Follow JRPass' Director through the Innovating for Growth programme: Financial management 1:1 Part 2
Each quarter, we pick 18 high-growth businesses to take part in our Innovating for Growth: Scale-ups programme, where businesses receive £10,000 worth of tailored and bespoke business support and advice. Not only do businesses gain three months of guidance, they also receive automatic membership to our Growth Club and their own Relationship Manager.
This quarter, we’re following Haroun, Director of JRPass, a train travel company for those exploring Japan by rail. Haroun will talk us through each session as he progresses through the programme to get the successes and challenges of what it’s like to run a growing businesses. You can see Haroun's previous posts about product innovation 1:1, intellectual property 1:1, marketing, branding, intellectual property, financial management, product innovation, marketing strategy, branding and research and developing a growth strategy on our blog. In his latest diary entry, Haroun has his second session on financial management...
If you have been following the blog you will know that at JRPass we are in the midst of planning another website offering new services. Over the past few months we have used the sessions on branding, marketing and product innovation to develop this further. This time, the second of the finance sessions, was really helpful as we dived in-depth into modelling with the adviser from Metavalue.
We have a couple of options on new partnerships for the website, so the main focus of the discussion was which of these would be the most viable option. The conversation involved our margin, potential site visitors, conversion rate, payment costs, staffing costs, average basket size and advertising/marketing budget. After we got grip of all these numbers and worked out a financial template, we agreed that the following assumptions and points would have to be further investigated:
- Before any additional mark-up the initial business could be low-margin so it will be important to control costs.
- We made assumptions on support costs and UK vs Japan-based staff. These would have to be validated.
- It is important to test all the inputted data and update them as we start trading, for example average order sizes and conversion rates. Pirate analytics (yes, I said ‘Pirate’) will help as these allow you to track data on visitors, post per acquisition etc. A useful guide on start-up metrics can be found here.
- Briefly, we also touched on a previous conversation about potential exit routes. Pitchbook news and Crunchbase were mentioned as good sources of news and information.
There's only one more session left and on in my final blog, for the benefit of prospective applicants, I will talk about how I feel you can get the best out of the scale-up course. Also, whilst we are talking about budgeting, inspired by all these spreadsheets and finance chat, we wrote a blog on budgeting for a trip to Japan.