Business Lessons Guaranteed To Help You Grow #1. 📈

Welcome back to Tom Scourfield’s weekly newsletter where I give you high-quality insights on building businesses powered by cash flow. Free ideas that get you to grow.

I’m obsessed with finding the “ah-ha” moments where everything clicks. The process of reviewing previous experiences and pulling out the lessons is a great feeling and prevents making the same mistake twice.

Let’s dive in…

There’s no such thing as truly passive income

Many entrepreneurs (myself included) start out looking for freedom and autonomy in life. This can be a great driving force and leave you with an amazing lifestyle full of travel, adventure and experiences.

Most people going down this route forget one important thing: businesses don't stop. Which means neither do you.

There’s a tonne of responsibility that comes with running your business. Even when you have all the systems and teams in place, you’re still responsible for everything.

Manage from a distance, don’t abandon (there’s a fine line)

Here’s how I learnt this the hard way:

I hired an accounting team to run my finances. They were responsible for producing monthly P&Ls, submitting my year-end accounts and making sure all my compliance was up to date.

The problem started when my contact at the company left and their replacement didn’t seem up to the job. There was a lot of miscommunication and progress was slow. I wasn’t too worried at first as I was preoccupied with other projects.

Then one day the problem hit me like a tonne of bricks. Tenants were phoning in saying that their rent payments weren't going through. (I had a real estate company for context). This is the last thing any business owner wants to hear, so I jumped on my banking app to find the account had been frozen.

This was due to our confirmation statement (a legal piece of compliance in the UK) not being filed. The result was companies h’s house freezing the bank account and looking to strike off the company.

Turns out my accountants never filed the statement.

While it’s easy to blame my accounts (trust me I did) it’s still my responsibility. Not carrying out a simple check caused me an admin nightmare. I had to re-route 36 tenant payments to a new account and move over 50 direct debit payments at the very last minute. Not to mention going through a lengthy process to reinstate the original account.

How To Effectively Manage a Business

The lesson I learnt here was that everyone and everything in the business always needs managing. That’s the price of freedom. Sticking your head in the sand and swanning off around the world will eventually lead to issues.

There’s no need for micromanagement, after all, if you’re paying someone to do a job then they should be doing it. Instead, I recommend setting up a system to effectively manage the team and company:

1. Set every member a KPI for their specific role

2. Understand that there will always be problems

3. Set consistent times to check in with your team

4. If something goes wrong, jump in and deal with it immediately

5. Create a company hub on Notion to quickly see performance stats

6. Set reminders for important events such as compliance and anything finance-related

Make sure this information isn’t just in your head and the team has visibility. For example, my new accountant knows exactly what to do when it comes to finance and compliance, but so does my assistant so they’re aware of any submission deadlines coming up.

Keep well,

Tom Scourfield