Sunday, 5 September 2010

You often hear that turnover is vanity, profit is sanity…..never more so than with a small business.

Increased volume allows you to not only increase turnover but negotiate your suppliers down on price. And whilst this can be quite an allure for a fledgling business, it often leaves you in an extremely vulnerable situation with your customer. With greater scale you get increased risk.

Understanding Your Terms and Conditions

Most of the big players understand the attraction they enjoy from small business and so manage a lot of the stock risk out of their own business through the terms and conditions they make you sign. The risk then falls on your shoulders as a small business in terms of returned product, reverse logistics, early invoice settlement discount, price promotions etc….all of it ends up being funded through the suppliers margin which is already a lot less than that which you would enjoy from a smaller, niche outlet.

It is very easy to overlook these risks in the excitement of getting your product onto the shelf of a major retailer. I’ve seen many businesses simply sign and return the standard T’s and C’s that a customer sends them (which are usually extremely aggressive) without negotiating.

They are often intimidated by the size of their customer, but there is often a fair amount of concession that the retailer can give you if you argue your case, especially if they want your product that much. Sweeteners such as a limited period exclusivity or a particular SKU that isn’t being sold elsewhere can help you negotiate better terms…..and remember if you don’t ask you won’t get!!

Tuesday, 27 July 2010

The New Face Of Venture Capital,

check out this slideshow. A fascinating insight into venture capital:
overview - Based on Morgan Stanleys study over a 22 year period on every single technology IPO in North America, only 1 in 20 startups made it to an IPO and only one in 20 of those companies created shareholder value afterwards, making the overall success rate 0.25% or 1 in 400!

change needs to be an intrinsic part of Startups - Think big, start small and be agile in response to market reaction!

VC's have started moving up the ladder and less receptive to early stage and pre-revenue propositions preferring de-risking of investment to potential ROI.

If you fail try to make it as early and cheap as possible.