2014 News and Media

Education is key:
"Too many small businesses don't survive"

In the wake of Bridging and Commercial's article on SME finance, a live twitter interview took place on the subject.

Just Cashflow's twitter interview with Bizitalk discussed whether a national qualification for company Directors should exist?

The debate saw a number of viewers participate. Some believed it was a bureaucratic idea that may stifle market competition. Others felt that a qualification would help individuals understand how to navigate the daily complexities of corporate life from the top and may even prevent businesses from going into the red in the future.

B&C caught up with Just Cashflow's John Davies to chat about the debate, and he took the time to elaborate on his opinions.

On the matter, he said: “I have followed with great interest the debate caused by my call for a national, University led qualification for potential directors. I suggested it should cover a range of topics including finance, employer responsibilities, sales/marketing and planning.“

“I believe this for two main reasons. Firstly, Just Cashflow sees a lot of applicants that are totally on top of their business, KPIs and their future investment plans. However, too many don't appear to grasp the basic business fundamentals and, as I said in the original article, alarm bells start to ring when someone doesn't know the difference between a cash flow forecast and a P&L. Those that don't inspire confidence are going to struggle to raise finance.”

John then explained that this opinion sprouts from his own personal experiences.

“When I first started out in business I fell into the trap of not knowing what I didn't know. If I had studied for the type of qualification I am proposing I would have been able to avoid a number of costly mistakes.“

“I have great empathy with one of the postings the article prompted with a lady remembering shortly after she started work seeing the heartbreak caused by her employer going into administration and the redundancies that followed. Too many small businesses don't survive.“

“I wasn't calling for more bureaucracy that would stifle small businesses and the next generation of entrepreneurs. Quite the opposite - let's give creative talent the foundations to build tomorrow's successful businesses.“

“Creativity and entrepreneurship are great attributes but you still need to get the basics right. If you plan to see the sun rise each day but spend all your time running east you are never going to achieve your goal.“

“No matter how creative you are, enthusiastic, hardworking or bloody minded - your plan needed a fundamental basic - head in a westerly direction. Basics matter and learning this before starting your business will be a great investment.“

John wrapped up his points by acknowledging that a university led qualification may prove too expensive or time consuming for some.

“However, this debate will have served a good purpose if it causes entrepreneurs to stop and think about where they can gain valuable knowledge and education before opening for business.”

“You just have to type into any search engine - Cash Flow, KPIs, Finance, Employment Responsibilities etc. and there is a wealth of information to get you started and point you in the right direction.”

Date Issued 23 October 2014.

Follow @justcashflowuk on Twitter for more like this.

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