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Starting a business podcast

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Tim Fouracre talks about his experience of starting a business

Where did the idea for Clear Books come from?

The idea for Clear Books came from two areas really. There was my mum who was running a theatre school and she needed some accounting software to do the books, but also the brother of a friend of mine was running a construction business, and the brother was really disorganised with his invoicing.

They were using Microsoft Word, and copying and pasting and getting the customers wrong when they were sending out invoices and it was all a bit of a mess. As a result, my friend created an online invoicing system for his brother’s construction company and I created an online bookkeeping system for my mum’s theatre school. We were just talking about our two systems one day and we thought “wouldn’t it be a good idea if we stuck the two together, and we’d have the basics of a full accounting application?” That’s really where the idea came from— it was the pain points that our family members had that inspired us to create Clear Books.

How did you develop the idea and come to the realisation that it was going to become a viable business?

The idea developed from what my mum needed in her theatre school to run her business and what my business partner’s brother needed to run his construction business. They had lots of ideas about what the system should do to help them be more efficient and save time and that really was the catalyst for how we developed Clear Books and still develop it today. We always listen to what our customers want in the system and based on how many people are asking for a particular feature, we’ll then prioritise certain features over others. The whole system has developed over time from listening to our customers and building what they want.

In terms of it being a viable business, when we started, the cloud was just taking off so there weren’t many cloud applications at the time. We knew that accounting software was important and that lots of people used it because there were huge companies like Sage which turn over billions of pounds with millions of small business customers. So for us it was a case of “could accounting software be provided in the cloud, and would people get over security fears and this new technology and embrace it?”

We didn’t know whether people would but we had a hunch they would, so we just went for it, and built it and created it. It was working for my mum’s theatre school and my business partner’s brother’s construction company, so we knew the seeds of demand were there and it was just about finding more people who would be interested in this new technology.

What are the stages and processes you went through when starting Clear Books?

When we had the idea for cloud accounting software, we thought no one else had thought of this and we thought we were onto a unique idea. So I quit my job to start the company, and we then of course found that there was a competitor here, and another one there, and there were actually some people who had started cloud accounting software a year or two before us. The process we went through was just to dive in with two feet since we thought it was such a good idea. Even though there were other people doing it, no one had achieved scale at that time, we were all really small compared to the huge “Sages” of this world, so we just got stuck in.

How did you make your business plan? Did you get help from friends or any books or articles?

My background as an accountant did help to some extent in that I worked with a lot of companies auditing them. I’d gone through exams, trained and qualified as a chartered accountant, so I was aware of what I should be doing. However, a lot of that just went out of the window, and as I mentioned before, it was just about getting started, doing something and getting it off the ground as well as having the determination to work all hours to get Clear Books up and running.

To be honest, we didn’t really have a business plan. All we wanted to do was to combine the double entry bookkeeping system that I had developed with the invoicing system that my friend had developed to create one system and then try to get some customers. That was our only plan and we just worked really really hard to do that, and luckily for us we knew a little bit about online marketing and so we knew how to get good rankings in google and get traffic to our website which really helped get those early customers through the doors to get traction for the business.

How easy was it for you to set up the Clear Books website?

Setting up the Clear Books website was relatively easy because I did have a background in computing, although I am hopeless at design and front-end work. I did get some input from my co-founder who helped with the design work on our first website.

We are a web-based business so creating a product on the internet is what we do. I was somewhat fortunate, but it was also natural that the business I pursued has combined my two areas of knowledge and that is web development and accounting. I spent a year as a web developer just after university and then I trained at KPMG to become an accountant. These are my two areas of expertise and they came together quite nicely to form a cloud accounting software.

So it was relatively easy to get the website up and running but I think that when anyone starts a business, the sensible thing to do is to create the business around where your key strengths are. Whether it’s web development and accounting or something completely different, whatever trade you’ve picked up over the years, it’s quite sensible and common place to pursue your area of expertise when you intend to become an entrepreneur.

How did you get your first customers?

Our first customers were family and friends. At the beginning we launched a beta period where it was completely free to use the software while we were combining the two systems and making sure our system was robust before we started charging for it.

During that stage, and because we’d started to rank well in Google, we were getting traffic coming to the site and we found that because this was new technology and was part of the ‘Cloud’ which was very new seven years ago, a lot of IT experts and early adopters who were interested in the latest trends, embracing new technology and being really efficient with new ways of working, were interested in Clear Books.

We got lots of people, typically with an IT background finding us, trying us, giving us loads of good feedback, helping us improve the product, and all these beta testers became our first one hundred customers. When we launched officially, we gave our beta testers a special offer to sign up, and that’s really where all of our first customers came from though ultimately it came from Google organic search results.

Did you use any paid form of advertising?

