NHS Innovation Accelerator Mentor, Adrian Downing, has supported Fellows in getting ‘business-ready’. Here, he shares his advice and tips for innovators and entrepreneurs looking to commercialise their health innovation and set up a business.
Many organisations place too little emphasis on the simple things when running a business. This impacts their ability to grow in an efficient way. Common reasons I have been given for this include: ‘not big enough yet to…’, ‘need more money to be able to…’, ‘not enough time or right people to…’, ‘we have just started or we are going to…’ and ‘I haven’t paid myself in …’
Most of these excuses are based upon a hope that the business will resolve the issues themselves, rather than decisions and actions being taken based upon a clear strategy. Everything that is done by a business should be about achieving this strategy.
- The strategy should be as simple as the business
Have a clear understanding of what is being achieved, how and by when. As a leader you must be able to communicate this in an easy to understand way. In smaller businesses, the strategy must take into consideration the aims of key stakeholders and your own personal objectives – alignment at a later date is financially and emotionally costly and wastes time.
- Keep the ownership and organisation’s structure simple
When there are not many people in the business, having clear responsibilities and delegation is critical.
- In this cashless society, have a continuous focus on cash
As long as there is more money coming in than going out, you have a better chance of achieving your strategy. Financial forecasts will never be 100% accurate, nor as smooth as you would hope. Understand the potential scenarios that create the troughs and peaks, and know what to do about them. Don’t allow financial issues to fester and sit around on a spreadsheet; act immediately. There are many different ways of solving a problem not involving the bank.
- Understand where money comes from
Certain customers will be more profitable than others, but the cost of acquiring and managing them often reduces their overall value. Generally, it is cheaper to retain a customer than win a new one or get an old one back. Understand the costs of acquisition, delivery and retention so that measured actions can be taken. Only generate low margins when a decision has been made to do so; otherwise walk away.
- Running a business is lonely, even when you have 10,000 around you
Don’t phone a friend or ask the audience. Find individuals who will challenge you, ask the difficult questions that make you uncomfortable. The first person that you ask, may not be the right person.
- Invest in people
Attract individuals that have the same passion as yourself. Be honest about their future potential from the start; including remuneration and skills improvement. Do not compromise because you are short of people, nor recruit in your image.
- Restrict time only to activities that add value
Develop a one-page investment report to track how the business is performing against the strategy and ensure that actions are completed in a prioritised order. For example, don’t spend hours on the brand. The majority of customers will not care too much and future changes will only make the 10 o’clock news if you are someone like Apple.
- Be boring and standardise as much as possible
Implement as many standard processes to running the business as possible; pricing, contracts, invoicing. Boring is good as it reduces confusion and time. Pay suppliers on time and build trust, as sometime in the future you may need their support.
- Start humble, have fun but know when to stop
Unfortunately, not all businesses are able to achieve their goals. Knowing when to stop a product, service or even the business is just as important as knowing when to grow and invest.
These 500 words cover 25 years’ experience of working with companies varying in size from one person to 25,000 employees. The majority of the issues are the same whatever the size. If you would like to discuss any of these thoughts, please contact me at email@example.com