RSS feedsGraham Wooding
Senior commercial manager, HSBC
Mark's challenge now is to establish his company in what is a highly competitive market place, where the prime objective for most people moving house is to keep their costs to a minimum. A review of the websites of various HIP providers shows many are using price as their unique selling point.
Mark is targeting the consumer both directly and via business partners. This needs real focus to establish what is going to give the best return on the investment of Mark's capital and time. In terms of volume, the link up with professional partners should give a sound base to build on and give real credibility to any business plan prepared to support the gearing up to fund the projected growth in turnover. However, most estate agents and solicitors will already have HIPs providers in place and if the customers are not already signed up Mark will need to able to demonstrate how he is going to win this business.
The factoring agreement should help cashflow, but only on business partner sales, and the projected cross-sales will improve profitability. Both will only be successful if actual sales build quickly and this must be Mark's prime objective. A critical review of the business plan will show how realistic the numbers are.
John Dunsmore
Managing director, British Chambers of Commerce
One of the risks businesses face when they experience early rapid growth is the stretch that it puts on resources and the inevitable impact that has on customer service. In these early days any dip in the quality of your delivery can lead to potentially crippling negative PR and word of mouth.
Equally, staffing ahead of confirmed or predictable need puts a burden on the business financially when cashflow is still important to control. So think laterally about how you might resource future demand. Build a network of freelan ce or contracted staff that can be scaled up or down quickly to meet demand. Invest in training them and giving them strong tools to ensure they deliver a consistently high quality service. Learn a lesson from other professional service businesses, where freelance resource is used to supplement a core of full-time staff. This will mean that while you wait to see a predictable revenue stream develop, you can capitalise on as many opportunities as possible without the cost of staff that are expensive and may not be required in the medium term.
As we look forward into 2008, with the predictions about our economy softening and the inevitable impact on house sales, taking a prudent approach to staffing now is even more important or you risk using that investment capital on staffing rather than advancing product development and marketing.
Peter Ewen
Managing director, Venture Finance
Bluechip's business plan, providing HIPs, presents the company with an exciting opportunity to grasp a significant share of a relatively new market. But despite these prospects, and because of its young age, Bluechip still needs to exercise caution in its financial dealings and ensure that its cashflow channels are unobstructed over the coming months. It is important to remember that the current slowdown in the property market presents a significant challenge.
There's no doubt the global credit crunch is affecting the UK economy. With this in mind, Bluechip's main priority from a funding point of view should be the consolidation of its current position to provide a platform for sustainable growth in the medium to long term.
Bluechip needs to continue to keep a tight hold on cashflow, to ensure that it can pay their creditors on time and not jeopardise important relationships.
What's more, as a company just starting out, Bluechip will have a number of key development targets in 2008. Predictable and healthy cashflow is of paramount importance to realising those targets during these vital early stages of the business plan - for instance, the successful launch of its innovative 'hidden defects insurance' offering.
