Whether you’re starting a business or planning to expand, having a business plan can help to get you on track and get some detail behind your ideas.

However, research frequently shows that most businesses lack one: A 2025 Grow London Local survey of more than 800 entrepreneurs found that more than half (54%) of early-stage London business owners are operating without a business plan. It added that 59% of small business employers nationwide lack one.

There are a number of useful tools worth having at your disposal if you want your business to succeed. While one of those is accounting software, so you can keep track of your business admin (forecast your cash flow, manage your invoices, and more), another is a business plan.

So what are the advantages of business planning and how could it help your business to succeed? Read this article to find out more.

Here’s what we cover:

What is a business plan?

There are numerous reasons why you might want to start a business.

You might have a great idea. Perhaps you’ve always wanted to run your own company. Or maybe you’ve been made redundant and you’re ready to take the leap to entrepreneurship.

But for your business to be a success, your passion, enthusiasm, hard work and skills should be built on a practical framework. And that’s the case whether it’s a new business or an existing one.

This is where your business plan comes in.

A key part of that practical framework, a business plan is a document that maps out the purpose of your company, what it does and its strategic goals, among other things.

Creating a business plan for your company will guide you in defining your unique selling proposition (USP), and give you clarity of the marketplace you wish to operate in and the competition your business will be up against.

You’ll use your business plan to work towards a series of milestones that will help you to grow your company.

But your business plan shouldn’t be a static document. You should update it regularly as your company evolves, so you can ensure things are moving in the right direction.

Benefits of writing a business plan

Jennifer O’Toole, director at accountancy firm Thomas R Dixon, says, “A business plan is like a flight path. It lets you know where you want to go, what you want to achieve, what you have in order to achieve your goals and probably most importantly what problems you can expect along the way.

“Being able to identify potential threats, problem areas that could affect the business, and to be able to develop coping strategies in a proactive manner rather than in a reactive stance, is key to business survival.”

It’s also a great way to share information about your business, to develop your thinking and test scenarios before you make any changes (like leaving your job and going it alone), and it gives you a way to measure how things go when you do start up.

And if you’re looking for finance, then a business plan can make a difference.

Rebecca McNeil previously worked as the chief operating officer at Barclays. She’s now a partner at Manchester Square Partners.

She says, “A strong plan can help applications for finance from a business loan to alternative forms of finance and investment.”

Reasons people skip business planning

If it’s so helpful, why don’t more people choose to have one? Here are some of the common challenges:

• Time. If you’ve thought through your business, it shouldn’t take long to create your business plan. Keep it short and simple and choose a format that works for you.
• Uncertainty. It’s true that you can’t know what will happen until you start a business but a plan can help you spot potential pitfalls and helps you to understand the finances behind your idea.
• Lack of agility. Some people think business planning stops businesses evolving, but a good business plan should be current and adapt as you test and learn. It needs to be part of the business, not left in a drawer.

The best format for your business plan

Many people assume that a business plan will be a hefty document containing lots of facts and figures, but it doesn’t have to be. The key thing is to choose a format that will work for you and your business. That would be:

• One you’ll use. Something that can become part of your day-to-day business rather than something you’ll never refer to. Have your business plan on the wall as a manifesto or mind map, make a presentation or create a visual guide – whatever works for you.
• One that makes it simple to express your views. If you’re a writer, you may be happy with a document, a designer might like a more visual medium. Your business plan should excite and inspire, so pick a format that lets you do that.
• One that’s shareable. A business plan will be seen by lots of people, from your bank manager and accountant to prospective investors or employees, so pick a format that makes it easy to share.

What to include in your business plan

What should a business plan include? Every plan is likely to be different but there are some common pieces of information that are often included:

• An overview of the business. What does it do and what makes it different?
• Goals. What does the business want to achieve? This should set some SMART (specific, measurable, achievable, relevant and time-bound) objectives that will quickly show if the business is succeeding.
• Your audience and the market. Who will your business supply and how will it reach them? How big is the market and who are your key competitors?
• Products and pricing. What will you be selling and how will your prices be set? How does this compare with your competitors?
• Who is involved. Many investors say they invest as much in the people as they do in the business. Share some information about people’s roles, experience and passions.
• Financials. Provide details about sales, costs, break-even points and where investment will come from. If you’re looking for people to invest, you should include information about likely returns. If you’re looking for ways to finance your business, crowdfunding, alternative finance and government funding are a good place to start. The British Business Bank is a great place to start, too—it offers loans with free mentoring included.

Some business plans will include other sections, like a SWOT (strengths, weaknesses, opportunities, threats) analysis or a full marketing plan.

You might find these useful for your business, so feel free to include them too if you wish.

How to use your business plan

Many business owners invest time in producing a business plan and then never look at it again.

While it’s valuable to get your ideas clarified and to test your thinking before you launch your business, it’s even better if it’s embedded into your day-to-day business too.

As Jennifer says, “Business planning is a continuous process—from the initial start up of any business to stage two of developing and growth of existing sales and developing new income streams.

“As established businesses mature and diversify, business planning continues to play a fundamental role in ensuring that the company’s long-term strategies are being met.”

Here are some ways your business plan can work for you:

• Take the sales, cash flow and expense predictions and measure them against your actual figures to improve budgeting and spend management. This helps you spot whether you’re on track and if things need to be revised.
• Revisit your goals every month to see how you’re progressing.
• Keep updating it to include customer input and quotes. Real feedback is essential for keeping a business on track.
• Revisit it once a year to see if changes to the market, technology or competition has had an impact. Businesses need to continue to evolve to survive in the longer term.

Final thoughts: Where to get help with your business plan

Sometimes you’ll need additional information to pull together your plan. You could:

• Speak to your accountant. They don’t just help you with financials or accounting software, they can also offer advice about planning your business.
• Talk to your bank. Many have small business experts who can help.
• Use business planning templates. Our free, easy-to-follow Word template will help to make the process easier.
• Use AI to talk through your ideas, and ask it to challenge you on specifics of the business plan.

Editor’s note: This article was first published in October 2017 and has been updated for relevance.

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When running a business, it’s essential to have enough cash to cover your working capital—paying suppliers, employees, and tax—as well as to invest in equipment and fund your growth.

There are many ways to borrow money, and more options today than there have ever been. Borrowing is also more expensive than it was even five years ago, so it pays to understand each route and weigh up the full cost before you commit.

We cover most options in this article, but please note that none of what we discuss comes with any kind of recommendation or endorsement. It’s down to you to undertake due diligence and choose what’s best for your situation.

Here’s what we discuss in this article:

Bank business loans

This is often the first option you’ll think of, and it remains a popular one.

All the banks say they’re open for business, but in practice some doors are more open than others—and the choice now includes app-based challenger banks as well as the high street.

Many lenders will ask for a business plan, and for small and medium-sized businesses much of the decision can still come down to the director’s personal credit profile.

Tips

• Check the likelihood of getting a loan with your bank in advance, so you don’t rack up too many credit checks on your record.
• Create a robust business plan to show you can repay the loan—and to work out how much you actually need.
• Calculate the full cost: not just the interest rate, but arrangement fees, early-repayment penalties, and whether the rate is fixed or variable.
• Approach a few lenders to compare. With a strong credit profile, you may get them to compete for your business.
• If you have to give security, such as a personal guarantee, make sure you understand what it commits you to.

The British Business Bank

If you’ve already researched this topic, you may have noticed several government-backed options, and most of them sit under one roof: the British Business Bank.

This is the UK government’s economic development bank, set up to improve access to finance for smaller businesses.

It’s the body behind many of the schemes we discuss later in this article, such as Start Up Loans and the Growth Guarantee Scheme.

It doesn’t lend to you directly. Instead, it works through accredited lenders and delivery partners, and widens the range of funding on offer.

If you’re not sure where to begin, its Finance Hub is a useful, impartial starting point: it sets out the main finance options and helps you find lenders and schemes you may be eligible for.

Government-backed schemes

If you don’t have the security a commercial loan needs, a government-backed scheme may help you get finance.

You might hear people talk of the Enterprise Finance Guarantee but that has closed to new lending. Its current equivalent is the Growth Guarantee Scheme, the successor to the Recovery Loan Scheme, which launched in July 2024. It’s administered by the British Business Bank.

It supports a range of products—term loans, overdrafts, asset finance, and invoice finance—with the government providing the lender with a 70% guarantee. Crucially, you remain fully liable for repaying the debt. Facilities run up to £2m, it’s open to UK businesses, and you apply through one of the scheme’s accredited lenders rather than the government directly.

If you’re just starting out, the Start Up Loans scheme is worth a look, also from the British Business Bank. It offers personal loans of £500 to £25,000 per founder, comes with free mentoring, and assesses your application on your business plan and cash flow forecast rather than your trading history.

Tips

• Ask lenders whether a government-backed scheme could support your application—not all of them lead with it.
• Remember the guarantee protects the lender, not you: you’re still responsible for the full amount.
• As with any loan, check the rate, fees and term, and compare accredited lenders.

Friends and family

Many businesses get going with funding from friends or family.

It can be quick to arrange and may come at an attractive rate. But think carefully before borrowing this way—all too often these arrangements turn sour and damage the relationship if things don’t go to plan.

If family or friends put money into your business by buying newly issued shares, they may be able to claim tax relief through the Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS).

These schemes provide 50% and 30% income tax relief respectively, plus capital gains tax breaks, as long as the company and the investment qualify.

There’s a catch with family, though: your closest relatives—a spouse or civil partner, parents, grandparents, children or grandchildren—generally can’t claim the relief if they’re “connected” to the company, while siblings and more distant family usually can.

The capital gains (CGT) side has also become noticeably less generous of late. The rules here are detailed and change often, so it’s worth checking the current position with an accountant before relying on any of it.

Tips

• Put a simple written agreement in place covering the amount, term, interest rate and repayments.
• Agree what happens if the business fails—will you repay the money personally?
• Keep them up to date on how the business is doing, the good and the bad.

Invoice finance

If you invoice customers and then wait to be paid, invoice finance lets you borrow against those unpaid invoices.

You may see it called factoring or invoice discounting. It can be arranged fairly quickly, providers have made the process increasingly slick, and more sectors are eligible than used to be the case.

Tips

• Check how long you’re tied in for; some providers offer one-month rolling contracts.
• Make sure you understand the full cost.
• Check how much you can actually borrow—you won’t be advanced 100% of your debtor book.
• Compare providers.

Overdrafts

A business overdraft is a flexible, straightforward way to cover short-term shortfalls—but used over the long term it can become expensive.

Banks have also grown far more cautious about offering them than they once were.

An overdraft is often set as a percentage of your turnover, and it can be reduced or withdrawn, so make sure you understand the terms. If you need flexible borrowing, it’s worth comparing an overdraft with a revolving credit facility or a short-term loan.

Tips

• For long-term needs, compare your overdraft with cheaper options, such as moving the balance onto a loan.
• Try to stay within your limit—charges for exceeding it can be steep.
• Have a back-up plan in case the facility is reduced or withdrawn.

Credit cards

A business credit card can give you interest-free funding if you clear the balance in full when your monthly statement arrives.

Many business cards require you to pay in full each month, so check whether yours does before you rely on it for anything longer term.

Tips

• Shop around for 0% deals, cashback and other incentives.
• Pay on time, and at least the minimum required, to protect your credit score.
• Review your cards regularly to make sure they still suit you.
• If you issue cards to staff, put a robust process in place to prevent misuse.

Online lending marketplaces

When this article was originally published back in 2013, platforms such as Funding Circle matched businesses with lots of individual lenders, who each decided whether to fund your loan.

Sadly, that peer-to-peer model has largely disappeared in the UK. Funding Circle closed to individual investors in 2022, and others, including Zopa and RateSetter, exited too.

The good news: What remains is a healthy market of online business lenders (Funding Circle among them) now funded by institutions rather than individuals.

The appeal is much the same as before: applications are quick, decisions often come within a couple of days, and these lenders will sometimes back businesses the high-street banks turn down. The rates may not be the cheapest but if you have excellent credit, the process is straightforward.

Tips

• Present your business well—show your growth potential and how you’ll repay. Being honest matters.
• Check each lender’s eligibility criteria before applying; they vary, and have changed over the years.
• If the interest rate or arrangement fee turns out too high once you’re quoted, you’re free to decline.

Grants

Various government and non-government organisations regularly offer pots of money to encourage business activity.

See our guide to government grants for small businesses.

Schemes come and go quickly and it’s hard to keep track, so it’s worth asking your accountant, bank or local business support service to flag any you might be eligible for. Training and apprenticeship support are common examples.

The best starting point is the government’s Find a Grant service, which lists current national schemes.

Be cautious when applying, though: grant scams do exist, especially those you might find advertised randomly through social media or even in search results. Always check a scheme is legitimate before you hand over any details.

Local and regional funding

The original version of this article pointed to Local Enterprise Partnerships (LEPs) as a source of regional funding, and you might still hear people talk about them.

Alas, LEPs closed in April 2024, and their work passed to combined authorities, local and county councils (and in London, the Greater London Authority).

