In our latest growth conversation blog we speak to Pauline Rigby, partner in the Business Law department at Forbes Solicitors, which is also a member of Boost and Co.
What type of advice is in demand at the moment from growing businesses?
Recently we have seen an increase in instructions for all the areas of expertise within our Business Law department. In particular, we are seeing an increase in owner-managed business sales and acquisitions and re-structures. We have also had a lot of businesses wanting sets of terms and conditions drafting to govern their sales of goods or services and to attempt to protect their cash-flow.
In your experience, what are the top three challenges facing growing businesses at the moment?
Firstly, despite us seeing evidence of a change for the better there will be some businesses who are still nervous of biting the bullet and spending on the proper legal advice they need to protect their businesses. Investment in a shareholder agreement, partnership agreement or a decent set of terms of conditions of business can save so much money in the long-run.
Conversely, many new businesses splash out on a full range of branded goods from off as if they want to create an instant brand before they are even known in the market. Time and money would be better spent by having a proper marketing strategy in place.
Branded hand-outs are good as reminders of your business name but establishment is key. Lastly, businesses need to be careful when coming out of the recession that they do no over-commit themselves by taking orders and then not having the ready cash to pay for materials, leaving them with cash-flow situation and putting themselves at risk of wrongful trading.
What high growth business do you most admire and why?
Online fashion retailer Boohoo.com. A Manchester based family set up Boohoo.com and are now one of the richest families in the country after selling a £240m stake in the business in March 2014. In a ten month period the company’s profit margins grew from £3.5m to £10m and they did this by differentiating their brand and knowledge of their own market.
Which high growth entrepreneur would you most like to invite over for dinner and why?
Jo Malone. Her story of setting up her own perfume and fragrances business and turning it into a renowned brand is remarkable. I would love to hear her story and hopefully test out some new fragrances at the same time.
If you could go back in time to the beginning of your own business growth journey, what one piece of advice would you give your younger self?
That confidence in yourself and your knowledge comes within time. Don’t be too hard on yourself.
How can Lancashire businesses ensure they continue growing?
The Lancashire manufacturing sector seems to have weathered the storm very well. We would always recommend that Lancashire companies make use of all the support services on offer throughout the county.
There are so many free seminars available ranging from advice on social media to advice on protecting patents and other intellectual property rights. These seminars are also a great opportunity for making new contacts, making your name known and growing your business further.
What steps can businesses take to make themselves a better investment proposition?
Plan ahead - have a business plan and marketing plan in place before it is requested by any bank or funder. Speak to an accountant and find out what business vehicle is best for the business now they are in a stage of growth – is it still appropriate to be a sold trader?
Also, having proper legal contracts in place makes the business appear more professional, established and well-protected.
What are the key legal considerations for growing businesses?
For growing businesses it can be easy to get caught up with doing the work, marketing it and being bogged down with admin. Legal matters can be put to the back of the queue.
We feel it would be beneficial for owners to at least speak to lawyers about the documents which may assist growing businesses, even if they are not yet ready to commit to a spend on legal work at present.
How can business owners protect themselves against the key risks for growing businesses?
As mentioned above there are certain legal contracts that businesses should consider to protect themselves in the future. Of paramount importance is having a set of robust terms of business in place.
Other commercial documents pertinent to the business should be considered, especially with a view to protecting any intellectual property rights. In addition, the owners of the business need to protect themselves by regulating the arrangement between them and their fellow shareholders or partners by putting an appropriate agreement in place.
All people get on when they start off in business but as businesses and their value grow, there can be fallings out and without pre-agreed provisions any break-up of shareholders or partners can be a messy business.
Find out more
To find out more about Boost Business Lancashire, and to start your growth conversation complete our online form or call 0800 488 0057.