Prior to setting up my business Clear Books, I spent two years programming as a web developer and then three years training to become an accountant. I had always yearned to establish and build my own company and in 2008 took the proverbial leap of faith, in the process leaving a promising career as an equity research analyst.
One of the first lessons I learned as an entrepreneur is to seek honest feedback. It’s in my nature to keep coming up with new ideas and starting out I had lots of ideas I believed could work, but a second opinion, and in fact several other opinions, can help keep you on the ground and on track.
Looking back, some of my ‘brilliant’ concepts were highly questionable, but the one that did appear to receive widespread nodding (including my wife who was my harshest critic) was cloud accounting. There’s nothing wrong with a head buzzing with all sorts of new things, but I’ve learned that validation is important, otherwise it’s easy to waste time and head off down several blind alleys.
Although I thought my idea for an online accounting software business was completely novel and unique, in fact it wasn’t. At least three other companies in business for longer than Clear Books were already doing it. Fortunately, the industry was still in its infancy and each of those businesses and mine was snapping at the heels of the established software accounting giants, such as Sage. It would have been easy to think, ‘Ok, I thought I had a unique idea, but actually it’s more of a me-too so I’ll give up now’.
Never give up
The lesson I learned from this is that, even if you think you have a unique proposition and it turns out not to be so, don’t be put off! American inventor Edison was once quoted as saying, ‘Many of life’s failures are people who did not realise how close they were to success when they gave up’. There are still strategies that you can have in place to establish a foothold and grow your share of the market. An invention doesn’t just end once it’s been produced; it’s an ongoing process of evolution and keeping ahead of the game. New ideas simply enhance the proposition.
Although I trained as an accountant and understood finance and numbers, in reality I knew very little about sales and marketing and I started out with no business plan, too. I had ideas and what really drove me in the formative stages was a passion and eagerness to get things done as quickly as possible. However, desire doesn’t account for everything as I quickly learnt.
When speaking to the very first accountant who showed an interest in my offering I admit I was a nervous wreck. This guy had 200 clients and that would easily have doubled the number of businesses using Clear Books. I paced around my living room as I spoke to him with no structure to the call, and I was hopeless at explaining the benefits of my business. Needless to say he didn’t sign up and I could almost taste the egg on my face! What I learned, and continue to learn to this day, is that the only way to get better at something, even if it’s your worst fear, is to face up to it and practice as much as possible.
I probably made all sorts of other similar mistakes in the early days, some bigger than others, and looking back I should certainly have had a more focused approach. I’m sure I would have saved time and would also have taken more guidance and advice if I had actively sought it.
Starting out in business on your own can be a lonely but equally highly productive existence. My daily ten-second commute from bedroom to makeshift office in the living room obviously saved me a lot of time not travelling and I worked energetically every hour that I could. I had never hired or managed people before and there came a point when quite obviously I couldn’t do everything myself as the business grew. There came an inevitable time when I had to Iearn several of rules about letting go.
Don’t wait – delegate
For example, I coded the original Clear Books system and it was a very difficult role and a big responsibility to give up and pass on. Admittedly, I didn’t trust that anyone would understand or could learn how core parts of the software worked. The impact of a VAT return not operating or the accounting engine falling over would have a disastrous impact on customers. However, with time as a personal decreasingly available resource, I had no choice but to start letting go and start delegating – and thank goodness I did!
Carrying the burden was a huge stress and delegating the responsibility was actually a huge relief and the right thing to do. I haven’t touched the code since the end of 2013 and I now try and delegate tasks as much as possible. It’s certainly something I wish I had acknowledged sooner than the four years it took me.
I also learned that the urgent need to fill a role by hiring someone quickly should not blinker the potential long-term impact if that individual is not a good match for the company. It can cause all sorts of problems that are often challenging to deal with. My thinking changed significantly and this is why we introduced a standardised psychometric test so we can benchmark reading, numeracy and logical thinking.
Overall, I’d say that for someone with no prior experience of setting up and growing a business, I haven’t done a bad job, and certainly the journey has been full of learning points which I’m happy to share. As the business has grown and we’ve attracted many thousands of small business customers, this process continues unabated and that’s also something else worthwhile that I’ve learned.
Tim Fouracre is founder and CEO of cloud accounting company Clear Books.