The funding hasn’t disappeared. It’s just channelled through these local bodies and the Growth Hub network, which can point you to regional grants, loans and business support.

The government’s business finance and support finder is a good way to see what’s available in your area.

If you have growth plans but are struggling to raise money through conventional routes, your local or combined authority is the place to start.

Tips

• Approach your local or combined authority, or your nearest Growth Hub, to see what schemes are available where you are.
• Have a business plan and a solid proposition ready for any application.
• Make sure you understand the terms fully before you sign.

Equity

Many business owners are nervous about giving away a share of their business.

But equity funding can be a very cost-effective way to fund the early stages, or to take an established business to the next level—through angel investors, venture capital or equity crowdfunding, for example.

This article focuses on borrowing, so we won’t go into detail here, but equity is a valid option well worth considering when you’re weighing up how to finance your business.

Newer options worth knowing about

The borrowing landscape has broadened well beyond the traditional routes. Depending on your business, these may be worth exploring:

• Online and alternative lenders. Fintech lenders such as Funding Circle and iwoca often lend to businesses the high-street banks turn down, and tend to make decisions faster.
• Revenue-based finance and merchant cash advances. Repayments flex with your income—for example, a share of your daily card takings—which can suit businesses with seasonal or variable sales.
• Crowdfunding. Raise smaller amounts from many backers, either in exchange for equity (platforms such as Crowdcube and Republic Europe, formerly Seedrs) or for rewards and pre-orders (Kickstarter).
• Asset finance. Spread the cost of equipment, vehicles or machinery through leasing or hire purchase instead of paying for it all upfront.

Final thoughts

Many businesses end up funded by a mix of the options we’ve outlined here.

As your business grows, review your borrowing regularly—routes that aren’t right at the start can become more attractive, and cheaper, once you’ve built a track record.

Whatever you choose, weigh up the full cost rather than just the headline rate before you commit.

This blog was originally published in August 2013 and has been updated several times since for relevance.

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Customers are the lifeblood of any business, so it’s vital you can keep generating leads and retaining your existing customers.

But doing so is often a concern for businesses, with more than one in three companies saying that generating new business is their biggest worry.

We spoke to two small business owners and asked them to share their experiences of growing their customer base.

Here’s what we cover:

1. Get to know your prospects and customers

There’s a lot of talk about personalisation and customer insight. That’s because it works.

Understanding your customers’ needs can lead to better insights into your audience and allows you to develop services that are matched to your clients’ needs.

It can also help you stand out from your competitors, something that Alice Boden understands. She’s managing director of Teeny Greeny, which supplies organic microgreen grow kits—although when she spoke to Sage Advice for this article she was managing director of Bodice of Holt, which offered a home delivery service for fruit and vegetables.

She said: “We know our customers really well and know their preferences so we can tell them when certain things are coming—when they’re in season and in stock. Our service is completely personalised to their needs.

“This is where we have an advantage over bigger suppliers. I have a good relationship with our customers and I know the business. Because I source the produce and pack the boxes, I know exactly what’s happening and can provide a fully personalised service.”

And it’s not just consumers who like this approach. It also works for business clients too.

Mike Cockburn, director at Sogno, a positive psychology coaching company, said, “It’s important that we understand what our clients are trying to achieve: their mission, their goals. Then we look at how we can accelerate that and customise our services to meet their needs. It leads to a more balanced relationship.”

2. Divide your time: support existing clients and look for new work

In simple terms, there are two ways to get more business—win new business or get your existing customers to spend more. It’s important to ensure you don’t focus on one at the expense of the other, as both are important for growing your customer base.

Mike said, “We do have a lot of repeat business and feel we offer the most value with long-term clients. But you need to keep bringing in new business too. Old business can falter if budgets change or people move on, so it’s important to look for new opportunities. You need to start a relationship early, so that it’s mature enough to deliver new business when your other work is completed.”

3. Offer great customer service

To keep your existing customers coming back, it’s important you offer great customer service. In fact, research shows that 78% of people have walked away from a sale as a result of poor customer service.

But if you get it right, it has a positive impact on your customer base and your bottom line. Loyal customers are worth up to ten times the amount they originally spend.

Take the time out to evaluate your customer service, make sure you respond to your customers quickly and keep an eye on social media so you can offer great service online too. Your customer numbers should grow as a result.

4. Make the most of your networks

Ask a business owner where their customers come from and most will tell you that word of mouth is their main source.

Recommendations from others are valuable: “It’s the idea of social capital – the value of relationships,” said Mike. “If I know people that they know, then there’s an implied trust.”

Most of his clients come from networking, something he’s passionate about.

“I think people sometimes equate networking with sales and prospects can be sensitive to a sales approach. But if you recognise that only so many contacts will go on to be clients, then it reduces the pressure. The work we do is based on trust and openness so the way we make contact is a good opportunity to demonstrate that. I meet up with loads of people and if I can help, they remember that. That can open new doors.”

Alice agreed. “Networking is really useful. It’s not just about selling, it’s about what you can do for people.”

5. Look for partnerships with other businesses

Your ideal customer will already have relationships with other businesses and this offers a great opportunity.

By partnering with other firms which offer complementary services, you can not only reach a new audience but also potentially offer more to your customers.

It’s something that Bodice of Holt were looking into when Sage Advice spoke to Alice when this article was originally published: “There’s a body development firm in Bath, which offers personal training and nutrition advice. Part of their service is to help their customers to understand what they should be eating when they’re training, which includes fruit and vegetables. They are recommending us to their clients – and we’re looking at delivering directly to the gym once a week.

“It’s about looking around and keeping your eyes peeled for opportunities. Be open to new ideas and speak to people to see if they’re interested.”

Social media has revolutionised the way customers and businesses can share information and have conversations.

From online customer service to using social media to get insights into your audience, there are now excellent opportunities for businesses to reach out via Facebook, Twitter, LinkedIn and other networks. Which ones work for you will depend on your business, your audience and the way you like to communicate.

7. Think big

If you’re a small business, can you work with a big company? The simple answer is yes.

But many small companies find it intimidating to make contact. Mike has had a range of big clients, from Greggs to Kia, and said it’s worthwhile approaching large corporates.

“Our success with clients goes back to developing a network of long-term connections. But small businesses now have more opportunities to work with big clients. I think that’s changed since the credit crunch. Big corporates may have been suspicious of smaller businesses in the past but they now recognise that they offer value and have lower costs too. There is less prejudice now.”

8. Play to your strengths

It’s definitely worth testing a range of marketing approaches and seeing what works. But remember that every business is different, so you may find that some approaches don’t work. Don’t be afraid to drop these.

9. Adapt as your business grows

It’s important to keep trying new ways of reaching your audience and don’t automatically reject things that might not have worked in the past.

As your company becomes established, you may find your customers come from different sources. This is why it’s important to keep track of business analytics and your financials.

“We get new customers from a wider mixture of places as the business has grown,” said Alice. “We’ve been going for about two years and at the start, it was through friends and family. Now we get people through word of mouth, advertising and from attending markets. We also get people through Google and the website.”

10. Measure what works for you

As you try out new approaches, be sure to monitor where your customers come from and which sources offer the most value.

You can then keep refining your approach or scale up activities that work to grow your customer base further.

This article was first published in October 2017 has been updated for relevance.

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Growth is a tricky business. Companies must continuously strive to identify new growth opportunities to achieve long-term business success.

That’s why it is essential for your business to develop fresh insights that will ultimately help to generate ideas that the competition has failed to see.

This fascinating subject is what we cover in this article, as follows:

Ideas are the lifeblood of business

Ideas range from big and audacious to small and modest, and they’re the lifeblood of a business, so none should be dismissed out of hand.

Sometimes a small change of angle is all it takes to turn an idea into a viable proposition.

Investing in a robust process for the “front end of innovation”—the early work of generating and shaping ideas—improves both the quality and quantity of the ideas you produce, and keeps everyone involved engaged.

So how do you turn those ambitious ideas into real growth opportunities?

Start with market research

The first step is to draw up a shortlist of competitors, and market research is invaluable here.

The more you learn about your competitors—what they sell, where, and to whom—the clearer your picture of whether you’re competing in the same space, or missing growth opportunities they haven’t spotted either.

Modern research goes well beyond a spreadsheet of rivals: digital tools, customer reviews, social listening, and search data all help reveal what people actually want and where the gaps are. (More on putting AI and data to work below.)

Four growth strategies: the Ansoff Matrix

Once you understand your market, it helps to think about growth systematically.

One of the most enduring tools for this is the Ansoff Matrix, developed by Igor Ansoff in 1957.

It maps four growth strategies against two variables—your products and your markets, each either existing or new—ranging from lower to higher risk. (Don’t forget to work out how you’ll manage that growth, too.)

Market penetration: existing products, existing markets

Increasing market penetration is probably the least risky growth approach—though risk is always relative.

It’s considered lower risk because you’re dealing with known factors: your existing products and your existing markets.

The watch-out is complacency. If you’re blind to changes around you, such as new products and services from competitors, you can miss your customers’ changing needs and end up losing ground.

Market development: existing products, new markets

Market development means selling your existing products into new markets.

It carries more risk than market penetration, because expanding into a new market can involve investment with no guarantee of a profitable return.

But because you’re using existing products, there are no product development costs, which helps to keep the risk in check.

Product development: new products, existing markets

Sometimes called product or service innovation, this means introducing something new to the customers you already have.

It takes investment of time and money, and you may need to train staff so customers get the best advice on the new product. The key is in-depth knowledge of who your customers are and what they need—focusing on existing customers lets you learn what offering will land best.

And not every new product or service demands significant capital investment.

Diversification: new products, new markets

Diversification is generally seen as the riskiest strategy: new products and new markets at once, so you have no experience of either the product or the customers likely to buy it.

The upside is first-mover advantage—if no one has met this need before, you can establish yourself as the leader well ahead of the competition, which usually lets you charge a premium.

Make AI and data part of your process

Whichever strategy you choose, base your decisions on solid data rather than gut feel. It markedly improves your chances of success.

What has changed since this article was first published, back in 2018, is how much data is now within reach of even small businesses, and how much of the analysis can be automated.

AI tools, in particular, can take on a lot of the heavy lifting at the front end of innovation:

• Market and competitor research: summarising reports, tracking competitors and pulling together a market picture far faster than doing it by hand.
• Customer insight: analysing reviews, support tickets, surveys and social media to surface the unmet needs and recurring problems that point to opportunities.
• Idea generation and testing: acting as a sounding board to expand, refine and pressure-test ideas before you commit resources to them.
• Forecasting: modelling demand, pricing and cash flow scenarios so you can compare your options with more confidence.

There are two cautions, though.

First, AI works best alongside real conversations with customers, not instead of them—the tools surface patterns, but judgement and direct contact still decide what’s worth pursuing.

Second, your insight is only as good as your data, so it’s worth getting your underlying numbers—sales, costs, customer information—clean and in one place.

Good accounting and business software makes that far easier, and increasingly comes with built-in analytics and AI features of its own.

Build the right team

Even the best growth strategy needs the right people behind it. As you grow, you may need to recruit to handle the extra demands. But don’t just fill the skills gap. Look for people who will thrive in your culture and add to it, not only those who tick the technical boxes.

Hiring has changed in recent years. Many roles are now hybrid or remote, which widens your talent pool well beyond your local area, but also means thinking harder about how culture, communication and collaboration work across a distributed team.

Skills shortages in several sectors have made the strongest candidates harder to find and keep, so it pays to be clear about what makes your business a good place to work.

But recruitment is only half the picture.

Put people-management practices in place to retain both new and existing staff, so you grow together as a team rather than churning through hires. And don’t overlook the talent you already have: with the current pace of change—AI included—upskilling and developing your existing team is often quicker and cheaper than hiring from scratch, and it helps people feel invested in where the business is heading.

Keep an eye on your finances

If you’ve got plans on the table to chase new opportunities, keep a close eye on your finances. As we’ve covered, you may need extra funding to pay for the new products or services you’re taking to a new market.

Make sure your finances are in good shape and stay on top of your cash flow. Keeping everything ticking along smoothly frees the business to focus on its goals for growth.

And remember: whether you’re going for superfast growth or a slower, steadier path, the same thinking and planning still applies.

The combination of sharp insight, sound data, the right team and healthy finances is what turns an ambitious idea into sustainable growth.

Final thoughts

Growth doesn’t have to mean taking big risks or reinventing your business overnight.

Often the strongest opportunities come from looking more closely at what you already have—your existing customers, your products, your data—and asking where the gaps are.

The Ansoff Matrix gives you a framework for thinking about that systematically, and AI now makes it far easier to do the research and analysis that used to take weeks. Of course you can combine the two together easily by asking AI to apply the Matrix to your business.

Whatever direction you choose, the fundamentals stay the same: understand your market, back your decisions with data, invest in the right people, and keep your finances in good shape.

The businesses that grow sustainably aren’t necessarily the boldest. They’re the ones that plan well, act decisively, and keep adjusting as they learn.

This article was first published in January 2018 and has been updated for relevance.

