When we founded Mihaly Slocombe in 2010, Erica and I had never been taught how to manage or grow a business. Naïvely we thought we could work it out ourselves, piecing together every fragment of the puzzle through trial and error. Our learning curve was steep and often rocky. I sometimes think back on those first few years and wonder how we managed to stumble along at all.
Out of necessity, we ran our business as lean as we possibly could. We set up our studio in our spare bedroom, we raided our parents’ attics for furniture, and we hacked together our website. We had no staff, no marketing budget, and did all our own accounting.
Though we didn’t know it, we had adopted a key element of Eric Ries’ lean startup methodology, the Minimum Viable Product. An MVP is in essence an accelerated build-measure-learn feedback loop, a low-risk testing ground for a company to tease out the kinks in its product, then iterate and improve it. Our version of an MVP was the most stripped back version of Mihaly Slocombe we could envisage, a company with zero overheads and nothing in our personal lives (like children or a mortgage) that demanded we finance it.
A crucial element of our MVP was managing the business ourselves. We were lean, but we still needed to count things: money mostly, in its various forms, but time, progress and documents too. For all of these, I turned to good old Microsoft Excel. I used it for timesheets, invoicing and expenses. I cobbled together rudimentary project schedules in it, used it for our quarterly BASs and tax returns, and eventually payroll too.
In my opinion, Excel is without doubt the best business management tool for startups. It’s light, cheap, infinitely customisable and exceptionally well supported. But it also relies on a lot of manual data entry. When our studio expanded to four people early last year, this reliance exposed its two main shortcomings. First, it’s very easy to make mistakes without realising it. And second, it’s not readily scaleable. I had a constellation of spreadsheets that were creating as many problems as they were solving.
Of course, my spreadsheets were only one part of the many facets of our business. But the increasing trouble I was having with them triggered a broader realisation that six years into Mihaly Slocombe we had outgrown our lean startup strategies. Despite promising ourselves we wouldn’t fall into the clichéd trap of undisciplined growth, we found ourselves with more work than we could handle but little in the way of organisational structure. We knew our business was thriving, but we had a poor grasp of how we could make it even better.
We had already relocated our studio out of our spare bedroom and into a swish new coworking space filled with beautiful furniture. We had commissioned a graphic designer to rebrand us and rebuild our decomposing website. We had two staff, a marketing budget, and an accountant. We were overdue in taking this same spirit of renovation to our business management systems.
So Erica and I put considerable thought into how we would tackle the huge job of transitioning the management of Mihaly Slocombe towards a more mature methodology.
I recalled some very useful advice from Simon Knott, who observed in a CPD event some time ago that he has always thought of his business as larger than it actually is. We understood this to mean that we needed to make decisions for our business as we wanted it to be, rather than our business as it was. Our ambition therefore was to prepare ourselves for growth, to set up systems that will help us monitor and improve the health of our business, and scale up as we do.
We put this philosophy into action at the start of this financial year, and embarked on a three year, three step renovation of our business management systems:
Step 1: Accountable accounting
Step 2: Predictable profitability
Step 3: Clear communication
In a nutshell, each of these steps was to be achieved by adopting software packages to address its specific goal: accounting software for accountability; resource scheduling for profitability; team collaboration software for communication. We would then build soft processes around the software to help enact our goals.
Now, as we near the end of the first year of this renovation plan, and gear up for the second, I feel it’s the right time to share my experiences so far, the research I’ve undertaken to prepare for next year, and my hopes for the benefits that this strategy will bring to Mihaly Slocombe. Stay tuned over coming weeks as I cover each of the three steps in successive articles.
This and subsequent articles will be grouped under the tag, renovating our business.
- Excel costs $100 a year, including the rest of the Microsoft Office programs. In addition to official Microsoft support, there are any number of useful forums filled with Excel geeks happy to share their wisdom. Try Excel Forum, Mr Excel or Excel Guru.
- Microsoft Excel logo; sourced from Wikimedia Commons; accessed June 2017.
Excellent article Warwick and I look forward to the future chapters!