Ormsby Street selected to present at Finovate Spring

We’re heading off to San Jose next week, as we’ve been selected to present CreditHQ at the prestigious Finovate Spring event in San Jose.

Finovate Spring is a demo-based conference for innovative startups and established companies in the fields of banking and financial technology. Held in San Jose, California, the event offers an insight-packed glimpse into the future of money via a fast-paced, intimate, and unique format.

Finovate Spring

FinovateSpring is a conference on steroids and a great opportunity to see new technologies and upcoming companies changing the world of financial technology.  Victor Smilgys, Keypoint CU

Competition is fierce to appear at this event, with around 70 companies from the financial technology sector showcasing new products or technology over the course of two days – both on stage and on their company stands to an audience of over 1500; including investors, VCs, entrepreneurs, expert analysts and influential press.

Our CEO and co-founder, Martin Campbell, will be presenting some great new features of CreditHQ, including our new bookkeeping integration. Of the integration, Martin said:

When connected to Xero, CreditHQ, like a good financial controller, monitors every customer and every invoice the company has.  Unlike a financial controller, it has access to real-time credit scoring and payment performance information from multiple sources as well as insight into thousands of other small businesses using the product to chase invoices and recover debts.

Combining these data sources and feedback from tens of thousands of users using a patent-pending data-driven approach, the next generation Insight Engine is able to identify cash flow problems and credit risks for your business and highlight the most effective way to resolve them, and present a prioritized action plan to the business leader who can then simply approve the actions that the insight engine has planned.  

As well as highlighting actions for our own customers, our bank partners who provide the product to their SME customers, also gain insight to help them target the right products and support at small businesses customers they historically have very little data about.”

If you’re heading to Finovate, please come and say hi and let us show you how CreditHQ can help all small businesses combat the problem of late payments and focus on growth and success. For 20% off your ticket(s), use code: OrmsbyStreetCompFS16

3 key things you should monitor about your customers and competitors

Monitoring financial stabilityWe think it’s a good idea to keep a watchful eye on the people who can impact upon your business, and there are potentially a few different types of people that can have an impact on how you go about your day-to-day activities, whether that be a negative or positive impact.  These include:

  • Customers
  • Suppliers
  • Competitors

Keeping an eye on these businesses will allow you to respond should something happen that could affect the way that you operate, which could then either protect you from risk or worse, or allow you to benefit and grow.

But what should you monitor?  It’s not a definitive list, but for starters you can keep an eye on:

Their financial stability – Knowing if a company’s credit score is heading in the wrong direction would be an indicator that they’re encountering some kind of financial difficulty, such as missing payments on borrowing or being turned down for additional credit.   Changes in the frequency that a company pays its debts from paying only 10 days late to now paying 30 days late would perhaps indicate that the company doesn’t have enough funds available to pay invoices and need to wait to receive money in order to pay it out.

If they’re a customer of yours then you should do all you can to get paid as soon as possible and adjust any trading terms you have with them so that you minimise the risk of unpaid debts.  If they’re a competitor then you might be able to take advantage of their lack of available funds to invest, by investing yourself in advertising in key areas.  If they’re a supplier, then you might want to look around and see if there are alternative suppliers you can use should you no longer be able to use this one.

How to: Credit Reference Agencies consolidate a large amount of financial information, from numerous sources, in order to provide a scoring system to indicate financial stability.  They make these available from a variety of sources, such as CreditHQ.

Their mentions in the trade press – It’s always good to know what the press is saying about people you work with.  Good publicity might result in an increase in sales for them, whilst bad publicity could impact them and damage their finances (see above).  Knowing what’s being said might just give you enough of a head start to allow you to react to what’s happening before it’s too late.

How to:  It could be as simple as setting up Google Alerts for companies you want to monitor so that you can receive emails linking to online articles mentioning them, or it could be using a media monitoring service (such as Precise or Press Data) that keeps track of a variety of on and offline sources before reporting back to you.Social media sentiment

Their social media sentiment – Similar to trade press monitoring, social media monitoring will allow you to see whether the mentions that companies get on social media channels such as Twitter or Facebook are positive or negative.  Obviously, positive sentiment is good for the company mentioned, and negative is not good, but either way, you’ll be able to take appropriate action depending on which way things are going.