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Want to start a business? You’re not alone. Around 832,000 new companies were set up in the UK in 2025, according to the NatWest and Beauhurst New Startup Index—part of a wave of activity that has pushed the total number of active companies to a record 5.66 million.

If you want to join their numbers, you’ve come to the right place.

Here’s what we cover in this article:

Starting steps

Planning for a new business is one of the most important stages if you want to succeed–especially with rising costs and a competitive market to navigate.

But don’t procrastinate.

Take your business idea to market, test it and iterate it if necessary, as that’s a great way to see if people are interested in what you are selling to them.

So, whether you’re starting your business because of a personal passion, a gap in the market or simply because you want to work for yourself, get ready to take the first steps towards making it a reality—read on for some useful advice as you begin your exciting journey of starting and running your own business.

The basics of starting a new business

Before you dive in, it’s worth getting your ducks in a row first. By doing that, you will give your business a fighting chance of succeeding.

When starting a new business, you’ll need to register with HMRC. Most companies set up as a sole trader, partnership, or limited company.

Choose a name for your business, but check with Companies House and on Google to see if it’s not already in use. If you use a name that’s the same as another business, you could get in trouble over trademark issues, or for “passing off”—a situation where it can be implied (even if it’s unintentional) that you’re attempting to benefit from another business’ reputation.

Once you’ve got a name, it’s not a bad idea to buy the website domain name for your company, and to register accounts on social media. Even better, this is another way in which you’ll typically discover if there’s another entity with the same or a similar name.

You’ll need to put a system in place so you can manage your cash flow, costs, and tax payments once you start trading. Using accounting software can help your business stay in check and keep you on top of your finances. Unsurprisingly, Sage has everything you could ever need, including Sole Trader Free—which as its name suggests, costs nothing!

It’s also worth finding an accountant, who will help you stay on top of your tax requirements and other financial elements. Accountants also hand out business advice, which can be a game changer. After all, they spend all day talking to business owners. They’ve seen it all, and are always happy to share because your success is ultimately their success, too. (Tip: Take a look at the Sage Accountant and Bookkeeper Directory.)

If raising finance is a requirement for your business—or even if it isn’t—you’ll need to create a business plan. This living document will help you with your planning and keep your business focused as you work to build it. More on that below.

Legalities you need to know about starting a business

If you set up as a limited company, there’s now an extra step to be aware of.

Since 18 November 2025, all company directors and people with significant control must verify their identity with Companies House under the Economic Crime and Corporate Transparency Act. For a brand-new company, you’ll complete this as part of incorporation, so it’s worth factoring in before you file.

Another thing to bear in mind is that, these days, software isn’t just a convenience.

For many businesses it’s a legal requirement.

Under Making Tax Digital (MTD), VAT-registered businesses already keep digital records using MTD-ready software, and file their returns using the software.

Since April 2026, the same approach has applied to income tax for self-employed people and landlords with qualifying income over £50,000, dropping to £30,000 from April 2027 (and £20,000 in April 2028).

In practice, that means submitting quarterly updates through MTD-compatible software, and then submitting a digital tax return using the software—rather than facing a once-a-year scramble with spreadsheets. So, it pays to choose the right tool from day one.

It’s worth keeping an eye on your turnover: once it exceeds the VAT registration threshold (£90,000 as of 2026), you’ll need to register for VAT within 30 days. This is definitely something to discuss with an accountant if you’re getting anywhere near that level, because the timing can be problematic. You could be left out of pocket if you’re not charging VAT on your invoices.

Expert advice on planning a business

Working with experts when planning a business can help you to get off on the right footing.

As previously highlighted, an accountant can assist you with your tax affairs and a bookkeeper can help you manage your books, leaving you to focus on building and growing your business.

When deciding on the right legal structure for your business, it’s worth seeking advice from a solicitor or an accountant.

For some businesses, this might be a straightforward option.

However, if you have plans to trade in numerous countries, you will have international tax and legal issues to consider, making things more complex. Don’t rush into making a decision. Do your research, seek advice, then put your plans into play.

Expert advice can also come in the form of getting help when it comes to creating important documents such as a business plan—see below for more details on why having one can really help your business.

How do you find a winning business idea?

Finding the perfect idea can be a tricky affair.

For some people, it can be as simple as turning a passion, hobby or skill set—such as fitness, baking or social media management—into a business idea. Some people might be trained by their employer and realise they can take those skills into a new business.

For others, though, the desire might be there to create a business but pinning down an idea is a bit harder.

One way to come up with a business idea is to study growing trends.

Assess current business trends, read industry-specific research, talk to friends and family, see what’s happening in the news, and speak to people working in the industry you want to start up in.

AI chatbots can speed up that research too—helping you summarise market reports, test ideas and spot gaps—though they work best alongside real conversations with potential customers, not instead of them.

For your business to flourish, you’ll need to come up with an idea that solves a problem, has a unique selling point and is something people are willing to pay for. Without that, your company won’t last very long. And remember, a great business idea isn’t enough to succeed—you need to back it up with planning, application, dedication, and hard work.

How to write a great business plan

If you want to give your business a fighting chance of succeeding, it helps to have a business plan in place.

By creating a business plan, you will have a practical framework that will guide your hard work, enthusiasm and skills, and keep you focused.

You will use the document to map out your company’s strategic goals, strengths and weaknesses, purpose, and unique selling point. It will also help you to achieve clarity on the market you want to sell to and the companies you will be competing against.

By using your business plan to create milestones for your company, you can set targets that will keep you moving in your bid to build and grow your firm.

Another tool that can assist you is a Business Model Canvas—a one-page business plan that can help your company simplify its planning in a way that is highly visual.

For step-by-step guidance, read our guide to creating business plans and develop a document that will help you to stay on top of things.

Starting different business types

Want to create a business but need advice that’s tailored to your target market? We’ve created a series of industry-specific articles that will help and save you time.

Food and drink businesses

Got designs on opening a restaurant, running a coffee shop, starting a food truck or selling your products in a supermarket? The food and drink industry is a competitive one, so having your planning in place will help.

Here are just some of the articles we have on Sage Advice that can help:

Online and ecommerce businesses

Planning on selling goods online? It’s tempting to dive right in, as you don’t have to worry about purchasing commercial real estate—but you still have to consider how you’ll deliver your products and services to your customers. Then you must determine how you’ll be selling your goods, how you’ll market your business and what your online shopfront will look like—i.e. your website.

Here aresome articles we have here at Sage Advice that you can take a look at:

Shops and retail businesses

Do you have ambitions of owning your own shop—a proper bricks-and-mortar option? Owning a physical space to sell your goods will have its challenges, notably property purchase or rental costs and finding the right location, among other things, so it’s in your best interest to be prepared.

Here’s some of our articles that can point you in the right direction:

Professional services businesses

So, you’ve worked for a design agency for years and you’re ready to go it alone? Perhaps you want to open your own cleaning business or maybe you want to run your own consulting firm. No matter what type of professional services company you want to run, here’s some advice:

Final thoughts: Ready to start a business?

There are lots of steps to take when starting your business, but by taking your time and putting the right planning in place, you will make things easier.

Remember, take advantage of expert advice when you need it, and think about how you can meet the needs of your customers and clients with your products and services.

And don’t forget about your finances – make sure you keep on top of your cash flow if you want your business to succeed.

This article was first published in April 2018, and has been updated several times since for relevance.

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Finance teams can take nearly three months per year to close the books—time that you could better spend on strategic decision-making.

AP automation eliminates manual workloads, optimises cash flow, and minimises financial risk, allowing you to focus on what truly matters: driving business growth.

By automating the financial close, our Close the Books research says businesses can free up to 3x more time, saving an average of 24 working days per year whilst improving accuracy and efficiency.

AI-powered automation can work so your invoices flow seamlessly from capture to payment, giving you real-time visibility, fewer mistakes, and faster decision-making.

Perhaps most importantly, you can shift work to higher-value tasks and what truly matters, such as driving growth.

Here’s what we’ll cover:

What is AP automation?

Accounts Payable (AP) manages outgoing payments to vendors and suppliers you work with, so invoices are processed, verified, and paid on time.

Adopting AP best practice lets you:

• Optimise cash flow—control when and how payments are made.
• Strengthen vendor relationships—timely payments build trust and can lead to better terms.
• Ensure compliance—accurate record-keeping supports audits and financial regulations.

AP automation makes all this more manageable

AI-powered accounts payable automation software can digitise and optimise the AP process, automating invoice capture, approval workflows, and payment processing.

It cuts out mistakes whilst saving time, letting you focus on business-critical initiatives instead of repetitive tasks.

Consider AP automation not as a basic financial tactical improvement but as a strategic move that can align with your business goals of driving growth and efficiency.Whether you are part of a small start-up or mid-sized business, automating the accounts payable process can undoubtedly improve your financial management.

The challenges of manual accounts payable processes

Your business may struggle daily with problems regarding manual AP workflows.

Common challenges include:

Time-consuming processes

Manual data entry and invoice matching slow your financial management and create bottlenecks.

High error rates

Duplicate payments, missed invoices, and human mistakes lead to financial losses.

Lack of visibility

Tracking invoice statuses manually makes cash flow management and budgeting difficult.

Scaling issues

As your business grows, you know that handling increasing invoice volumes manually becomes unsustainable.

Supplier relationship risks

Delayed payments strain vendor relationships and affect supply chain reliability.

The benefits of AP automation

Switching to automated accounts payable systems delivers significant efficiency gains, cost savings, and accuracy improvements.

Here’s seven areas that AP automation can transform, making your finance operations more efficient:

1. Time savings

According to our research, automating financial close processes can save up to 24 working days per year.

For finance teams burdened by manual AP workflows, automation eliminates tedious tasks like data entry and invoice approvals—freeing up valuable time for strategic decision-making.

Automating data entry, invoice matching, and approvals can reduce this workload by 50%, freeing up hundreds of hours annually for strategic tasks.

2. Cost reduction

AP automation could lower your operational costs by:

• Cutting labour expenses and reducing reliance on manual processing.
• Eliminating late fees and duplicate payments that drain cash flow.
• Reducing paper-based costs, saving on printing, storage, and postage expenses.

3. . Increased accuracy

AI-powered AP automation can achieve 95%+ accuracy within a month, cutting out costly errors like duplicate payments or incorrect invoice amounts.

Machine learning continuously improves data validation over time.

4. Enhanced visibility and control

Automated AP dashboards provide real-time insights into invoice statuses, payment schedules, and cash flow, allowing you to make data-driven decisions quickly.

5. Improved supplier relationships

On-time payments prevent disputes and build trust with vendors, leading to stronger supplier relationships (and, if you’re lucky, potential discounts for early payments).

6. Scalability

As your business grows, manual AP will become unsustainable.

Automation allows you to handle increasing invoice volumes without adding headcount, making it easier to scale operations how you want.

7. Compliance and audit readiness

With automated tracking of approvals and digital record-keeping, AP automation simplifies compliance with any financial regulations you need to follow, making your audits more efficient.

How does AP automation work in your day-to-day?

You’re on your office computer on Monday morning.

Your inbox is flooded with invoices waiting for approval.

• Your finance team spends time manually entering data and chasing approvals. Errors creep in, payments get delayed, and tracking cash flow becomes a nightmare.

Fast-forward to a Monday where you use AP automation.

• Invoices are captured and categorised instantly. Approvals move seamlessly through automated workflows, and real-time financial insights are just a click away.

See the difference?

Here’s a side-by-side comparison of how AP automation can transform your finance team’s daily operations:

Before AP automation	After AP automation
Monday morning chaos: hundreds of invoices arrive, requiring manual data entry	Invoices auto-captured: AI-powered data extraction scans, categorises, and enters invoices automatically
Time-consuming approvals: you manually route invoices for approval, leading to delays	Automated approval workflows: invoices are digitally routed to the right stakeholders with automatic reminders
Duplicate or missed payments: invoices are sometimes paid twice or lost, leading to errors and financial loss	Error prevention: your system flags duplicate invoices and mismatches before payment
Lack of real-time visibility: you struggle to track invoice statuses, delaying cash flow decisions	Instant AP dashboard: view invoice status, payment schedules, and real-time cash flow insights
Supplier frustration: your vendors call about delayed payments, and finance teams scramble to find invoices	Better supplier relationships: you resolve disputes faster by quickly looking up an invoice status
Leadership meetings without insights: no real-time data makes presenting an accurate cash flow update hard	Data-driven decisions: real-time financial reports provide clear cash flow insight before meetings
Buried in emails: you spend hours chasing approvals, tracking payments, and resolving issues	Finance teams focus on strategy: freed from admin tasks, you can work on forecasting, budgeting, and cost optimisation

You end up with fewer errors, faster payments, and a finance team that drives business growth instead of being bogged down by admin.

Why AP automation matters

Businesses that embrace cloud-based AP automation enjoy 25% more automation than their counterparts.

And with 73% of businesses planning to move to the cloud, automation is becoming a critical business priority.

Efficiency gains

By automating accounts payable workflows, you can optimise your teams’ productivity and allow them to focus on strategic tasks like financial planning and analysis.

