If position, position and position is vital in identifying and enhancing the value of an asset in the property market then cash, cash and cash remains paramount in any business but never more so than in a new venture in these cash strapped times.
Starting a business in a recession may not be your first choice as an entrepreneur but if in fact, whether through desire or as a result of unforeseen circumstances, you find yourself in such a position an enterprise started in a downturn may not be any less successful than one started in a boom provided, whatever the temperature of economy is, the key principles of business management are adhered to.
Management books abound that include such essential ingredients to success as; a business plan, a budget, a marketing strategy and of course a people management and development process, all of which of course are very worthy, maybe even for some particularly institutional investors a prerequisite, but in my 25 years of experience of buying and selling over 300 businesses they are ingredients that, without the recipe cannot be blended into a meaningful dish.
Anyone can be taught to cook, as indeed Jamie Oliver has proved, but only a few will make truly great chefs. In every recipe one or two special ingredients are what actually help turn the dish from a simple supper to a magnificent dinner.
In business this is cash. You simply wont survive if you;
a) Can’t make it
b) Free it up
c) Access it from alternative sources if your own particular well has dried up.
This ingredient has always been particularly special but now it is particularly scarce.
Here is my recipe for cash management;
Jo Haigh's Business Recipe
So you now have a recipe and the all important secret ingredients – so it can’t fail… or can it?
Life’s virtues include faith, hope and charity and behaving with such moral fortitude must surly bring its rewards.
Business virtues are in fact not too different, replace faith with belief and enthusiasm in you products and services; it’s seen many a despondent entrepreneur through dark times, and instead of hope how about intuition for the truly talented, this will rarely let you down. And finally charity, a new business is very greedy and not just for cash but of your time and energy.
Like an athlete training for a marathon, it will sap your strength and bleed you dry. So practice patience, a skill many entrepreneurs sadly lack but which if harnessed can deliver more than any other business virtue.
Some make millions by putting all their resources on a single play of red or black, but the shrewd wait, judging the market and then seizing the opportunity, watching as the avaricious and foolhardy stand bereft.
Being patient doesn’t mean doing nothing, far from it. It means optimising the moment in a downturn. There will be lots of these around for the shrewd and savvy entrepreneur so your choice should be someone who
– Makes things happen
– Watches things happen
Or someone who rather sadly says
‘what just happened then?’
Seen in the right way the recession brings not just problems and disasters, which it certainly does, but also opportunities to be grasped.
The question is are you up for the challenge and the ride of a lifetime?
Jo Haigh
Head of Corporate Finance for MGR
www.mgr.co.uk
www.jo-haigh.com
About the Author
Jo Haigh
Jo Haigh is a Partner and Head of Corporate Finance for MGR, a company based in London and Yorkshire and a partner in the FDS Group, a specialist training and development business.
An experienced dealmaker, Jo specialises in putting together the right deal at the right time and in the right format for growing businesses throughout the country. She has bought and sold over 300 companies in the last 20 years specialising in owner managed companies. More >>