity, businesses are now turning away from legacy Enterprise Resource Planning (ERP) systems to more flexible and cost-effective solutions.

The CFO and chief information officer (CIO) must work together to allocate technology investment and prioritisation. For example, they should be looking at where inefficient processes can be automated, rather than increasing headcount, which can be a costlier exercise.

Piers Moore-Ede, head of digital at Company Debt, says: “The biggest challenge for CFOs doing this is managing the increasingly vast amounts of data and gleaning what’s important from it.

“Whatever industry you’re in, you will have to learn to see yourself as a technology company first and foremost. Those CFOs who are at the forefront of this transformation have a grasp on both data analytics and finance, meaning they are in a unique position to grasp and define corporate strategy.”

CFOs can use digital transformation to push through investment in technology such as robotic process automation (RPA) – the use of software bots to automate existing, often tedious, work processes.

This can reduce headcount, which is an obvious financial benefit for a business. It can also free up employees to focus on more valuable tasks, like interpreting and improving business performance, rather than spending time on routine logistical work.

Over the next few years, we will see businesses investing more in AI, or what some have called ‘automation on steroids’. With AI more commonplace, we will likely see lower-level manual tasks disappearing and replaced by technology.

CFOs can also drive Industry 4.0

In industries like manufacturing, data is the driver of the Fourth Industrial Revolution, or Industry 4.0. This is because Industry 4.0 is made possible with the collection of real-time information across the supply chain, whether talking to suppliers or customers.

In industries where Industry 4.0 is on the corporate agenda, like manufacturing, successful digital transformation depends on a CFO who understands the competitive advantages inherent in digital transformation, and who has the capability to drive it.

According to research from Siemens Financial Services, CFOs should have or at least be developing these five key skills for successful Industry 4.0 digital transformation:

  1. Comprehensive understanding of the financing options enabling a commercial sustainable transition to Industry 4.0.
  2. An ability to introduce financing options early in an Industry 4.0 strategy, so that the business can access and take advantage of potential solutions.
  3. Specific industry knowledge and expertise, related to financial, technology, operations, and market analysis, so they can accurately assess digitisation opportunity and risk.
  4. Capability to build predictive Industry 4.0 investment models and performance monitoring processes.
  5. Proficiency to create an effective phased plan to operationalise a move to Industry 4.0.

Today, the job of a CFO is to create better financial strategies that align with the needs of the business. They must in effect become strategic partners, empowered with the real-time analytics and insight that digital transformation can bring.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

Contact Us

For An Obligation Free Quote

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