Exchequer: Forfeiting business expertise

Eduardo Loigorri and Rob Steele founded business and accounting software company Exchequer in 1984, when they were both 18. Without any external funding, the business has grown to sales of £10 million.

Think carefully about external funding opportunities

I wish I hadn’t resisted external funding for so long. Eighteen years is a long time to stick out when you are growing your business. We turned down business angels, and even customers who were interested in investing. My regret is not so much about missing out on the finance, but more about forfeiting business expertise. We had very little at the start and didn’t have much to lose at all – we swapped £45 a week jobs as apprentices to launch Exchequer. But we were very cautious – and this has meant it has taken us longer to get things done. I wouldn’t advocate someone taking as long as we did.

Being bold can pay off

Traditionally, we have looked at one opportunity at a time. But there is a good argument for taking on two or three, and budgeting for the fact that one will fail, because the window of opportunity does not stay open for very long. But then this all goes hand in hand with having the resources to juggle several issues at once. Your comfort zone is central to all this and it can be a difficult decision if you are risking your own money. It’s not about being risk-averse, but about being risk-wary. Right now we have half a dozen opportunities – we’d like to pursue all of them but we need a hero behind each of them.

Time to market is an issue

I don’t want to sound like we had divine insight, but the timing of our products has been good. We were there with Windows, XML and the internet, but I wish we’d moved to develop our products earlier on, to shorten the length of time to market. This is because we could have grown our user base much more quickly, and the fact that we haven’t has been quite a frustration. We’ve not taken the quickest route to market, but we are a cash-rich business.

Invest in home-grown staff

Staffing has been an issue. We found that it was becoming increasingly difficult to find recruits to fuel our growth, so we took the decision to grow our own. This means that we are now looking at CVs when we need to, rather than all the time, to find a ‘star’. And we can afford to get a star when they become available, rather than when we need them. We now have an open door policy to get staff to send CVs in – it’s a nice position to be in.

Never underestimate the value of a non-executive

We met Roy Filling, who became our non-exec, at an awards ceremony where the prize was 20 hours of free advice. At that time, the business was ten people strong and looking to move out of my parents’ garage. Even back then, Filling showed us how to look at issues such as corporate governance and he was also a great front man when we were at the bank looking for finance. He gave us great credibility and has been instrumental in helping us grow the business.

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