Innovation and enterprise blog

07 July 2014

Confusion costs cash!

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Jm webOur resident finance expert, Johnny Martin explains the most common finance mistakes that he has come across.

One of the hardest things when you are starting or running a business is getting to grips with the financial jargon and of course the numbers!  Too many business owners think that it’s OK to muddle by and that somehow it will be alright on the night.

As a result, many don’t start because they can’t raise cash, or they start and crash and burn because they run out of cash or they start and create a really successful business with the help of a (so-called) business partner who goes on to rip them off so they lose out on their cash! You wouldn’t believe the number of times at my workshop at the British Library, people say that’s what happened to me!

 So what causes this confusion and how can you make sure you understand your business finances and make sure you don’t waste cash? 

To start, let’s cover THE biggest cause of confusion and especially confusion between business owners and finance people – why is profit not the same as cash?!  Well if you were running a very simple fruit seller business, buying on the wholesale market, selling on a street corner, and chucking out unsold fruit at the end of the day – then the increase in cash in your pocket would be the same as profit. 

BUT as soon as you start selling on account, buying on account, having stock, buying equipment then cash and profit are different in the short term. 

This explains why you have two reports – the cash flow looking at cash and the profit & loss report which matches income and expense when they happen i.e. based on activity.  The profit and loss is there to help you assess profitability or viability – can you sell for more than your costs?

If you didn’t match income and expenses in the same period you would never know your true profits.  For example you hire a freelancer but they don’t invoice you at month end, you would still make a provision for these costs in your management costs. 

Otherwise you would understate freelance costs in the month when they happened and over state in the month the invoice came in or indeed when it was paid…This is known as accruals accounting – matching income and expenses based on activity.

To help overcome this kind of confusion I run a regular workshop at the Business & IP Centre called Get Cash Flow Confident.  If you come to the workshop you also get access to my online training video Talk Money and a 5 year forecasting template. 

Whatever stage you are at – please, please, please don’t ignore finance.  Successful businesses understand their numbers, know their numbers and act on them.  By all means delegate finance but don’t abdicate responsibility – it is just too important.

09 May 2014

Business book reviews from Dr Stephen Fear

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Ambassador Stephen
Dr Stephen Fear, our Entrepreneur in Residence and one of the Centre's Ambassadors shares the latest about his series of business book reviews held in the Centre.


Books have always formed a big part of my life. Growing up I was a voracious reader, something that has never left me.

Last year, it was suggested to me that I should consider hosting a book review located at the Business & IP Centre, focused on business books.

I started to think about how to do this in a way which would benefit entrepreneurs and small business owners using the Centre, and possibly a much wider worldwide audience online.

My first attempt at getting it right had its challenges due to the UK being hit by heavy snow! Our film crew couldn't get into London so we ended up doing the practice run in a penthouse apartment I own in Bristol with a hand held camera. It was all very much a practice run, but we put it on YouTube anyway, exactly as it was. Clearly it was much too long and the sound was poor but it was our first try so I hope we can be forgiven for that.

Thankfully we have progressed, and the review is evolving into something that I hope will assist the huge community of UK entrepreneurs develop their businesses.

Each month I intend to review two books which I have read and which I feel are relevant to the SME community. Where possible I will have a guest author on the show. In March 2014 I interviewed Susan Gunelius, successful author of many books including, The Dummies Guide to Blogging and Social Media.

So what's next! Well, in July I will be focusing on two more books, the first is essentially a work manual written by chartered accountant Johnny Martin which explains how to raise capital and manage cashflow for SMEs and is called 'Understanding Your Business Finances" and the second is a book by Rasheed Ogunlaru, called 'Soul Trader' which focuses on getting your mindset right for success.

Although very different, in that one concentrates on hard facts, and the other on a rather more spiritual aspect, both are important for anyone seeking success in business. Unless you can clear your mind and focus, absorbing the information from Johnny Martin will be tougher to take in.

Have a look at some of the previous reviews and make sure you keep an eye out for the next one!

If you have a favourite business book that you would like included in a future review, let us know via Twitter or Facebook.  I will do my best to read it and review it in future programmes.

09 December 2013

Helping to make a success story - Children's Qur'anic Pop-up Book

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Elephant_imageCrowdfunding is all the rage these days, as it has proved a real alternative route for funding a new idea or product.

The current top three are Kickstarter, Indiegogo and RocketHub, with new players appearing almost daily.

So I was not surprised to find that one of our customers had taken this approach to get funding for her Children's Qur'anic Pop-up Book and 3D app. Hajera Memon is the Managing Director of Shade 7 Limited and has launched their funding campaign this week on Indiegogo.

I don't really need to tell you too much here about the project to fund their first book Story of The Elephant: Surah Al-Fil, because the funding page is pretty comprehensive. But their aim is to become a global, multilingual publisher of premium pop-up Qur’anic educational story books and digital apps that help children learn about Islam in a fun way.

It was great to hear that Hajera was invited to the Small Business Saturday launch event at No. 11 Downing Street in early December:

I had the amazing opportunity to meet Chancellor George Osborne and show him the pop-up book – which he really liked!

Even nicer was to read her comments about the Business & IP Centre:

I would also like to take this opportunity to thank you all so much for your extensive time, patience and support with the development of this project and for getting us to this exciting stage!

You’re a really special group of people whom I’m very grateful to know and you make me feel so pleased with the decision to try and join the entrepreneurial world, regardless of how things turn out! You’ve all added your own special contributions to my start-up journey and I really wanted to say thank you.

It is with your encouragement that I have had the strength to continue with each stage of the business and I really appreciate the efforts and invaluable advice you’ve all shared with me throughout. I pray this venture is successful and will be something you can all be proud of!



Neil Infield on behalf of the Business & IP Centre