Friday 13 July 2012

Financial Analysis and Marketing - Two Key Skills for Entrepreneurs

This is one of a series of posts on useful tools for entrepreneurs leaving the Armed Forces. Here is the full list and links.

When I left the Royal Marines in 2000 I knew I had a lot to learn about civilian life (and I still do!). Two of the subject that were particularly alien to me, coming from an armed forces background, where finance and marketing.

I was fortunate enough to have a great introduction to each of these in the 2 years after I left the Corps. First I joined JP Morgan and was sent to Wall Street for their analyst training programme, and then during my MBA at Warwick Business School, I studied marketing and strategy under the legendary Professor Peter Doyle.

Financial Analysis

Financial analysis, an understanding of the way financial information is recorded, presented and interpreted, is essential to anyone who wants to understand how an enterprise works. The single most important piece of financial analysis is probably "can I sell this product or service for more than it costs me to make or buy?" if the answer to this first question is no, then it's time to go back to the drawing board. But this is only the beginning, and I would encourage any would-be entrepreneur - especially with an Armed Forces background - to spend some time learning how bookkeeping, accounting and financial modeling work.

While I was at JP Morgan I was analysing the financial statements of a major international energy company, when I noticed a $47 million discrepancy between two sets of reports. At first I thought I had uncovered some criminal activity, so I spoke to my boss who meticulously checked though the details, and after several hours pointed out the problem - on a billion dollar balance sheet, the $47m had disappeared as a rounding error!


While the Armed Forces are a monopoly provider of services to a single client - the British Government - most businesses are competing with a wide range of capable rivals, each vying to take away customers. In any market where supply exceeds demand, an entrepreneur has to find ways of ensuring that they can sell their products or services at a premium. This is the realm of marketing.

I recommend spending time on a sales and marketing course, or at the very least reading widely on the subject. Peter Doyle's
Marketing Management and Strategy is a great top level introduction.

While Doyle puts marketing into a strategic context (he trained as an economist before becoming a marketing guru), there are also simple tactical questions that every entrepreneur should keep a close eye on, such as:

  • do I know my customer as well as possible?
  • does my product fit my market as closely as possible?
  • what can I measure to improve the performance of my marketing activities?
For me marketing remains the most interesting of the disciplines involved in entrepreneurship - and also the most challenging!

This is one of a series of posts on useful tools for entrepreneurs leaving the Armed Forces. Here is the full list and links.

Sunday 8 July 2012

The Royal Marines Toolkit - Determination and Adaptability

This is one of a series of posts on useful tools for entrepreneurs leaving the Armed Forces. Here is the full list and links.

The Royal Marines often have to travel light and deal with a wide variety of challenges, so they have developed a toolkit which combines simplicity with effectiveness in almost any circumstance. The toolkit contains two items: a hammer and a roll of duct tape.

There aren't many problems that you cannot solve - or at least deal with for the time being - with a hammer and/or duct tape - which is known in the Royal Marines as "Maskers" or "Harry Black".

These tools have metaphorical importance too of course - the hammer is a symbol of determination, while the maskers stands for improvisation and adaptability. Time spent in the Armed Forces gives plenty of opportunity to develop these two characteristics, and my message to every serviceman and woman considering leaving the Forces is to remember that they have these tools in their pockets long after they take off their uniform.

One word of warning though - as Abraham Maslow, the father of modern management pointed out, "If the only tool you have is a hammer, every problem begins to resemble a nail." While determination and adaptability are the most important tools in the entrepreneurial toolkit, they should be the only ones...

This is one of a series of posts on useful tools for entrepreneurs leaving the Armed Forces. Here is the full list and links.

Friday 6 July 2012

Nine Tools for Entrepreneurs

On Tuesday I was asked to join speak on "Inspiring Entrepreneurs: From Battlefield to Business" at the British Library.

Following a keynote speech from Clare Perry, the MP for Devizes Matthew Rock from Real Business, who chaired the event, introduced me, Peter Fitchett of Absolute Rubbish, Sarah-Jane Hill of Bish Bosh Becca and Mark Palmer of Green & Black's.

You can see the full webcast of the event here. My presentation starts at 17:17.

I shared nine tools that I believe can help service leavers in their journey from the Forces to Entrepreneurship. The nine tools are:
  1. Determination
  2. Adaptability
  3. Financial Analysis
  4. Marketing
  5. Timing
  6. Capital
  7. LinkedIn
  8. Coffee
  9. Crowds
I'll explore each of these tools in more detail in following posts.

After the presentation we faced questions from the audience and also via twitter from the online viewers. I asked what tools other people would recommend and "Mentor" was a frequent suggestion - what additional tools would you suggest?