Cash flow optimisation

Real-time visibility into invoices and payment schedules helps you make better decisions about managing cash flow, a critical factor for growth.

Data-driven decisions

AP automation platforms provide actionable insights that enable you to identify trends, reduce inefficiencies, and forecast future needs.

Risk management

By reducing errors and ensuring compliance, automation minimises financial and reputational risk.

How to choose your AP automation

To find the best AP automation for your business, consider these five key factors:

1. Integration with existing systems

Ensure the platform seamlessly integrates with your ERP or accounting software to avoid data silos and manual workarounds.

2. AI-powered capabilities

Look for AI-driven features such as:

• Auto-categorisation of invoices for faster processing.
• Duplicate payment detection to prevent costly errors.
• Smart invoice matching to POs, reducing manual verification time.

3. Compliance and security

Your AP automation solution should, at a minimum:

• Support audit tracking for regulatory compliance.
• Offer fraud prevention tools, such as approval workflows and the ability to flag suspicious transactions.
• Maintain secure data storage with encryption and role-based access.

4. Scalability and customisation

As your business grows, your AP system should adapt.

Choose tech that:

• Supports increasing invoice volumes without adding manual effort.
• Allows custom approval workflows tailored to your business processes.

5. Reporting and real-time insight

Look for advanced AP platforms with real-time dashboards that give you visibility into:

• Invoice statuses and payment schedules.
• Cash flow forecasts to optimise working capital.
• Vendor spending trends for smarter financial planning.

By evaluating these factors, you can select an AP automation tool that saves time, improves accuracy, and scales with your business needs—ultimately driving better financial efficiency.

How Sage Ai-powered AP automation works

One of your options for choosing an AP automation system is Sage Intacct powered by Sage Ai.

The Sage Ai-powered software has helped businesses cut invoice processing time in half, reduce manual data entry, and accelerate approvals.

With intelligent document extraction, automated classification, and real-time matching, Sage Ai streamlines AP workflows—freeing up hundreds of hours per year for high-value financial tasks.

The business benefits of Sage Ai

Sage Ai is embedded within Sage Intacct, a high-performance financial management tool that enhances invoice processing with advanced machine learning models.

Sage Ai continuously learns from invoices being processed by AP automation users, achieving 95%+ accuracy within a month.

Here’s how it transforms financial workflows:

1. Intelligent invoice capture and data entry

Unlike traditional Optical Character Recognition (OCR) tools, Sage Ai uses intelligent document processing to extract and categorise invoice data from emails, PDFs, and scanned documents—even in complex or unstructured formats.

The business impact:

• Learns and adapts to unique invoice layouts over time.
• Reduces manual intervention by recognising patterns and exceptions.

2. Smart invoice matching

Sage Ai automatically matches invoices to Purchase Orders (POs) and receipts, flagging discrepancies before processing payments.

The business impact:

• Faster, more accurate matching to reduce processing delays.
• Intelligent error detection to prevent mismatched or duplicate payments.

3. Automated approval workflows

Using historical data and user behaviour, Sage AI optimises invoice approvals, ensuring invoices are routed to the correct approvers with automated reminders to prevent bottlenecks.

The business impact:

• Identifies approval delays and streamlines workflows.
• Escalates overdue approvals to keep payments on track.

4. AI-powered payment processing

Once invoices are approved, Sage Ai optimises payment scheduling based on cash flow forecasts, vendor terms, and payment methods.

The business impact:

• Prevents duplicate or unauthorised payments.
• Improves cash flow management with dynamic payment scheduling.

5. Real-time reporting and compliance tracking

Sage Ai simplifies financial reporting with real-time dashboards that track invoice statuses, payment trends, and compliance data—ensuring businesses stay audit-ready.

The business impact:

• Reports tailored to your business.
• Predictive analytics for future cash flow forecasting.

Delivering high performance with AP automation

Companies using automation save 24 working days per year, so finance teams spend 58% of their time on strategic tasks rather than just 18% for those relying on manual processes.

Sage Intacct AP automation helps your business by making its financial management more straightforward and efficient.

You can:

• Eliminate manual AP tasks and reduce error.
• Gain real-time visibility into cash flow and vendor payments.
• Scale as invoice volumes grow.

With Sage Ai, you can:

• Gain enhanced accuracy—machine learning reduces human errors and improves data integrity.
• Increase speed—streamline invoice processing and approvals, shortening payment cycles.
• Get actionable insights—real-time analytics can help you make data-driven decisions.
• Boost scalability—Sage Ai can adapt to growing invoice volumes without additional manual effort.

By automating accounts payable—Sage Ai can transform it into a strategic financial function, helping you with greater efficiency and visibility.

AP automation real-world examples

Managing accounts payable at scale can be a significant challenge—especially when dealing with high invoice volumes, manual approvals, and time-sensitive payments.

Two companies, Johnny’s Selected Seeds and Cambio Community, show how the Sage Intacct AP automation goes beyond efficiency and boosts strategic business growth.

From paper checks to AI-powered efficiency

Johnny’s Selected Seeds, a global agricultural company balancing R&D, distribution, and a complex supplier network, faced inefficiencies with manual invoice processing.

Transitioning from paper checks to electronic payments was a key priority, but the workload was overwhelming without automation.

“Sage Intacct AP automation, especially its AI features, has been a game-changer,” says Michelle Pyle, finance director at Johnny’s Selected Seeds.

“The AI reads and extracts bill data, allowing for easier review. Once approved, it’s all done.”

By eliminating manual data entry and introducing real-time invoice processing, Johnny’s Selected Seeds freed up valuable hours—time that could now be spent on financial planning and business strategy.

Scaling AP to keep up with business growth

Cambio Community, a company focused on revitalising manufactured home communities, experienced rapid expansion—from two to 32 communities in just a few years.

This growth meant a surge in invoices, making manual processing unsustainable.

“Sage Intacct AP Automation became an invaluable asset,” says Cambio CFO Sarah Janowicz.

“Our invoice processing doubled from 1,500 to nearly 3,500 bills per month, and automation allowed us to keep up without adding extra workload.”

For Cambio, faster invoice approvals translated into quicker access to supplies and labor, which they needed to accelerate community improvements.

AI-driven automation also made financial data retrieval easier, providing a clearer picture of costs and vendor relationships.

“It ensures communities run better, houses are acquired faster, and the living experience is overall better for everyone,” Janowicz adds.

Beyond efficiency: A strategic shift

For both companies, AP automation became a critical tool for scalability and financial insight.

They could adapt to growth, improve business relationships, and make faster, data-driven decisions by embedding AI-driven workflows into their accounts payable process.

Their experiences highlight a shift in how AP should be approached: it is no longer a back-office function but a key driver of operational agility and financial health.

Final thoughts

AP automation is a strategic shift that can transform your finance operations.

You can optimise cash flow, reduce risk, and scale by eliminating manual tasks, increasing accuracy, and providing real-time financial insights.

Companies like Johnny’s Selected Seeds and Cambio Community show that AI-powered AP automation isn’t just about efficiency—it supports better decision-making, stronger vendor relationships, and long-term business growth.

With Sage Intacct AP Automation powered by Sage Ai, you can move beyond day-to-day admin work and focus on higher-value initiatives like financial planning, forecasting, and strategy.

As automation evolves, having the right financial tools is a competitive edge.

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If you sell products or services, keeping your sales order management running effectively is key to your business success.

Tracking orders is just the start.

From order creation to fulfilment and invoicing—you’ll need to ensure the complete order lifecycle is efficient and all the parts are working in unison.

This guide breaks down what sales order management is, how it works, and why getting it right matters.

You’ll also be able to explore best practices when it comes to streamlining your workflow, and learn how automation improves accuracy, speed, and order tracking.

Here’s what we’ll cover:

Steps in the sales order management process

An optimised sales order management system gives you real-time visibility into every order’s status.

This will help you eliminate guesswork and reduce the risk of delays, stock shortages, and frustrated customers.

On the flip side, if your sales order management isn’t optimised, it’s likely you’ll have to deal with miscommunication between departments, delayed shipments, and inventory discrepancies—which can impact both customer satisfaction and your bottom line.

A well-structured sales order management process keeps everything running smoothly—from the moment a customer places an order to final delivery and billing.

When all the steps are interconnected, you avoid delays, reduce errors, and create a seamless customer experience.

Here’s how it works:

1. Quote

Before an order is placed, your business may provide a quote to the customer, outlining pricing, product availability, and any terms.

Once the quote is accepted, the order moves to the processing stage.

2. Sales order processing

This is where it all starts—when your customer places their order.

At this stage, you’ll want to double-check the order details to make sure everything is accurate before fulfilment.

That includes verifying product availability, pricing, and customer information.

You might also need to review payment terms or check customer credit before approving the order.

Once everything looks good, it’s officially ready to move on to the next step.

3. Inventory sourcing

Once the order is approved, it’s time to determine where the inventory will come from.

If the item is in stock, it’s allocated and reserved for the order.

If it’s out of stock, this may trigger a backorder or a request to your supplier.

Throughout this process, your sales order management system updates inventory records in real time, making sure you always have an accurate picture of stock levels and reducing the risk of overselling.

4. Order fulfilment and shipping

With inventory sourced, your fulfilment team steps in to pick, pack, and ship the order.

Orders are sent to warehouses or fulfilment centres where they are carefully prepared for shipment.

Once packed, shipping labels are generated and tracking details are shared with the customer so they can monitor their order’s progress.

As soon as the order is shipped, the system automatically updates its status from “processing” to “shipped.”

Keeping customers informed of their order status at every stage helps build trust and improve their buying experience.

5. Billing and invoicing

After the order has shipped, it’s time to generate and send the invoice.

Your billing system creates the invoice and delivers it to your customer, outlining the total amount due.

Payments are then recorded and accounts updated, keeping everything accurate and current.

Using automated billing software can help make this process effortlessly efficient.

It helps you customise invoices, track payments in real-time, maintain accurate financial records, and securely connect with banks—saving your team time and reducing the risk of errors.

Best practices to optimise sales order management

If your sales order management process is inefficient, it can lead to delayed shipments, stock discrepancies, and loss of revenue.

To keep orders flowing smoothly and make sure your business runs efficiently, focus on these key best practices:

1. Audit your current system

Before making changes, take a step back and evaluate your current sales order process.

Identifying problem areas early on will help you make targeted improvements.

Start by asking your team a few key questions, such as the following:

• Are there bottlenecks causing delays in order processing?
• Do we frequently run out of stock or end up with too much inventory?
• Are manual processes slowing down fulfilment and leading to errors?

By pinpointing these challenges, you’ll get a clearer picture of what needs to be optimised—whether it’s streamlining approvals, improving inventory tracking, or automating repetitive tasks.

2. Automate where possible

Manual processes can be a huge time drain. If you’re constantly entering orders manually or chasing approvals, it might be time to embrace automation.

Automating your sales order management process helps you:

• Reduce human errors at the order entry stage, minimising incorrect shipments and unhappy customers.
• Speed up approvals by eliminating bottlenecks and keeping orders moving efficiently.
• Automatically update inventory levels as each order is placed, making sure you always have an accurate view of your stock.

3. Upgrade to inventory management software

Trying to keep track of inventory manually can lead to costly mistakes—like selling products you don’t currently have available or running out of stock at the worst possible time.

With the right inventory management system, you can:

• Prevent overselling or stockouts by automatically adjusting inventory as orders come in.
• Track inventory across multiple warehouses and fulfilment centres without the hassle of spreadsheets.
• Improve order fulfilment accuracy by making sure the right products are always available when needed.

4. Use demand forecasting

Running out of stock or overstocking products can take a big toll on your bottom line.

Accurate demand forecasting helps you stay ahead by predicting customer demand based on historical data and market trends.

Instead of reacting to stock issues, you can proactively manage your inventory and streamline operations.

With demand forecasting, you can:

• Plan inventory purchases more effectively, ensuring you have the right products at the right time.
• Avoid stockouts and costly last-minute rush orders, which can disrupt fulfilment and increase expenses.
• Improve customer satisfaction by keeping popular items in stock and ensuring on-time deliveries.

A strong demand forecasting strategy means fewer supply chain surprises and a smoother ordering process for both you and your customers.

5. Improve reverse logistics

Returns are an inevitable part of the sales cycle.

Handling them effectively can make a big difference to your customers’ experience and your inventory management.

A well-defined logistics process ensures returns, refunds, and exchanges are handled smoothly whilst minimising disruptions.

It allows you to:

• Make returns easy for customers, reducing friction and frustration.
• Process refunds and exchanges quickly so customers get resolutions without long wait times.
• Track and restock returned inventory efficiently, keeping your stock levels accurate and minimising waste.

By applying these best practices, your business can streamline its sales order management process, reduce inefficiencies, and improve customer satisfaction.

The benefits of an optimised sales order process

With the right setup, you can make your sales order process faster, smoother, and more reliable.

Here’s how an optimised process can benefit your business by eliminating bottlenecks, reducing manual work, and keeping everything running seamlessly:

Faster order processing

Automating your sales order workflows speeds up approvals, fulfilment, and invoicing, so orders move through the system without delays.

