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Master of the web, cash slave

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Steven Smith describes himself as an “accidental business owner”. A former teacher turned IT educator, his first passion has always been to inform and advise his clients rather than focusing on day-to-day business matters. So it is perhaps no surprise that he was somewhat naïve when he launched his business.

“I don’t think you start out a business like mine with the intention of being a business owner,” says Smith, the founder of United Focus, a South Australian internet strategy and advisory firm. “For me it was a by-product of fulfilling a desire to spend my working day doing work that really interested me.” The upshot is that the mundane, but important duties such as managing projects, writing invoices and controlling cash flow have often been left in the lap of the gods. Smith confirms: “I don’t find the business aspects – accounting, invoicing and general management – at all interesting and I am not very good at them.”

Since launching United Focus in 1995, however, the former history and English teacher has learnt a valuable lesson – as boring as some business tasks may be, they still have to be done. After reading Michael Gerber’s seminal book on SME management, The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Smith realised he needed at least three components to his business: an entrepreneur, a technician and a manager.

“I was the entrepreneur and technician, but I needed a manager. Luckily, my wife had managerial skills and, being at home with small children, she was able to fill that role.” 

Teaching technology

Today, Smith sees his role as part communicator and part technology architect as he provides a link between IT systems and the wider business community. He helps clients plan, manage and improve their websites. “I help my clients understand what is possible, what will suit their needs and what they can afford. I also develop guidelines and standards for the web, deliver workshops and provide advice to governments about internet policy.”

Finding the right setting for his new business was an early priority for Smith, and again he broke the trend of the day and opted for a home-based operation rather than renting a bland, serviced office.

“The choice of a home office was driven by practical, financial and aesthetic considerations,” he says. “I considered serviced offices because I blindly followed the common wisdom that professional business people work out of formal offices. But when I investigated offices I found them to be more expensive than I had anticipated and I didn’t like any of them.” Grey industrial carpets, laminex surfaces and a lack of natural light did not appeal.

Today, Smith continues to challenge conventional wisdom. While many managers fear a national economic slump could lead to slower business for many SMEs, Smith believes it could open new doors.

“The economic downturn will make the internet even more important as a marketing tool for businesses. Consumers will be even more money conscious and will be more inclined to use Google to find the cheapest products and services.”

This means home businesses without a credible website will be more exposed to the economic downturn than others.

Smith says he will continue to stay in business until he stops enjoying what he does.

“I really like what I do. I enjoy the chase of getting new work and of helping organisations improve their websites. The ex-teacher in me also loves the research work, writing papers, presenting workshops and generally educating users and businesses about the web and how it can help them in their day-to-day lives and work.”

Smith’s cash flow ‘tricks’

  • Mark on a calendar when invoices are due to be sent and paid, and when bills and taxes are due and monitor it all.
  • Commence chasing new work at least six weeks before you see a gap in invoicing of more than a fortnight.
  • Don’t avoid chasing new work on the pretence of being busy doing marketing plans and reorganising your office!
  • Negotiate invoicing a client as often as practicable – don’t wait to issue one or two big invoices.
  • Make invoices payable in fourteen days – not thirty.
  • Always know to whom the invoice must be addressed, the exact wording required and request a confirmation of receipt of the invoice and an acknowledgement of the fourteen-day payment terms. This reduces the risk of a bureaucratic error affecting your cash flow.
  • Negotiate a commencement payment (up to 15 per cent) and invoice immediately you commence so at least you might be paid within two to three weeks of commencing work.
  • Monitor the payment of invoices and contact the client if payment is not received within two days of the due date elapsing.
  • Maintain a good relationship with your bank and speak with them before you hit a cash flow crisis. 

So, if you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, May 28, 2010

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