A City Law Firm Limited started up in 2009 right smack in the middle of the recession, how hard could it be?
Well 6 years later growing from 2 to 10 fee earners, triple turnover, a whole floor of offices and consultants aboard I, as the founding partner, can happily say "the hardest thing in the world, but well worth it". Would I do it again? If I had predicted the tough times coming maybe not, but now I am here - I have no regrets.
1.When clients come to me ready to take the jump I offer them the following honest advice: Have a good accountant and lawyer at the beginning. They save you money, stress and if used early on wasted time, litigation, losses and wealth of support.It was only in year 4 and now in year 5, having found the best accountant, I understand how to save money, streamline my company processes and feel genuinely supported and protected;
2. Cash flow is key so (a) know your clients and be careful extending credit or discounting as they can let you down; (b) Make sure your terms and conditions/contracts protect you from cancellations, non payments, add on costs and interest for late payments and ensure if clients are abroad you have jurisdiction to pursue them; (c) Have clear and tight debt management processes that you review regularly and stick to them;
3. Think of alternatives to expenses that may not be necessary straight away: (a) virtual offices or hubs that allow you to use its facilities rather than staying at home or paying for a lease; (b) outsourcing telephone services, photocopying, typing and HR services for example (c) rather than employees on salaries try sub-contractors and self employed consultants;
4. Market research is vital - where are your clients going to come from and track where they do. There is no point spending money on magazines if your product or service is best sold online or you don't track if any business comes from that source. Understand yourself before you engage business developers and SEO companies who your client is, where they will come from and what best will get you there. The best marketing comes from you so understand the area and then impart this on your developer. Make sure you review your contracts on commission and leads to make sure they are working for you, protect yourself by a tight contract that prevents misrepresented facts;
5. If you are in business with friends, family or partners be warned it maybe fine now, but why not prepare for the worse or to avoid any fall outs. Have a shareholders or partnership agreement that clearly outline your obligations, permitted responsibilities , when issues need joint consent , what happens if you disagree or one wants to leave - it gives you a transparent platform to grow. It's also a document an investor or new partner/shareholder would expect to see if joining you;
6. If you can protect your company name or logo by registering it as a trademark. Sadly , buying the company name and domain is not sufficient and someone could buy this and then stop you using it after you have spent time developing the goodwill in it;
7. If you need funding in the future do you understand your options, what would be needed and reliefs available. Having your processes, legal documents and accounts in this format means you stand a better chance of securing investments or loans or grants when you need them;
8. Staff - nothing is more key! A happy, trained and informed team that represent you and your company will attract and retain clients. Keep them aware of the companies goals, what targets they have, monitor performance and praise or constructively refocus. Make sure you have clear and up to date policies, staff handbooks and contracts to protect you as an employer but empower them as valued staff. Understand the grievance and disciplinary procedures to afford you the best chance of avoiding claims and disputes;
9. If you ARE regulated ensure you understand the compliance issues and keep yourself updated. If not regulated make sure you don't attract the attention of any regulators for the wrong reasons. For example trading gold or diamonds or wine can fall into regulated activities requiring FSC registration. However, if done in a certain way no regulation is required, but if your website or materials concerns them you could find yourself party to an expensive investigation. If in doubt have someone, like our compliance team, check it all out before publishing as we have managed to get a number of clients out of FSC investigations of this nature, but prevention is always better than the cure; and
10. Do you understand your exit plan or ultimate aim? Some businesses may need run off insurance, you may need to sell on your shares, do you want to retain your clients if you leave the business, what about a retirement plan or selling the whole business as a going concern. This can impact on how you start your business now, how you contract with other parties or the length of time you engage in a lease or the likes.
Plan for the future, set out your objectives with trusted parties and keep abreast of how your company, clients and cash flow are developing.
For more information contact us…
0207 426 0382