Buying into yourself

Invest in a business, not in a dream

How unfashionable is this statement? The sole mission of any business is to optimise value for shareholders.

Try dropping that into a politically correct dinner party, or, for the really brave, putting it on a placard and joining an anti-Wall St demo.

You don’t have to go that far. Shareholders are hardly flavor of the month anywhere.

Yet most of us are shareholders one way or another. Anyone who has a pension scheme probably holds shares in a bank, whether they chose to or not.

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Financial literacy: knowing what you know

Aligning business intuition with financial arithmetic

You've got a brilliant idea. You make an excellent presentation to the board. A director asks: "What discount rate are you using for NPV over five years on this."

You’ve got no idea what he’s talking about. Your confidence slips. So does your momentum. You say you'll get back to him.

A lack of financial literacy won’t necessarily hold you back. There’s plenty of self-made business people with no business education. The issue often arises with success. You were a great salesmen and an even better marketing director but now you are running the whole shop. There are some things you are expected to know.

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Less Strategy. More Action.

How many times does this happen? Everyone arrives at the strategic offsite on Friday night. Most people party too hard that evening. More than a few of them state what needs to be done if things are going to be sorted out – whatever that means.

On Saturday morning, the session kicks off. There are a few hangovers but the facilitator is good at his job and by mid-morning a sense of inspiration is starting to emerge. There’s butcher’s paper on the walls. There are circles and arrows on the white board; and you’ve just bonded more closely with a difficult colleague.

It’s humming.

By Sunday lunch, everyone has agreed on the mission statement. The long term targets for the strategic plan are in place and with luck there will be time for golf.

A month later it’s not humming at all.

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Should you start a business?

Type “business plan” into your search engine and you’ll find thousands of templates. People write lots of business plans. It's something you have to do if you are going to start a business. But before you do all that, there is one key question you have to answer: should I actually do this?

At a rough guess, probably two out of every three people I know who have started a business wish they hadn’t. That’s not necessarily because the business failed. A lot do, but a lot don’t. And a lot make very little money.

Nor is it because they didn’t have a good idea, or lacked commitment or energy. It is more that it just didn’t turn out to be as wonderful as they thought it was going to be. It’s a little like having a best-ever holiday. If you go back to the same place two years later expecting the same, chances are you’ll be disappointed.

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