How to: Tools for this range from the free (Social Mention or How Sociable) through to paid services (Trackur or Brand Watch)

You’ll never know everything that’s going on, but knowing something might be just enough to avoid a financial disaster or take advantage of a golden opportunity!

It’s simple to compare the market…

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Our brains just can’t help themselves – wanting to quantify, organise and figure out where we fit into the scheme of things. Comparing how your business is doing with other businesses can help you decide what to change and how to grow.

So, where to start? Here are three areas to get you thinking…

1) You – Your business and what to measure?

Some useful measures and benchmarks to calculate for your company are:

Sales (revenue) : What were your total sales for the last year? and how have your sales changed over the last few years? Compare to the previous year, and go back as far as is relevant for your business.

Sales revenue is the most common measure of a business size, but it’s important to understand how your sales figure is made up, so find out which product lines made up most of your sales, or which price points etc.

Profit: How profitable are you?

Looking at how much money you’ve made is great, but also calculating your gross profit margin and net profit margin will give you more information.

Gross margin is the difference between revenue and cost before taking into account other operating costs (e.g. admin, marketing etc). Generally, it is calculated as the selling price of an item, less the cost of goods sold (production or acquisition costs, essentially), and usually expressed as a percentage:

Gross Margin (%) = (revenue minus cost of goods sold) / revenue

It will tell you how much profit is made directly on the goods sold.

Net profit is the profit with all the costs taken out (revenue minus total costs), including overheads and operating costs, so the actual money that you make from your sales. Net profit margin is usually expressed as a percentage, and is calculated by:

Net profit margin = Net profit / revenue

Company value: How much is your company worth?

Your Net worth figure is usually found at the bottom of your P&L / balance sheet and will give an indication of how much your business is worth financially – net worth is your assets minus your liabilities, giving a measure of how much value there is in your business.

Employees: How many people do you have and how productive and efficient are they?

Sales per employee (sales / number of employees) will give an indication of productivity and effectiveness.

Be careful when trying to assess your people with one number, as this can never measure their skills, how long they’ve been with you and staff turnover etc, so always look at other factors.

Average salary will give you a measurement of how much your spending on your workforce, which can be compared to industry averages.

Customers: How many, who are they and how do they interact with your company?

When assessing your customer base, it’s useful to consider:

Regency – when was the last time the customer interacted with your product/business? e.g. bought a product, used your service.

Frequency – how often do they interact?

Value – find a measure that represents the value of your business to the customer e.g. number of products purchased, how much money they spent in one transaction, how many features they use from your service.

Of course measuring customer happiness helps too, so how many complaints do you get each week or month.

Processes: How efficient and costly are your different processes?

If you manufacture products, then how many do you produce in a day? Or does it take ages to get a quote out to a customer? Review all your processes to see if you could do things differently.

Location: Location, location, location…

Location can be a key factor, as companies with the best location tend to have better sales than their competitors, all things being equal.

Look at the quality of environment for your workforce, how much it costs to recruit an employee to work at your office/site, distribution costs and rent and business rates.

2) Them – what are your competitors doing?

Who are your competitors? Write a list and make sure your monitor what they’re up to frequently.

Where are they located? And are they opening in new areas?

What is their pricing model?

How many employees do they have?

What technology do they use?

Have they introduced anything new lately?

Are they doing anything better than you?

Compare – benchmark and decide what do next.

Now that you’ve got all your measures calculated for your company, you can compare benchmarks relevant to your industry benchmarks, to see how you are doing.

Some useful places to look for benchmarks are:

Companies House – who hold financial information for all registered UK companies, some of this data is free; such as Net worth, assets and liabilities.

Salary checkers – what are the average salaries for your sector job titles?

Published financial data for your industry – are there any trade publications or market research that has benchmark data?

Credit scoring websites,  Office for National Statistics

Looking at household data and other businesses not necessary in your industry may help you decide whether to open in a new location, and don’t forget about looking at your cost base, as comparing different suppliers for things like accounting packages, marketing activities may make you more efficient and save you money.

So go compare!

Whilst writing this blog, here are some sites, which helped:

http://www.entrepreneur.com/encyclopedia/benchmark

http://www.marketingdonut.co.uk/marketing/market-research/benchmarking/ten-ways-to-benchmark-your-business