Fewer errors

Automation helps eliminate order entry mistakes, duplicate orders, and incorrect shipments, saving you time and money.

Better inventory control

With real-time inventory updates you’ll always have an accurate view of stock levels, preventing overselling and shortages.

Improved customer satisfaction

When orders are processed accurately, shipped quickly, and returns are handled efficiently, customers enjoy a smoother experience.

Higher profitability

Reducing inefficiencies saves time and operational costs whilst improving your cash flow and facilitating your strategic business goals.

Final thoughts

Optimising your sales order management process will help you work faster, creating a system that’s efficient and boosts your overall business performance.

When each step is connected, you gain better visibility and a more reliable workflow whilst reducing order delays and costly errors.

Customers receive their orders on time, inventory stays balanced, and your team can focus on business growth.

If you’re still juggling spreadsheets or outdated systems, now is the time to switch to automated sales order management software and take your business to the next level.

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The main difference between a sales order and a purchase order is right in the name: you use purchase orders to make purchases of goods, and the seller agrees to fulfil the purchase by confirming the details with a sales order.

This article looks at sales orders versus purchase orders in more detail, breaking down the main distinctions between these essential documents—so you can speak the same language as your suppliers and clients.

What is a purchase order?

A Purchase Order (PO) is a commercial document your company will issue when it purchases goods such as supplies, raw materials, or stock. It is formal proof of the transaction between buyer and seller, outlining the specifics of the purchase. These details include the type and quantity of goods or services, agreed-upon prices, delivery expectations, and payment terms.

A clear, legally binding agreement between both parties not only helps you track and authorise the purchase but also provides you with a framework for managing the entire transaction. It minimises the potential for misunderstandings or disputes, whilst generally streamlining the procurement process.

Your purchase orders allow you to manage orders, track spending, and maintain accurate records for accounting and stock control.

What is a sales order?

Turning the tables, if you’re the seller you typically respond to a purchase order by issuing a Sales Order (SO). This is a confirmation document agreeing to the transaction and accepting the details. It confirms the items, quantities, prices, discounts, and delivery terms. It’s basically a mirror image of the purchase order, formally acknowledging that you have received the PO and are happy with the details.

As the seller, you will then deliver the goods or render services requested, this time issuing an invoice. Whilst the sales order confirms the purchase request, the invoice is your official request for payment once the transaction has been completed.

Sales orders can be created in various formats, including digital, “configure-to-order” (for customised products), and “engineer-to-order” (for installations or specialised services).

Sales order versus purchase order: Key differences

The obvious differences are the timing and direction of travel: the PO is issued to the vendor first, and the SO is issued to the buyer in response.

But why not just have a box in the PO where the vendor can sign off their commitment to proceed? That raises some subtle but important reasons why both documents exist separately:

1. Internal records

If you’re the buyer, you can use POs to track spending against your budget, compare quotes from different vendors, or manage internal approvals.

And when you’re selling, your sales order triggers internal fulfilment processes. It can guide you in allocating stock, scheduling production, or assigning resources for service delivery.

The use of separate documents allows both the buyer and the seller to manage their operations more efficiently. Each document provides a clear and trustworthy record of transactions, which can be important for legal and accounting purposes.

2. Customisations and modifications

In some cases, the seller might request slight modifications to the buyer’s original PO, such as adjusting delivery dates or offering alternative products. A sales order allows you to document these changes clearly and get confirmation from the buyer.

3. Integration with other systems

Many businesses with integrated stock management, accounting, and CRM tools use SOs and POs as trigger points across the full order life cycle. In effect, the two documents can function as messengers between these systems, generating updates and actions in various departments and processes. This streamlines data flow and improves overall efficiency.

4. Legal status

In most cases, the sales order represents the point at which formal acceptance of the transaction is legally binding, particularly if it mirrors the purchase order. However, the original purchase order may specify that only its exact terms are valid, in which case the purchase order can also be legally binding. Sometimes, the purchase order will also specify acceptable deviations from the original agreement.

The point at which the contract becomes binding can also vary according to the industry in which you operate. And similarly, it could depend on the laws governing sales contracts in the jurisdiction where the transaction occurs.

Streamline SO and PO processes with the right software

Buying and selling are core activities of any business and sooner or later you will need to issue both purchase orders and sales orders. As such, it’s important that you recognise the nuances of each document, including timing, purpose, and key information.

It’s also crucial that you manage these documents efficiently to keep your financial records accurate and your cash flow healthy.

Final thoughts

Using intuitive accounting and purchase order software can help you simplify your PO and SO management, whilst optimising workflows, minimising errors, and maintaining healthy relationships with your suppliers and customers.

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You may have several departments steering your company towards a bright future. Some deal with the product offering, some with staffing, others with marketing. Let’s see where your finance team’s fiscal expertise fits into the overall game plan.

There’s an argument that all budgeting is strategic because it always involves scenario-based planning and allocation of resources.

However, truly strategic budgeting goes a step further.

It aligns your financial planning with your organisation’s long-term goals and objectives, and in this sense the term is valid in its own right.

In this article we go deeper into the factors that set strategic budgeting apart from general budgeting.

Here’s what we’ll cover:

What is strategic budgeting?

Strategic budgeting is long-term financial planning.

It takes into account broader market trends and factors such as economic shifts, industry developments or emerging technologies.

It’s about adjusting financial roadmaps to your company’s future growth initiatives and potential competitive positioning.

Key differences between strategic budgeting and standard budgeting

When you hear the word budget, you probably think of the typical annual budget announced at the end of a financial year.

That is a general budget, defining short-term financial management based on expected income and expenses for a given period.

It also usually includes specific variants like operating budget, capital budget, and project budgeting.

Strategic budgeting is different mainly because it involves more complex processes, such as higher-level analysis and cross-functional collaboration.

But there are some other key differences to be aware of:

Time horizon

General budgeting doesn’t cover more than a single year, or even specific quarters, and simply draws on your results from the previous period.

In contrast, strategic budgeting looks at a longer-term perspective, often covering multiple years, and has to be based on your company’s forecasts and projections.

This involves specialised analysis, taking into account the uncertainty of economic conditions, market trends, and unforeseen events.

Resource allocation

Strategic budgeting prioritises investments that drive long-term value like research and development, marketing for growth, and capital expenditures.

One of the main challenges is to make sure you have enough resources allocated to the areas that will have the biggest impact on achieving your strategic goals.

This is where Enterprise Resource Planning (ERP) software comes into play.

Flexibility and adaptation

Strategic budgeting is more flexible than general budgeting and is designed to factor in the likelihood of your business circumstances changing.

This includes shifts in market conditions or the emergence of new opportunities.

Continuous, proactive monitoring and reallocation of resources are needed to stay aligned with changing priorities.

In general budgeting, changes are often reactive rather than proactive.

Stakeholders involved

Strategic budgeting involves a broader range of stakeholders, including your senior leadership.

It leverages cross-functional collaboration to align your budget decisions with your strategic initiatives.

General budgeting, on the other hand, can be handled by your finance department alone, with indirect input from other departments to make sure that each area has the resources needed to operate efficiently.

Measurement and evaluation

General budgeting is assessed in relation to specific monetary goals and how well (or not) you stick to that plan.

The success of strategic budgeting is measured by factors like movements in market share growth, return on investment (ROI) from strategic projects, and overall financial health over a longer term.

The role of data in budgeting strategy

In the above point about time horizons, we stressed the importance of forecasts and data for strategic budgeting.

It’s worth going into greater detail about the mechanics of predicting general trends. Here are some points to consider:

Scenario planning

Strategic budgeting relies heavily on scenario planning, where you consider various future possibilities, including market disruptions, competitive actions, technological advancements, and economic shifts.

Your scenarios may cover best-case, worst-case, and most-likely outcomes, with strategic adjustments planned for each case.

Standard budgeting also draws on scenario planning, but is often limited to the immediate contingencies your company faces, such as changes in operating costs or short-term market fluctuations.

Assumptions and variables

Strategic budgeting is based on a wider range of variables compared to standard budgeting.

Your variables can include market entry into new regions, investments in new technologies, or shifts in consumer behaviour.

Projections must also account for strategic initiatives, such as mergers and acquisitions affecting your company, new product launches, or significant capital expenditures that may not have historical precedents.

For your standard budgeting, projections are more likely to follow predictable patterns (e.g. seasonal sales trends and inflation adjustments).

Risk assessment

Risk assessment is more important and comprehensive in strategic budgeting.

You’ll need to think about long-term uncertainties, such as regulatory changes, economic downturns, and technological disruptions.

You’ll also need to adjust your projections to include the potential impact of these risks and how they might influence your organisation’s chances of pursuing its strategic goals.

In general budgeting, contingency plans consider immediate financial risks, such as fluctuations in revenue or unexpected expenses.

Market and competitive analysis

For strategic budgeting, market and competitive analysis is also more in-depth, ideally using business intelligence solutions to assess long-term industry trends, competitive positioning, and potential market shifts.

You need projections that are aligned with strategic market opportunities, like capturing new market segments or responding to competitive threats.

In standard budgeting, on the other hand, the primary focus is on internal financial performance, with little need for market analysis.

Competitive analysis is usually limited to immediate impacts on pricing or sales projections.

Steps for drafting a strategic budget

Because of the long-term focus of strategic budgeting and the complexity of forecasting trends, planning for this model can be time-consuming.

The plan itself needs some degree of strategy, arranged in a series of phases:

1. Define strategic goals and objectives

Strategic goals are often defined during annual financial reviews, with input from your CEO or Managing Director, and executive team members such as the CFO, COO and CMO.

In larger organisations the board of directors will also have a say.

In dynamic, constantly evolving industries, strategic goals might need to be revisited and adjusted more frequently to respond to changes in the market, competitive landscape, or internal capabilities.

These goals focus on long-term targets, including growth, market expansion, and innovation.

2. Conduct a strategic analysis

Analyses to determine your strategy include evaluations of internal and external environments, often through a SWOT analysis, market analysis, and competitive assessment.

The insights gained will help you identify growth opportunities, potential risks, and internal strengths and weaknesses, all of which will influence your budgeting decisions.

3. Forecast revenue and expenses

Your budgeting team now needs to prepare projections based on both historical data and the strategic initiatives planned.

Accurate forecasting is vital as it will give you a realistic view of your available funds and how these should be allocated to support your strategic goals.

4. Prioritise strategic initiatives

Here, you’ll rank your main projects and investments based on their potential impact and value in achieving your organisation’s goals.

This prioritisation process will help you make sure that the most strategically important initiatives get the resources they need.

5. Develop budget scenarios

Once financial resources—and assets such as personnel and technology—have been assigned to the selected strategic initiatives, you can propose budget scenarios to prepare for uncertainties.

These scenarios typically include best-case, worst-case, and most-likely outcomes.

They allow your organisation to adapt its budget based on different assumptions about revenue, expenses, and external factors like market conditions.

6. Budget review and approval

Now, you can present the budget proposal to key stakeholders, including your senior leadership, for validation.

They will verify that the assumptions behind the budget are sound, evaluate the risks, and make sure that the budget aligns with your organisation’s strategic goals.

7. Monitoring and tracking

Once your budget is implemented—with funding, responsibilities, and timelines allocated—you will need to implement monitoring and controls to track progress and spending.

This involves comparing your actual results against projections, tracking key performance indicators (KPIs), identifying variances, and making any necessary adjustments to keep your budget in line with your objectives.

Typically, a final review will be carried out at the end of the budget period to decide on your programme’s effectiveness.

Benefits of strategic budget planning

By aligning your budget with your strategic goals, your organisation can focus on initiatives that drive growth, innovation, and competitive advantage.

However, there are other benefits to this approach as well. Particularly when supported by financial planning and budgeting software:

Better resource allocation

Strategic budgeting helps prioritise investments in the projects and initiatives that are most likely to deliver ROI or value over the long term.

Enhanced decision-making

With a strategic budget, your decision-makers have a clear understanding of how financial resources will be used to achieve your strategic goals.

This enables more informed and confident decision-making, especially when it comes to capital investments, new projects, and market expansions.

Increased flexibility and adaptability

Given the multiple outcomes proposed with scenario planning, strategic budgeting means your organisation has done the groundwork to respond to various future possibilities.

In other words, you’ll be better prepared to adapt to changes in the market, economy, and competitive landscape.

Improved performance monitoring

By linking budget allocations to specific strategic goals, your organisation can track progress more accurately.

This helps you identify where adjustments are needed, leading to better overall performance management.

Long-term financial health

By planning for future investments and considering long-term trends, your organisation can avoid short-term financial pitfalls and pave the way for ongoing financial health.

Common mistakes in planning budget strategies

Like all complex initiatives, there are many points in the budget planning process where mistakes can cause things to go very wrong.

Here are some potential pitfalls to look out for:

Errors in defining strategic goals

If you don’t have a clear vision, or choose the wrong objectives, your budget won’t support your long-term plan effectively.

Poor planning can lead to misalignment of resources and initiatives, which translates into missed opportunities.

