2nd October 2014
Like most mums, I am a cook and dare I say, a wannabe “star baker” – although who isn’t these days with The Great British Bake Off and the lovely Mary Berry and Paul Hollywood gracing our screens?!
I am also a book keeper by trade and handle the book keeping for a number of local businesses.
The other day it dawned on me that the two are linked and no… I am not talking about ‘cooking the books’. I happened to be speaking to a new client, a past colleague, who is looking to start her own small business. She knew I had a lot of book keeping experience and asked me, simply “Where do I start?”
As we spoke, I realised I was effectively giving her a recipe and a method, much like I had provided another friend the day before when we discussed a meal I had cooked!
And like a recipe for a cake or meal, a recipe for a good business is finely balanced and measured to ensure it turns out correctly. Particularly if you think about it like this:
- Not enough sales and your business will sink
- Too many sales may result in uncontrolled rise (growth)
- If you don’t start with a plan (method) how will you know what to do when?
- Too many ingredients (products or services) may overpower each other
- Take your cash out too early and your business may collapse
- Check your business progress regularly and you can catch a problem before it arises and avoid getting burnt!
- ‘The first bite is with the eye’ – so present your business so it looks attractive and tastes nice!
When you look at those businesses that excel they do seem to have a recipe and they stick to it. They might switch the odd ingredient here and there but, by and large, they turn out the same each time, because they stick to the recipe. Franchises are effectively a pie machine!
Then consider those that fail and look at why. They were either cooking something their diners didn’t want (lack of demand) or simply couldn’t eat it all (too much supply for the market) or they deviated from the recipe and the business turned sour.
But my theory even stands up to the concept of sharing recipes. Under John Caudwell the Phones4U brand grew until he sold it for nearly £1.5 billion. But in selling it, the buyers tried to change the recipe and in September 2014 the business went into administration.
And finally we have to accept that not everyone can cook – in the same way that not everyone is happy/able/willing to run a business.
So it’s not that random a connection after all!
To talk books – either cookery or financial – or if you simply want some support in the kitchen of your business, please contact me – if all else fails we can eat cake…!