Running a small business, then and now

I have been trying to catch up with office work, which had fallen behind. We got our books back from the accountant a few weeks ago, and so there was a fair amount of book-keeping, as the VAT quarter looms. Having nearly caught up with that, M & I sat down and worked our way through several invoices today. They're now in the computer and I'll print them out tomorrow and send them out. We still have some more to do. If I get the work behind me, I may be more inclined to get back to the current novel.

Because of the financial crisis, I have been thinking again about when we started this business. I mentioned recently how M had run a business and how the amount we owed grew like Topsy. Then we repaid everything when he became employed. But he got itchy; he liked being his own boss, and eventually, he said he wanted to go out on his own again.

It was the start of the 1980s. I said that with two children, I didn't want him taking risks and getting us into the same position that we had been in before. He said he wouldn't. He wouldn't take on any employees; it would be just him, so there would not be the huge amount of outgoings that we had had before.

By this time, I had learned that cash flow is all important in business. If you have a vast company, no doubt, you have to have an overdraft. But if you are running a one man band, the ideal thing to do is to manage with your own money. I still remembered how the bank had contacted us and asked us to reduce our overdraft one day without warning.

The way to build up a business is to start by taking on very small jobs. You put the profit to one side and save it up. This is the way we did it. M did a number of modest jobs; he had a few contacts from his previous employment and they called him in. Before the current regulations that require certificates, etc, he could do plumbing, heating and electrical work. In the eighties, which was also a period of recession, people were more inclined to repair things than to have big new installations. For approximately two to three years, M didn't do any major jobs. That meant we did not have to fund the purchase of equipment - always costly. So no overdraft, and no large outlay. Then, he wanted to take on a large job, and by that time, we had the money. It was not a limited company, so we funded the job with the money that we had put by, and I was always the person who decided if we could afford to fund a job. Then, when the payment was eventually made, we were able to take this money out of the business again, together with profit, and so the business grew to a level that it was providing us with a good income and enough money to do what we wanted for our children and ourselves.

M also provided a maintenance contract to our business customers. They paid in advance and he called in whenever they had a problem. This was his idea, and it worked well for us. By calling in regularly, he also got to do extra jobs.

I didn't want to be tied to the house, being a secretary/bookkeeper and answerer of the telephone, but I saw that it would be good for us financially if I did. And so I made the best of it, and eventually used the flexibility of a job in my own home to squeeze in my writing.