Overly optimistic projections

Strategic budgeting depends heavily on forecasting future revenues, expenses, and market conditions.

Being overly optimistic in these projections can lead you to underfund critical areas or overcommit resources in others, ultimately jeopardising your strategic plan’s success.

Failure to assess external factors

Ignoring external factors, such as economic trends, competitive dynamics, and regulatory changes, can result in a budget that isn’t built to cope with external shocks.

In other words, your organisation will be vulnerable to unexpected changes.

Underestimating risk

It’s not enough to pinpoint opportunities or external factors without assessing their likelihood.

Your budgeting team must calculate the risk of each event happening and plan contingencies accordingly.

Overlooking this step can lead to significant financial and operational challenges.

Lack of flexibility

A common mistake is creating a rigid budget that doesn’t allow for adjustments when circumstances change.

This can get in the way of your organisation responding effectively to new opportunities or challenges.

Failure to monitor and adjust

An obvious requirement for flexibility is regular reviews and adjustments of ongoing performance.

Without this approach, your budget can quickly become misaligned with your organisation’s strategic goals.

Overemphasis on cost-cutting

Whilst controlling costs is always important, an excessive focus on cost-cutting in strategic budgeting can undermine long-term growth and innovation.

Don’t skimp on strategic investments if these are key to driving future success.

Inadequate stakeholder involvement

If you don’t involve key stakeholders, such as department heads or cross-functional teams, you could end up with a budget that lacks buy-in from important colleagues and that doesn’t reflect your actual operational processes.

This can lead to unrealistic budgets that are difficult to implement.

Different budget methods for different businesses

Some businesses are better suited to strategic budgeting than others.

But as organisations evolve they all go through stages where they can reap the benefits of strategic budgeting and scenario-based planning.

Strategic budgeting is particularly beneficial if you operate in complex or dynamic environments—characterised by rapid technological advancements, innovation, and ever-changing consumer preferences—or for large organisations with multiple departments and diverse product lines.

This also goes for companies operating in multiple markets.

A combined approach—incorporating both standard and strategic budgeting—is recommended for industries subject to rapid change, like technology and fashion, or highly competitive sectors where agility is essential.

Strategic allocation of resources also makes a difference for companies focused on:

• long-term projects,
• capital-intensive businesses,
• growth-oriented firms,
• regulated industries,
• and organisations undergoing significant changes, including mergers and acquisitions.

Is this the end of traditional budgeting?

Whilst traditional budgeting is by no means the only approach to financial planning, it’s hardly under threat.

It will always be crucial for most businesses, but we are seeing an evolution towards more flexible, strategic, and scenario-based financial planning.

Arguments for making your budgeting more strategic include increased uncertainty in many markets, the need for agility, and the effect of technological advancements.

That said, traditional budgeting is still very much relevant for regulatory requirements, stakeholder expectations, and operational necessities.

Most organisations are adopting hybrid approaches, gradually transitioning and adapting practices to their specific industries and complexities.

The future will likely involve a mix of traditional budgeting with newer, more dynamic methodologies as business needs change and technologies mature.

Final thoughts

Whether strategic or traditional, hybrid or fully transitioned to a new budget model, companies will always need technology to assist with budget planning.

Solutions like Sage AI-powered accounting software are constantly evolving to meet your shifting needs, helping you adapt and thrive in a dynamic financial landscape.

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Small start-ups can take off, even with limited resources, by testing a clear idea, solving a real problem, and building momentum one practical step at a time. 

Rob and Mart Drake-Knight set up their first small business, Teemill, in a garden shed. 

From tinkering with Epson printers to building factory robots from old parts they found on eBay, the pair built the first open-access circular fashion supply chain from scratch. 

Sound Advice host Bex Burn-Callander sat down with Mart Drake-Knight to find out how this journey now has them running a high-tech printing business with customers such as Google, the BBC, and Joe Wicks. 

Snap straight to the main points here: 

Bex Burn-Callander:   

Mart, thanks so much for joining me. Now, I read you started in a shed. So, what was your first goal? 

What was the first thing you bought, and what was the first thing you did to get this business off the ground? 

Mart Drake-Knight:  

We had £200. The first thing we did was buy business cards for £100, which was completely stupid. 

I don’t know why we did that. 

One of the first things we learned was that everybody’s doing it a certain way is part of why sustainability is a problem. So, not having money or resources was helpful for us. 

I am a big advocate of the zero-pound start-up. 

In sustainability, it’s relevant because it makes you resourceful and innovative for materials and designing out waste. Increasing utilisation and making more of what you’ve got is one of the most important things about the business of tomorrow 

So we said, “Let’s see if we can make some T-shirts.” 

We had a website that we couldn’t afford to pay for, so we learned to code through googling. We couldn’t design T-shirts, as I’m not very good at drawing, so we googled that as well. 

We decided we would try and make products after they’d been ordered, which was probably the first good idea that we had. 

Bex Burn-Callander:  

How did you do that? 

I’ve seen notes about you taking an Epson printer and then trying to pimp it with extra parts. What was that all about? 

Mart Drake-Knight:  

The thing about having not much money to spend is it forces you to get hands-on, understand how businesses work, where stuff comes from, and how you make clothes. 

But you’re not interested in how businesses work so that you can copy them. You want to go and find out so you can change it and make a better one. 

So we looked at how T-shirts are usually made, and it’s just completely insane. 

You have screen printing. You cut a hole in a mesh and smoosh ink through it one colour at a time. There’s lots of work to set up the presses and lots of waste, and it only makes sense to order hundreds of T-shirts at a time. 

At this time, you have to make T-shirts through mass production, which the current system is built around. 

We said, “This is stupid. You should be able to make it in full colour, in real time, one at a time, with no setup. You only make what people need when they need it, without any waste.” 

We didn’t know it at the time, but it was quite a good idea because we don’t utilise 40% of all clothing production. 

Companies make clothes speculatively en masse, and 40% goes straight through, never sold, in the bin. It’s crazy. 

By designing out that waste, we saved the equivalent of 40%. We could see efficiency and a return, allowing us to invest in other things, like renewable energy and organic materials. 

To do that, we needed to build a new type of factory. 

I think there are five or six Teemill facilities now—a network of factories, so it’s serious. Each one’s about the size of a football pitch—two in the Isle of Wight, one in Europe, and two on the UK mainland. 

When we first started, we were just trying to make our own printing machines. 

We used to cycle down the road to a guy. Every time we got an order, we’d cycle down the road to use this machine. This other guy had to do one part, and then we’d cycle back to our house to do this other bit. 

It’s just mad, but I guess what it taught us was it is possible to make things in real time. 

It was an office printer with T-shirt inks in it, and we wrote the code to automate parts of it. 

Now, it’s more advanced, and we’ve invested in the technology. We can print two full-colour T-shirts in less than the time it takes to make a cup of tea. 

What’s different is that we only make what people need using technology when they need it. The thing that came out of the resource-constrained problem we had was that we needed to develop new types of technology to make producing clothes more efficient. Those efficiencies have driven the growth of the business. 

Bex Burn-Callander:  

Are you on home turf? Are you in the Isle of Wight right now? 

Mart Drake-Knight:  

The west of the Isle of Wight, just down by the needles. It’s a great place to work. The factory site I’m in now is about a mile from Freshwater Bay, the Isle of Wight surf mecca. Lunch breaks, we can go to the beach and stuff. It’s wicked. 

Bex Burn-Callander:  

That is amazing, and you surf as well, so you get the ultimate work-life balance. 

Mart Drake-Knight:  

Yeah, surfing and working. There are a few decent WhatsApp groups if you want to get into surfing here. It’s a nice place. 

That’s the good thing about the internet. You can work somewhere like this if you want and grow a meaningful company because you can reach many people worldwide. You can base it wherever you are, and for us, this is home. 

Bex Burn-Callander:  

How did the journey of Teemill start? Take me back to the origins of the business in 2009. 

Mart Drake-Knight:  

It’s always nice to talk about it because I think when you’re busy growing your business, we’re bad at stopping and remembering these things. If we were doing it again, I’d probably take more photos! 

We started in a garden shed on the east of the Isle of Wight, belonging to my mum and dad. I was 19, and my brother was 21. 

It was 2009, so there were no jobs. We were naive, which was quite helpful. We looked at the clothing industry, thought there was a massive problem, and wanted to do something about it. 

Start with what you have, then let constraints guide smarter decisions. 

How to turn sustainability into a small start-up opportunity 

You can turn sustainability into a business opportunity by identifying waste, inefficiency, or outdated processes and building a solution that is both environmentally and commercially beneficial. 

Bex Burn-Callander:  

What made you think about the clothing industry, though? I remember being 19 or 20 and not focused on anything altruistic whatsoever. What focused your minds on that? 

Mart Drake-Knight:  

In the clothing industry, around 60% of clothing is made from plastic. Three out of five T-shirts bought today will be thrown away within a year, and most of that is landfilled or incinerated. 

You’ve got a dump truck a second of what is plastic textile waste getting burned or buried, and that’s completely unsustainable. 

I don’t know if it was altruism, but it came from a well-meaning place. 

We asked ourselves, “Why don’t we make clothes from natural materials instead of plastic? Use renewable energy instead of fossil fuels, and surely you can make clothes from old ones like recycling. Surely that can work.” 

We decided to have a go. 

Probably the most important thing was that we just couldn’t buy the products we wanted to see in the world. 

We just thought, “Why don’t we just make some?” That’s how we got started. 

Bex Burn-Callander:  

With this circular economy, you wanted the T-shirts to come back when they weren’t worn or wanted anymore. How did you do that there? 

I know you said that you had an incentive with money off, but people can be lazy. How did you get over those barriers to get them back? 

Mart Drake-Knight:  

That’s a great question. 

First, we designed the product, so it made sense to us that we would get it back. That’s the most important thing. If someone makes something with plastic (even recycled plastic), you can end up with plastic polluting and environmental problems. The reason why a lot of people don’t recover that waste is that it’s no good. 

If you design a product so you make it from a uniform material instead of a mixed material, where you’re trying to get an egg out of an omelette, suddenly, you can look at that as a business owner and go, “I want that back.” 

When you want the product back, instead of feeling like you must take it back, you start taking it more seriously. 

Many people say behaviour change is the problem, but I think it’s pretty lazy to blame the consumer when they haven’t got a choice about the type of places where products come from. 

Then, we just incentivised it with money by saying we’ll give you £5 off your next order and made it easy for them. 

You scan a code inside the product, get some automated communications, scan it on your phone, which will tell you what to do, and then free post it back. 

I guess what we banked on was that there’s one thing that people never do: throw money in the bin. When people started seeing their wardrobe as money instead of trash, their behaviour changed instantly. 

Bex Burn-Callander:  

This is gold. Take this nugget of gold. You know it’s gold, and we know it’s gold. No one throws gold away. 

Mart Drake-Knight:  

It’s funny because I wrote an article which is about that. “We’re looking around at these mountains of waste, and we never realised the whole time they’re mountains of gold.” 

Sustainability is a gold rush because there’s so much waste everywhere in every industry. 

All you’ve got to do is design it out, and your business is more efficient, more competitive, potentially more profitable, and will grow. 

Bex Burn-Callander:  

You talked about finding efficiencies in the business, which pays for cool stuff like renewable energy. 

Talk to me about this renewable energy journey, where you started and where you are now. 

Mart Drake-Knight:  

I studied renewables, such as wind turbine technology, and it was pretty frustrating it wasn’t more popular. From an engineering point of view, why do we use coal? It doesn’t make sense. 

So we like direct action. 

That’s one of the things that people don’t tell you about growing a business. If you’ve got a business, it’s successful, and you’ve got money, you can do a lot. So we bought a load of solar panels and planted a million tons of carbon-free trees. 

You can buy change, which means renewable energy powers Teemill. I think we’re carbon neutral and got the Carbon Trust to study us. It will be certified soon. 

Renewable energy is a bit more expensive per kilowatt, but we have technology and software that turns things in factories on and off, such as lights. If renewable is 15% more expensive, the trick is to see it as a connected system and find that 15% in efficiency savings from other places. 

Honestly, it’s not that hard and almost a slightly disappointing answer to your question. How did we solve the renewable energy problem? We did it because we wanted to. 

There’s on-site solar, so the lights here are powered by our solar array. In some places, we have wholesale power purchased from companies like Good Energy. In India and Spain, there’s solar and wind turbines as well out there. 

There’s a wind turbine factory on the Isle of Wight, so there’s the proper infrastructure. It’s not cripplingly expensive and easy to do. 

Solar panels are things you can contract someone to buy. 

The technology costs money, but not a lot of money. People love it. Businesses can sort out environmental issues directly by buying more renewables and fewer fossil fuels. It’s a way that businesses can do something about sustainability issues directly. 

Bex Burn-Callander:  

On that point about sustainability, I’d like to get a complete picture because I think it might be inspiring for anyone who’s starting a business and thinks, “What are all the things I could do?” 

You mentioned planting trees. You’ve got the solar farm and buy renewable energy from a provider. You do the organic cotton and the circular economy, so the cotton gets remade into new T-shirts. 

