Upon setting up a new business and operating successfully with a significant number of customers, you can quickly reach a point where you need to take on extra support for the day to day management and operation of the business.
A number of years ago, the business that I had founded and was operating reached this point and I decided to bring a partner on board to provide office based operational support while I focused on going out into the marketplace to secure more sales and grow the business. During this time, I was out in the field securing significant sized contracts, so as far as I was concerned the business was doing well and the money was rolling in.
However, I couldn’t have been more wrong.
It wasn’t until I received a call from my accountant that I became aware of the true situation. The partner I had taken on to ensure the smooth running of the business had not been correctly invoicing our customers and as a business we were owed a considerable amount of money for work that we had carried out. In addition to this, payments that were being collected were not being recorded against the corresponding invoice and, therefore, we were unable to identify which invoices had been paid and which were still outstanding – meaning that we couldn’t even chase customers for outstanding payments.
As the cliché goes – cashflow is the life blood of any business, and we were in a serious situation. A very tough time ensued for myself and my business partner as we worked hard, in conjunction with our accountant, to get things back on track.
Without a doubt, it was the hardest business lesson that I have learnt, and my advice to everyone is keep an eye on every part of your business, even when you have appointed suitably qualified people to manage areas for you – it’s of paramount importance. Some might accuse me of making a school boy error but with little experience and a blinkered focus on growing the business and securing sales, it was an easy oversight.
Of course you must place a level of trust in your employees but no-one is immune from human error and mistakes can easily be made unintentionally, as my story demonstrates.
You may be surprised to hear that I remain good friends with my ex-business partner but we have both learnt a valuable lesson and this has definitely contributed to the way that I operate my business today.