Ready to Sell Day 1

When do you think is the right time to start thinking about selling your business?

It’s like trying to sell a house that moves every day. It can be a horribly complicated process that we’re unlikely to even consider until we want to sell. I know I didn’t, and then I found something out.

We should be thinking about the sale, often called a disposal, right from the start. No really.

Even the initial set up can cause complications down the line. Some examples I’ve come across recently are; the company formation documents aren’t quite right (or there!), the accounts are on a homemade spreadsheet that only they understand and their cousin looks after this part of the business and they bung him £100 every so often.

Every process and transaction should be very clear, legal and easily understood by anyone who looks at it for the first time. A buyer’s uncertainty will reduce the price, or worse, put them off altogether.

But there is a double whammy here – you benefit now and when you sell. By working with this mindset you will have a much stronger business, so it will grow more quickly, be more resilient and guess what? Much easier to sell for a higher price.

Page 1 of Google Results?

Google made 3,200 algorithm changes in just 1 year. Do not adjust your screen. This is not a typo. 3,200.

They’ve published solid advice for SEOs and you can take a look below. But here’s a summary of what it means for you and me.

You’ll often hear what we “must” do because of the latest, most publicised update. But there’s a problem other than the sheer volume of them.

We use Google so much that it’s become a verb. Their aim is to deliver the most relevant results for what we actually want. Our aim when searching is to find what we want very quickly.

Trying to sidestep their system with a million links and over hyped cheats is missing the point.

I was given some great advice over 9 years ago. We were building a janitorial supplies website that had over 1,000 products. The temptation was to cut and paste the manufacturers’ description for each item. The advice was that we write a unique description for each and every product. Lousy! But the result? 9 years later website still ranks above the manufacturers’ sites even for common documents like data sheets.

The harder something is to do, the more Google rewards it.

Google’s and now my advice is the same. If we want our website to rank highly we have to put the work in with unique, relevant and useful content. Do that, and we won’t need to worry about the next 30,000 algorithm changes because a good website stands the test of time.

Amazon Greatness

What could selling on Amazon do for you? 

Amazon have fundamentally changed our expectations of online shopping with a seemingly infinite product range, same day deliveries and first class returns policy. Their sales figures are immense.

Having just a tiny share of this could transform your business. If it’s done correctly.

Too many businesses have started the process by listing on the site but then fail to manage the process so that it does very little for them, ultimately becoming an inconvenience. So let’s run through some steps to Amazon success.

1.    Images. The best sellers have professional and unique photographs. If it looks like it was taken on your garage floor why would they trust you. If it’s the same stock photo as everybody else why would the customer stop to look at your ad.

2.    Detail. A single line repeating what the product is called won’t tell your potential customer what they need to know. If they have any doubts that it’s what they want, they won’t buy it. The more detail you can include like size, applications, weight, instructions, benefits etc. the more confidence you instil. 

3.    Pricing. It seems obvious to say this but it’s pointless making a loss selling anything. It’s too easy to be caught up in competition chasing sales and paying for the privilege. Double check and check again that you’ve allowed for the right fees and calculated the VAT element correctly before setting your price. 

4.    Delivery expectations. We’re not very good at waiting for our stuff these days. The easiest way to upset a customer is to miss the delivery deadline. If at all possible offer a next day service. But if you do be sure to stick to it. Regardless of delivery option always provide tracking information uploaded through the Amazon system.

5.    Customer service. Response time to any enquiry is measured by Amazon. If you get a message – respond quickly. If there’s a problem, resolve it quickly. There may be some short term pain but your ratings are too valuable in the long term.

6.    Consistency. Once you have these things in order and you stick with it your seller rating will climb. Not just the one shown on your ads either, Amazon have internal seller metrics that will open new opportunities and offerings.

7.    Prime. Get the above right and you qualify for the next level in sales; a Prime badge on your advert.  This is achieved either by FBA (Fulfilment By Amazon), by sending your products to an Amazon warehouse, or SFP (Seller Fulfilled Prime), which is a courier style arrangement with Amazon directly.

Not only can you hugely increase your sales, but your purchasing costs will almost certainly fall as your volumes increase.

Like the idea but not the time it will take? Launch Control can do it for you. 

Cash Flow Help From Suppliers

60-90 days to get paid? Don’t panic, you got this. Last time round we discussed how to manage your big corporate customer’s systems to minimise the pain. Now what can you do with your suppliers?

The goal is to minimise the time gap between your outgoings and that payment arriving.

First things first; get to grips with your cashflow. Work it and plan it like your business life depends on it. Because it does. Have a proper meeting with your accountant to get it set up and then update it daily yourself. Yeap, every day. Those first few months will be critical and you need to know where every pound will be and when.

Next, just be honest with your suppliers. Really honest. For a moment think how you feel when you get lied to, or a limited version of the “truth” is spun when you’re trying to get paid. Do you ever trust them again? Ignore the temptation to do the same.

Whilst those first 2-3 months waiting for your money can seem like an eternity, the reality is that this is only a temporary cash flow situation. You are going to need those suppliers long term so by being honest with them you’re building on the relationship you already have.

Growth in your business is good news for their business. Tell them who it is and what it means for you. Once they understand and are confident that your money is in the pipeline as is theirs, you’ll likely find that they become more relaxed. I’ve found over the years that the majority of credit controllers are actually quite reasonable.

Sadly, whilst they are unlikely to extend their terms to match your customer’s, the more you can maximise their goodwill the smoother your problem. But remember the honesty. If you agree a later payment date with them, stick to it whatever it takes.