What else is in that mix? Did you say plastic recovery? 

Mart Drake-Knight:  

Yeah. David Attenborough’s got the answer because he is who we should all be listening to. I think some kid asked him, “What should we do?” And he goes, “Don’t waste.” 

If you can design stuff out, that’s the best thing you can do. In our business, designing out can feel quite hard. 

There’s a difference between design and decoration. A lot of businesses, when they get their product, say, “Here’s my product. Here’s some packaging. Here’s some extra packaging. Here’s some material. Here’s a flyer. Here’s this other thing.” And they add and add and add and add. 

Taking away is one of the best things you can do, and it’s cost-effective not to spend money. 

Something called swing tags is a relic of resale. You tie them onto the clothing to display product information—got rid of those. Super annoying, and nobody likes them. Neck size labels—got rid of them. 

You can design stuff out of your business, removing waste to save money. Waste is where sustainability and the economy line up. 

If you have a Venn diagram, you’ll overlap sustainability and economy, with waste in the middle. If you hunt waste, you can find many exciting opportunities. I think that’s pretty much true for pretty much every business. 

If you save time and money, you can use that money to pay for stuff. 

It’s true that plastic-free packaging, like paper packaging, is 10 times more expensive than single-use plastic. You can’t change that because recycling is more expensive than plastic, but you can make the packing time much faster. 

This saves time and money, which we can use to buy more sustainable packaging. So go hunt waste. 

The best green ideas often make the business leaner, not more complicated. 

How to build a business around a real problem 

Build a business around a real problem by identifying an issue people genuinely want solved and designing your product, operations, and business model around solving it effectively. 

Bex Burn-Callander:  

You’ve taken a traditional approach to the supply chain, shaken it up, and come up with something new. How did you do that? 

How did you create this new relationship with farmers? Bring in organic? What’s the process? 

Mart Drake-Knight:  

The hard thing was the most important: having a conscientious approach to technology. But the reason we did that is that we based the business on solving a problem. 

I think a lot of people forget that. When they say, “I want to start a business to make money,” that’s not a business. 

Businesses should solve a problem for society, and profit is society’s way of rewarding you for contributing. 

So, we were trying to fix clothing. 

One of the things we met with organic cotton and renewable energy was pushback for trying to do the right thing. It’s cheaper to be bad, and it hurts to be good. 

Indeed, that’s the wrong way around. 

What we needed to do was to go around the supply chain and find efficiencies. 

One of our highest costs was raw material and organic cotton. With the linear economy, we usually give the customer a T-shirt and then throw it in the bin when they’re done. You grow some new stuff, and they pay for it again. It’s stupid. 

Why don’t you give it back to me, where I’ll chop it up and re-spin it? 

We didn’t know it at the time, but that’s what people today call a circular economy. It’s hard to do because there’s a lot of engineering involved. There’s lots of design because you need to design the product from the start to come back and be remade. 

Every product we make is designed from the start to be used again. 

We give our customers money off their next order in return for the material. We use that material, chop it up and make new products from that material. 

Instead of creating waste, we create new products from it. That’s the circular economy in action. 

Fundamentally, it saves money because the customer gets money off their next order, and the environment doesn’t have a whole lot of waste and resources ripped out of it. 

It’s a win, win, win. 

Bex Burn-Callander:  

What about your ambitions? 

Because you talk about this journey, so where is Teemill going to go after this? What is the goal? 

Is there an ultimate goal, or is it to keep going? What would you love to happen? 

Mart Drake-Knight:  

If you start with a problem, you only stop if it’s not a problem anymore. If I was appointed CEO of some charity, your goal is to fire yourself when you’re not needed, as the root cause of all the problems that charity is trying to help is gone. 

We’re not there yet. 

Less than 1% of clothing worldwide is recycled back into clothing, so we haven’t touched the sides. It’s terrible that there’s still a dump truck a second in a landfill. We’re only on a few tonnes a month remade back into our stuff. 

We need to scale it. 

What we’re trying to do now is working internationally. We’ve shared the tech on the supply side. We’re sharing the free website builder and store tech for people who want to participate in the sales side. 

We’re now giving the production technology to other factories who want to modernise, get into sustainability, and supply businesses in a circular way. So it’s been quite fun. 

We’re doing something in Prague that’s a French joint venture thing, where we’re giving them the software, technology, and capability to implement inside the EU. … 

I think it’s just trying to make sure that we live up to the challenge we set ourselves. Genuinely make Teemill somewhere good that works for our customers and has fantastic tech. 

We’re building newsletters now. You can mail your whole database, and we’ll be focusing on that. 

I think from that, the growth will come. In our business, growth is linked to circularity and sustainability. 

We’ve got work to do. 

Bex Burn-Callander:  

And what about going beyond T-shirts? Because you could do lots of other things, right? 

Mart Drake-Knight:  

You teed me up there about something I’m so excited about. Jigsaw puzzles! 

It’s a great divide—a marmite subject. Half the team think it’s the best idea ever, and half of them think I’m a total idiot because we built a miniature jigsaw factory. 

You can use Teemill technology to print anything. It’s real-time print-production-to-order technology. T-shirts we’ve dealt with, but you can apply the tech to other stuff. 

We do stickers and art prints, but yeah, I’ve just done a Teemill jigsaw. 

I have it in this building, and it’s blowing minds. Watch out, jigsaw market with all your plastic and all your waste. We’re coming for you. 

I thought, “Jigsaws would be funny.” Like your face on a jigsaw would be a sick Christmas present. 

And then I thought, “I’m sure I can build a fully automated jigsaw factory.” Paper in, jigsaws out the other end. I designed it just for fun and thought, “Oh no, this is a stupid idea.” 

But I googled it and saw it was a £100 million market. Who’s buying all the jigsaws? People are at home doing them. 

Bex Burn-Callander:  

You can only have so many jigsaws in your home, and once you’ve done the jigsaw a few times, is there still any desire to do the same jigsaw again? 

Mart Drake-Knight:  

It’s a hobby. People buy jigsaws all the time. Anyway, it’s led to waste. It’s super-unsustainable, so why not? 

To answer your question, we’re just looking at the tech. It’s just a bit of fun, but it is a serious bit of fun. We’re looking at the technology, saying, “How could we apply this to other industries to design out waste and give people a real choice about recyclable products that can make a difference?” 

And if we can do that with our software and technology, why not? 

Often, we do stuff to pilot it, and we’re doing jigsaws to see what happens. Anyway, I’m excited about it if nobody else is. 

Bex Burn-Callander:  

I’ll be there. I’ll be printing my whole family’s faces on your jigsaws. …  

You’ve got twin businesses in Teemill and Rapanui. Tell me about Rapanui. 

Mart Drake-Knight:  

When we started, we built the brand Rapanui because who doesn’t want to build a clothing brand when they’re 19? 

Then we realised this might be a good thing that we’ve built here. 

We realised that we could fundamentally change things with the technology we’ve got. We could make products from natural materials using renewables, designed to be remade without single-use plastic. And it was affordable. 

We knew that we needed to scale Rapanui and were serious about making a difference. If you’re serious about a big problem, you need a big solution. You want everyone in the world to wear Rapanui, yet we struggled to get everyone in Shanklin to wear Rapanui. 

We needed to share Rapanui, so we put it on the internet, as you do, and gave it away for free on our platform, which is Teemill. 

Teemill lets anybody build a free website and design their own T-shirts, all for free. 

When they get an order, our technology and factory systems print them in real time, ship them directly to the customer, and send the profit. There are about 10,000 brands from small to big, from BBC and the legend that is Joe Wicks down to just people like us. 

What’s different is that they can do what took us 10 years in 10 minutes and start circular from day one. That’s how we’re trying to scale our solution. 

Bex Burn-Callander:  

You said it’s about having a problem to solve and not about making money, so it would make absolute sense to give this service away for free and let everyone else do it. 

If you were thinking about profit margin and what’s in it for me, it doesn’t make so much sense. 

But how did that feed the growth of the business? Is giving something away for free good for business? 

Mart Drake-Knight:  

It’s funny because it’s counterintuitive. But a business profits because of the good that it does. The customer is better off first, and then they pay you. That’s what’s supposed to happen, but it’s incredible how many businesses say, “Well, we need to get paid, and then maybe we’ll do something for the customer.” 

It reminds me of Dave Grohl. 

He said, “If you want to be a rich rock star, go to the garage and rock. And if you rock hard enough, eventually, you’ll be rich. But if you want to be a rich rock star and you try and get rich, you’ll never rock.” 

It’s kind of like that. 

It’s not “who cares if we make a profit?” Because if we don’t make a profit, we won’t survive. 

But the mission is why we’re here and why we need to profit to survive, not the other way around. It just doesn’t work. 

As long as the problem remains real, the business still has a reason to exist. 

Why innovating with technology means working one step at a time 

Technology innovation is more achievable when founders focus on solving one practical problem at a time and improve through continuous experimentation and iteration. 

Bex Burn-Callander:  

It’s fascinating because developing new technologies sounds quite terrifying, but what you’ve explained is that you started creating new technology by tinkering in a shed with some old printers, which is a lot more accessible for people thinking about trying to tackle problems. 

It’s a lot easier to imagine that than where you are now, which is full-scale robotics and high-tech stuff. It all started with this small step. 

Mart Drake-Knight:  

Yeah, you’re so right about that. 

Imagine if someone said to me, “If you want your business to succeed, you need a fundamentally different technology and completely different supply chain design.” 

I can’t do that. I’m 19 and from Shanklin. 

I will say, though, that it’s never been easier. We were pretty lucky because we were the first generation with high-speed internet, affordable laptops, and access to whatever knowledge you needed via Google. 

I don’t think people even 20 years before that had that, plus access to the economy in the sense that we can send stuff all around the world from the island. 

There are some great technologies we have, with the team of factories heavily automated. 

There are many robots in the factories at essential stages, such as automating parts of the packing process, making it affordable to design our single-use plastic. 

But the technology doesn’t have to be from a laboratory or some multinational. 

We built our robots with Raspberry Pis, which are like educational computers for kids. 

These can cost about £20, and we developed this little clip thing that clips on to them, turning a little kid’s computer into what is like an industrial robotics controller. 

The people who build all our robots aren’t formally trained technology graduates. Adam, who’s easily our best robotics engineer and amazing, worked on a farm before working in our robotics team. 

We’re enabling technologies. Tech doesn’t do anything on its own. It’s like a chainsaw sat in a corner. You need to pick it up and do something with it, and I don’t think enough people are encouraged to have a go. 

Bex Burn-Callander:  

Am I right in thinking that even with the dyes you use, you’ve looked at every element and reconfigured it so that it’s less wasteful and impactful on the environment? 

So what’s different about the dye? 

Mart Drake-Knight:  

That’s a good question. Inks and dyes are the two sides of this, and it’s about the chemistry. 

Inks are an interesting problem. We wanted to use water-based inks because they sound better. Then you have a synthetic or polymer-based ink that dries with one-seventh of the energy, which is better. But then, if you can get that energy from renewables, it doesn’t matter so much. 

So, you flip-flop. It’s not like you get up in the morning and go, “There you go, done.” 

Some of these are problems for a reason, and it takes time to solve. 

There’s a philosophy we use, which is called iterative development. It’s not like you’re ever just done. It’s a constant improvement process. 

A lot of the ideas that we get are from Japanese car manufacturing books. One is called The Toyota Way, which is excellent, and they’ve even got specific words for things. There’s the word kaizen”, which means “constant improvement”—you do that with everything. 

Water-based inks are compatible with the organic standard. We can do that affordably because we’ve got renewable energy-powered driers, so it dries for free. 

In the dye house, it’s water that’s the problem because it’s so wasteful to yank water out of a river, dye it, treat it, and then just mainly pour it back in the river. I think there’s quite a lot of TV programmes about these blue rivers. 

The solution is to recover the water, distil it like at school, and put it through sand. Then the wastewater’s clean enough to drink. 

I think there’s a video on our website of me drinking this distilled water. We’re just reusing the water we’ve got, which is cheaper. So again, reusing what you’ve got removes waste, solves the sustainability problem, and saves you money, so your business can grow. 

Bex Burn-Callander:  

I remember you telling me that nothing can compete with reusability. There’s absolutely nothing that’s cheaper than reusing, which is why it should just be the first port of call for any entrepreneur. 

Mart Drake-Knight:  

It’s how nature works, right? Everything is reused. Waste from one process is fuel for the next. 

Think about an old organic biodegradable T-shirt. If you designed it from natural materials and it’s compatible with nature, it will be a house for a woodlouse or something. You’re welcome, Mr. Woodlouse. 

But seriously, take it in a business context. 

Imagine we have got competing bicycle brands. I might say mine’s going to be slightly cheaper. But if they’re disposable bikes, you’re pitching a bike, driving it to work, and throwing it in a bin. You buy another bike, you drive it back home, and you throw it in a bin. 

Then I just come in and say, “My bike is 5% more expensive, but you don’t need to throw it in the bin anymore. It gets reused and reused and reused. I’m going to beat you.” 