We used Pay per click, which is Google AdWords online paid marketing, at the beginning, and it was really successful to start with. But what you’ll find is that as industries mature, they get more and more competitive and expensive, so those marketing tactics that we used in the past aren’t as effective. The cost of acquiring a customer these days is a lot more expensive than it used to be as the demand for the service has increased. We’ve got all of the traditionally desktop companies now coming into the cloud, so there are lots and lots of businesses competing for a limited number of keywords in the online paid space which makes it a lot more expensive.

Where most companies can be really successful is just word of mouth, viral marketing which is free and that is brilliant. That really did put us in good stead and still does. We get a lot of traffic just from people knowing our brand name now and our customers talking about our product to their friends and family. The viral effect of word of mouth is fantastic.

Are there any common positive or negative misconceptions about starting a business?

The big advantage and disadvantage of creating and starting your own business is that you’re now responsible for everything to get the business off the ground. This means that you become very passionate about what you’re doing and you put all your time into it. I was lucky because when I started Clear Books I wasn’t married and I didn’t have any children—both of which I have now—so I could be very risky with my approach to creating and running the business. All my eggs were in that basket, I didn’t have a wage to fall back on or that security of employment any more.

You can take big risks and the advantage of that is that you are creating something that you believe in, that really drives you to work and that you will be motivated to make a success. So there are pros and cons to it, but ultimately if you push through, you are determined and you can get it off the ground then as your business grows and becomes an entity in it’s own right, you can begin to delegate your work.

At the beginning you’re doing absolutely everything and as your business does grow, you’re able to step back and let others step up, take responsibility and be accountable for different areas of the business, and as that happens you get more time and the work becomes less full on.

What were the main challenges that you faced when starting Clear Books?

I think whether you’re starting a business or you have a business that already has traction and you’ve got revenue and employees; there are always different challenges.That’s really what makes it interesting and exciting, there’s always something different to challenge you and you’ve always got to overcome that challenge.

In the beginning it was “can we combine these systems and how long will it take?”, then it was “where are we going to get our first customers from?” and so on. I think a big challenge was facing up to when we were ready to charge for Clear Books. That is quite scary because you don’t know if people are going to pay, so once we got our first customers and we found that people were willing to pay for the product, we gained the confidence to go on.

There have been all sorts of challenges over the years, one of which was thinking you can rely on others to grow your business. We thought we had a fantastic partnership opportunity with a large bank that never really got behind the venture, and we thought we were going to get significant growth from that. That made us realise that the destiny of your business is in your own hands, and you can’t rely on others so you’ve got to grow it yourself. There have been and continue to be lots of different challenges.

What would you say has been the highlight of running Clear Books so far?

I think the highlight of running Clear Books is knowing that we’re helping so many small businesses run their own business. We’ve now got ten thousand small business customers who rely on us day to day to process billions of pounds worth of invoices per year, which is phenomenal from where we started seven years ago.

It’s also great watching the team grow and evolve. The constant team building and team spirit we have here is always very rewarding.

Is there any point in your mind that stands out as Clear Books having become a success.

There have been a few milestones along the way. The first customer was definitely one, in fact we had a champagne bottle for each customer milestone. So for the first one hundred customers, then the first five hundred customers, then the first one thousand customers, we’d pop open a bottle of champagne and put everyone's name who was at the company at the time, on the label.

Other things have happened since. We raised one and a half million pounds from our customers which was fantastic and a real highlight. It was really exciting for the whole team to see. The evolution of the product has also been great, for example adding Payroll as a new application. Launching in the Netherlands as part of our plans to go European, launching our first overseas subsidiary and getting customers in the Netherlands has been the most recent milestone, and I’m sure there are many more to come.

What is the one mistake that you’ve learnt from the most?

Nothing is ever necessarily a mistake, it’s often just a learning experience and when you’re a start up with a team of three or four and have very limited resources, it’s often difficult to do everything you want really really well. It’s only as your team grows that you can focus on different areas and really get that quality of service in each focused area.

What do you think has been particularly vital in the success and growth of Clear Books?

I think there are lots of ingredients that have helped make us the company that we are, and that starts with the team. You’ve got to have a really good team that believes in what you’re doing and believes in helping all the small businesses that we do. We also can’t forget about the small businesses themselves. We’ve got to make sure they are happy with the product, that they are happy with the level of service they get and you’ve got to make sure you keep those customers happy. That’s what our mission is, to keep our customers happy and to support them in growing their own business.

The other thing is timing and being lucky. The cloud was just taking off when we started seven years ago so we really rode that wave and were very fortunate to start our business when we did. I think if we were starting Clear Books today, it would be very difficult to get the traction that we have got, given how many competitors there are in the market now, so you’ve got to be a bit lucky.

What advice would you give to someone starting up?

I think if you have an idea you need to sense check it. Find someone who will give you an honest opinion “is it a good idea?” and if they give you their support then just go for it.

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