See, if they agreed to help you out and then you don’t honour your part, guess what will happen to the next invoice’s due date.

Once you prove yourself good to your word, most suppliers will be happy to permanently extend their terms for you. Even if it’s only by a week or 2 it can make all the difference.

A word of caution if you’re buying from a large national supplier. Some companies regularly supply their debtors list to credit rating firms such as Experian. So even if your supplier agreed to let you pay later than usual, when that list is sent off it shows your company is X number of days late paying. This can affect your credit score, which others will be using, defeating the object of this plan. If you suspect this is possible ask them and then reconsider how you prioritise your payments.

Be as open and honest as you can with all of your suppliers, stick to your word and they will want work with you.

If you’re in with the big boys more will follow and this temporary situation will seem like a lifetime ago!

The Long Credit Game

Congratulations! You landed that big corporate customer that you always wanted. Then they request your signature on the payment terms. 60 days? 60 days EOM (End Of Month)? Even longer?

You already know that cash is king and for large corporations this is no different. Actually they often rely on being able to demand their own complex and extensive credit terms for the privilege of working for them. The longer they can drag this out, the smoother their own cash flow.

The first 6-12 months of dealing with this can be tough or just downright scary. So let’s take a breath and figure it out. The money is good, the kudos is amazing, all we need to do is sort out the process which will sort out the cash flow.

For the avoidance of any doubt, when you’re agreeing to terms which include the letters EOM, you’re effectively agreeing to invoice just once per calendar month. So if you agree to supply or work for your customer on 60 days EOM, you then fulfil work and/or supply on the 1st January, you won’t get paid until around 1st April. (January EOM = 31st January + 60 days = 1st April). And then only if you get their process right.

That’s the first thing you need to establish; what exactly is their process. 

Start with the invoice itself:

  •  Is it just the order number you need to show on the invoice or other information too, such as your supplier code, project number etc? 
  • Do you need a signed completion statement or delivery note included with the invoice?
  • Can you invoice in parts as the work progresses, or does it have to be in one lump sum at the end?
  • Where and how does the invoice need to be sent? 
  • What date does the invoice need to be received by to be included on their next payment run? (I once had a client who was on 60 days EOM. If we sent their invoice for January’s work, for example, on 1st February, they treated it as a February invoice!).
  • Send the invoice to them on the day the work is completed. Any delays at your end of this process will only make it that much harder to get paid on time.

Next, chase it all the way through their system. Large corporations will have a series of steps that must be completed by a set date before each payment run. 

Once you have the information below make sure you set a reminder for each date and for each invoice.

  • Establish right at the start who your point of contact is for payments. 
  • A few days after you’ve sent your invoice in, call to make sure it’s been received and put on to their system. 
  • What’s the next step in their in system? Management approval for example? When does this need to be completed by? Call again a week or so before the deadline for this and make sure it’s been signed off. If not, call the manager or contact who raised your order number. Don’t just leave it to their accounts department. You will likely need to chase this up a number of times. 
  • When is the cut off for their payment run? Often this will be a week or more before the payment date. So guess what? You’ll need to call again and make sure that everything has been done and that they have it on their list of payments.
  • Don’t be shy! Call as many times as you need to for every phase. Presume, because it’s true, that this only matters to you.

Miss just one step and you could be waiting yet another month for your money. In our next article we’ll take a look at managing your own payment system and what else you can do to ease cash flow in the meantime.

Cyber Risk

A cyber attack usually takes place 240 days before we know a thing about it. These attacks are growing exponentially and great risk to modern businesses.

If we’re honest with ourselves, how much do we truly understand about the security of our connected business systems? Even the innocent email system. The majority of company email addresses can be easily spoofed to appear like it’s been sent from you.

BA and Marriott were reminded at great cost this week that GDPR law demands we don’t lose control of any data we hold . Our systems must be robust. Insurance cannot cover what is demanded by law. So insurance will only cover expenses to defend and handle a breach, it can’t cover any fines levied.

If you struggle to find the time to check and fix your systems, that’s what Launch Control’s concierge service is here for.

Free Money

You’d never turn this down would you? And yet you may have done just that when you let a grant or funding go because of the time needed to apply. With Launch Control’s business concierge, the searching and applying is taken care of. Such as securing a £4,070 for our customer’s new product development. One of the many ways we boost your earnings and free up more time.

We Are FCA!

Financial products are a large and essential part of your day to day business. Because we want to give you the best service possible, we want to do as much work for you as possible. So to find you the best deals on financial services Financial Conduct Authority approval is required.

We are authorised by the FCA with registration number 840696. Another reason you can have total confidence in our VPA services.

What does your business need? Is there are a license or authorisation you’d like to have or should have? Struggling to get around to it? Let us do the work for you. Whether it’s ISO, Waste Carrier License, Chas or even FCA we can help.

My First Insurance

Finding the right insurance for your new business can seem overwhelming and tedious at the same time. Amazingly it’s not a legal requirement unless you have employees, but frankly why take the risk?

You want to get it right and yet there are so many unknowns without any trading history. Insurers understand this and are happy for you to provide your best guess estimates at the start. Be reasonable with yourself and don’t feel obligated to go over the top with all your numbers “just to be safe”. However, as time passes, if you do discover that your predictions were wildly off the mark or you’re doing things that you never expected, it’s really important that you keep your insurer or broker updated.

Everyone should have liability insurance to start with protecting yourself from accident claims whether to people or property. Then you can consider other factors such as the stock you’re likely to hold, equipment or tools in transit, hired in plant and more.

Don’t feel that you need to dive right in on your own. Launch Control is here to help and guide you to an effective business launch with minimal stress.