We see that everywhere. 

With space rockets, SpaceX is dominating because of reusability, and that’s what we’re talking about with waste. 

If you’re in a business that makes stuff and your customer throws it away, someone in your sector is going to make the link and go, “Hang on, what they throw away is our raw material, plus they’re our customer. We can reengage them by getting that stuff back.” 

They’ll do it, reactivate the customer, cut their materials cost, and win. What you want to do is make sure that person is you. 

Bex Burn-Callander:  

Have you seen that Teemill is a catalyst for change? These people come to you and build whole T-shirt brands on your technology. 

Are they doing any cool stuff that’s pushing things even further? 

Are they doing anything inspirational where you say, “Wow, I didn’t even think that was a way you could go with this”? 

Mart Drake-Knight:  

That’s the best thing about it, and to be honest with you, kind of unexpected. That’s why the iterative approach makes sense, because if you just take it one step at a time and keep trying to improve, all sorts of weird things happen. 

Some of the brands built on Teemill are awesome. Or people like Joe Wicks. A lot of charities that used Teemill made millions of pounds for charity last year. 

Joe Wicks did something with NHS charities, selling tens of thousands of T-shirts. He raised hundreds of thousands of pounds using Teemill. Incredible. We came into work, and it was, “Whoa, who’s Joe Wicks?” 

It’s excellent when famous people use it because it feels like it’s encouraging people to do something. 

If you’re a young person, it’s easy to look around and think big businesses are taking the biscuit a little bit. But BBC Earth, for example, switched all their mass production for Blue Planet to Teemill. They have backed it and stuck by the circular economy. 

They care, and that’s encouraging. 

And then probably the highlight of my career was when the Chuckle Brothers built a Teemill store. You can’t top that, can you? It’s all downhill from here. That was the greatest ever. I almost said, “That’s it, you can’t get better than that.” 

What gets me and everyone in the team out of bed in the morning is when young people build brands and use them for issues they care about. What we want to do with the business now is enable technology. 

It’s incredible seeing how people are doing using tech to do good things. 

Bex Burn-Callander:  

Have there been any times when you’ve got it wrong? 

Any massive mistakes that you had to fix? 

Mart Drake-Knight:  

Quite the opposite. The whole thing has been a complete disaster from start to finish, but that’s growth. 

That’s what no one tells you. 

The whole thing is mistake after mistake after mistake. If you drew an X, Y graph, at the end is all of the stuff you’ve learned and at the start is all the stuff you’re going to learn. You’re going to be wrong most of the time. 

All sorts of stupid stuff. Starting with the business cards—what were we thinking? I’ve probably still got them. It’s an internet business. What do you need business cards for? 

And then the place burnt down, so that was bad. 

The business was just getting going, and we’ve got this big factory. We were in a shed, then we were in a garage, and then we got a factory the size of maybe three or four tennis courts, sort of size. We felt we might have just about survived. We might not go bust. 

And then I was walking back from lunch, and there was a lot of smoke over the top of the town. “Oh, there’s a fire. Let’s go and rubberneck.” 

We’re walking down to figure out who’s on fire. It was our building, and everyone was outside. 

But we didn’t start it. 

Next door, someone was welding next to a barrel of diesel, and the whole place went up. I think it was the biggest industry fire on the island in the last 100 years. It was huge—seen from space. 

Questions like “how do we rebuild from this?” That’s the job every day because things will go wrong. 

You’ve got to be the person that figures out how to get over an ongoing series of obstacles. That is the way. That is the path. 

We had insurance, but there were delays, so you need to call and work with your customers, explain why stuff will not arrive, and try to make lemons out of lemonade. 

So, we took a lot of pictures and made a joke about it. 

You know the film Apocalypse Now? So we used “Apocalypse Cows” and said, “Can you please order this T-shirt, so we don’t go bankrupt? We’ll send it when we’ve rebuilt.” 

And everyone said, “OK.” 

You try and make some sales out of it. 

You find a way, and it’s constantly non-stop. You’ll make mistakes all the time with everything—technology and the team. Sometimes you might say the wrong thing. 

The trick is confidence, which comes from ability, which comes from the things you’ve learned, which comes from the mistakes you’ve made. 

You need to be good at going, “OK, I’m wrong. This is a mistake. What am I going to do about it?” That’s what you need to do every day. You do that for long enough. You get good. 

Progress comes from testing, improving, and accepting that mistakes are part of the process. 

How to perfect your supply chain relationships 

Build stronger supply chain relationships by working directly with suppliers, understanding how materials are produced, and designing products around real operational constraints. 

Bex Burn-Callander:  

Am I correct that you now have relationships with the farms that grow the cotton, so the supply chain is shorter even when you need more raw material? 

You’re not dealing with too many intermediaries. How did you create that direct relationship? 

Mart Drake-Knight:  

Yes, it’s an interesting question. The weird thing is that people think many sustainable business principles create more expense, but it’s cheaper and better if you get it right. 

What most people do is they buy from a supplier, who buys from an intermediary, who buys from a distributor, who buys from a wholesaler, who buys from someone on the ground. 

Whereas if you go to the field and buy it from them, you could afford to pay them more and get your raw material for less, plus you can have conversations with them. 

Going to an organic cotton farm is fantastic. 

There’s a farmer whose whole family has been growing cotton forever organically. There are non-organic farms a couple of miles down the road, as it’s up to you what you do out there. 

The amount of insect life is unbelievable. It’s mostly cow poo and co-planting. 

If you plant different crops together, and the insects prefer the other ones, you get less cotton, but you can charge more for it, as the ground’s clean. Then you can grow onions and other stuff in the dry season, 

You talk with the farmer, and they’ll say whether they can do this or that and the problems they may have. 

It’s incredible. 

As a designer, you don’t realise how much responsibility you’ve got until you do that. 

Linear supply chain sequences can cascade to cause all these problems for people worldwide and create a lot of waste, whereas if you go and ask them, they can tell you the sequences are a complete nightmare. 

As a designer, you’ve got the power to stop a linear sequence. I don’t know how designers and brands have been getting away with it for so long. Everyone’s blaming customers, but often, they haven’t got a choice. 

Designers and brands need to buy differently, choosing to avoid linear consumption and waste, which they can do. 

Getting out there as a designer, meeting these people and collaborating, is the best part of the job. 

Bex Burn-Callander:  

That is so interesting. To make a fit-for-purpose product, you must connect to the raw material, customer, and whole production technique, to design the right thing. Nothing can happen in a silo. 

All the information must be in one place as a connected system. 

Mart Drake-Knight:  

But before you build that, why are you making the product? 

I think people make products without working that out. They’re saying, “I don’t know, to make money.” That’s not good enough. 

There must be a reason for this thing to exist in that form, so why have you used that material? Why haven’t you questioned it? 

I suppose it’s been easier for us because we knew why we were doing these things. It’s incredible when you’re going around meeting the people that do this stuff, listen to their expertise, and respond to it. 

When we started with traceability, someone quoted what we were doing was game-changing. We just thought it was common sense, which is one reason why naiveté is sometimes quite helpful. 

We’ve had great advice from people who’ve been there and done it in our growth, but we benefited early on in having a complete, fresh look, as there is no fashion industry in the Isle of Wight. 

There’s very little industry here, except for ice creams and Teemill now. 

You want to be super-curious about how you make things because fundamentally, if you want your business to succeed, you need to do something different and better. 

That means changing things. 

Better supplier relationships can make the whole business more connected and responsive. 

Download your free side hustle toolkit, comprising a side hustle guide, business plan template and cash flow forecast template 

How to build the right start-up team 

Build your start-up team by matching people to their strengths, values, and potential, rather than forcing fixed roles before the business understands where each person can contribute best. 

Bex Burn-Callander:  

Talk to me about the dynamic between you and your brother, Rob. You started this thing as kids and have built this business together. 

How important has that trust and bond been? How have you worked all that with your dynamic? 

Mart Drake-Knight:  

I’m still a child. I haven’t worked out what I’m going to do when I grow up. 

Well, it’s good to work with your brother because there’s a lot of stuff you don’t need to work out. You know each other. 

One of the best things we did was divide our responsibilities. 

When we both did a bit of everything, we used to tread on each other’s toes. One of the best things we did was say, “You do that, I’ll do this.” We learned to defer to each other on those things. It was a decision we made early and really helped. 

Bex Burn-Callander:  

Was there a natural delineation in that you both had skills and they were different, or did you have to say “OK, you take this bit, and I’ll take this bit”? 

Mart Drake-Knight:  

With us and what we’ve learned about our team, it’s essential to play to your strengths and not put someone in a position where it’s not their preference, or they’re not comfortable just because they’ve got to do it. 

I suppose we’re fortunate that we have slightly different characters. 

Rob’s good at business administration, finances, business, great with people and negotiating. 

He loves doing deals. 

If he could get up, have his cornflakes, and then negotiate 1% off a consumable somewhere, he would be in heaven. 

Whereas me, I don’t want to worry about money. 

I got this idea, and we need to build it. I won’t sleep for three days, but I will build something if I’ve got all the tools and equipment. I can’t do the other stuff. 

That complements each other in an innovative applied engineering sustainability business because I can do the first bit, and he can do the last bit. 

That’s especially true as the business grows. 

We have this philosophy. I think it was in a book called Good to Great by Jim Collins, where he said, “Get people on the bus that you know are good eggs, have the same values as you, and believe in your mission.” 

Where they sit specifically is something that might change, and you’ll find what they’re great at. 

I think figuring that out as we went was smart. If we’d have set it up and gone, “We’ve got to do this, and you’ve got to do that,” we would have probably fallen out and not be doing this now. 

Interestingly, we spend a lot more time on recruitment, which is a good idea, but it’s slow, as it might take months to find the right character. 

We prioritise values, attitudes, and potential. You can teach the rest. 

There’s a certain number of technical tests in engineering, but it’s mostly about problem-solving: how much of a self-learner or determined you are, and whether you’re a problem-solver. There are multiple interviews, but they’re mostly built around establishing people’s intent, values, and alignment with the way we work. 

And so, if you’re a little bit weird, don’t wear the right clothes, and haven’t got any experience, we don’t care. 

But if you’re respectful and want to learn, good with empathy and capable of picking yourself up with a bit of grit, saying, “OK, I’m wrong, but I’m going to try again”, that’s more important to us. 

It’s an interesting part of the journey. It’s kind of weird. 

You go from zero to 10 people, and then you’ve got to learn the whole thing all over again when you go from 10 to 100. 

Bex Burn-Callander:  

I love you prize things like empathy, but I think one of the great unanswered questions in business is, “How on Earth do you sit in front of someone and know whether they have that?” 

What question do you ask to find that out? 

Mart Drake-Knight:  

I don’t know. It depends on different roles, but I think everybody has their way of doing it. 

I think what matters is the outcome. Are you getting that person in because you think they can help you hit your target in the short term? 

Or are you doing that because you want to help brands on waste, and you think this person will be a long-term asset on that mission, although it will take six months’ investment? 

If you know your mind, you can find the right questions. 

Hire for alignment and adaptability, then let people grow into the work. 

How to manage the highs and lows of running a business

Founders manage the highs and lows of running a business by keeping perspective, learning from setbacks, and relying on supportive people around them during difficult periods. 

Bex Burn-Callander:  

Do you get tired? 

Hearing you talking about having to constantly wake up every day and think, “How can I make things better?” … Where do you get your drive and energy? Do you ever want to give it up? 

Mart Drake-Knight:  

It’s a good question. I think anybody who said no would be lying. You’re only human. 

One of the hardest things is to disconnect the business from yourself. Many founders will probably say, certainly in the first 10 years, especially if you care about stuff, you’ll take things personally. I certainly do. 

I find it very hard if someone criticises the business or writes some horrible review, and they know what they’re doing. 

When people do that, they’re doing it with the intent to cause harm for whatever reason it might be. They might be frustrated or trying to write some article to get some traffic to benefit from—whatever. 

It can be upsetting and tiring. 

I think progress is the reward, though. When you see progress and momentum, that brings encouragement. I think having people around you helps. 

Through our situation on the island, you don’t have a university or anything like that, so many of our team were vocationally trained and have been with us a long time. That was one of the best things that we did. 

Half of the management team used to be apprentices or trainees. You’ve got people who appreciate and want to be in the business, and so I think it’s kind of like you’re working for them. If you have a bad day, those people can cheer you up. 

There are some things you just can never get good at, and you need other people around. 

I’m rubbish at stuff like the spreadsheets. I can do accounting, but I don’t like it. 

With enough experience, those highs and lows become manageable. You’ve seen it all before—it’s never that bad. We’ve had worse—the business burnt down. Come on. 

Bex Burn-Callander:  

Yeah. Keeps a perspective on things when you’ve seen your business burn to the ground. 

Mart Drake-Knight:  

And the other way round. If you have a big month, OK, but next month it could burn down, so let’s not get too excited. 

I think things settle. There’s only one way to get to that point—time. 

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Frequently asked questions on small start-ups and sustainability

 

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