Duane Jackson, founder, KashFlow

Duane Jackson of accountancy software business KashFlow explains why becoming an entrepreneur really was his only option, how the Prince’s Trust helped in the early days and why a chance meeting with a former trade secretary made KashFlow the success it is today.

Explain your business so my mum would understand it.

We provide accounting software to small business owners that don’t have a degree in accountancy.

But here’s the twist: It’s not the type of software that you install on your computer from a CD or by downloading something. It’s “web-based”, which means you just log in to it via your web browser from anywhere in the world.

Why did you start a business in the first place?

My first business was a web-development company. Prior to starting that I’d been unemployed for a few years, hanging around with dodgy people and generally getting myself in trouble.

My then girlfriend (now wife!) became pregnant and I realized I needed to do something with my life for their sakes if not my own. I couldn’t get a job because of my past, so going it alone seemed the only option.

Very quickly after starting the web development business I realised two things:

1) I wanted to be able to sell a product rather than a service as there was much more money to be made

2) There was no product around to help a small business owner like myself, with no accountancy training, to easily invoice clients and keep accounting records.

The rest, as they say, is history.

What surprised you most about starting up?

I was very surprised how much help is out there for those wanting to start a business, especially from the Prince’s Trust. I went to the Prince's Trust to get a loan to start the business. At first I thought I’d be able to walk in with my rough business plan and walk out with a cheque and a pat on the head.

The reality was very different. I was assigned to a lovely lady called Heather Skea who helped me get my business plan in to shape and pointed out areas I’d missed out or not gone into enough detail.

Three months later my business plan was up to scratch and I got the money I needed. It didn’t end there though – I got lots of training and support from the Prince's Trust when I first started.

Was there anything you would do differently now?

Yes – never ever ever (ever) go into partnership with someone on a 50/50 basis without a shareholders agreement in place. I nearly lost everything by doing that in the early days.

What was your strategy at launch, and have you stuck to it?

When we started KashFlow, the plan was to target small business owners directly with the angle that it is “accounting software designed for you, not your accountant”. This really didn’t work well.

Although people want software they can use, the message we were giving implied their accountants wouldn’t like it. It’s also very difficult to market to SMEs as their so scattered across different industries.

So we decided to develop a product for accountants to be able to buy, rebrand and resell our software whilst getting a raft of benefits for themselves. This channel now makes up over 50% of our revenues.

What’s been your biggest hurdle or stumbling block so far?

The two big problems we had in the early days were lack of credibility (Kash who?) and a lack of funds. We needed to be seen as a credible and stable business to be taken seriously by others and we needed a reasonable amount of money to be able to get a foothold in the market.

…And your luckiest moment?

Both of the above problems were sorted out by one lucky encounter. I was asked to speak at the opening of a Business Incubator unit in Hackney where I’d first started the business.

The official opening was being performed by Alan Sugar and I was to be interviewed on stage by Lord Young – a former Secretary of State for Trade and Industry and former chairman of Cable & Wireless.

We spoke briefly before the interview and he said in a very of- hand and casual manner “If you ever need investment, let me know.” So I did.

Initially he invested in the company and was just a silent shareholder. When the business began to really take of he joined the board as chairman.

Where are you now with the business?

We’ve had an amazing couple of years. Last year we won the award for the best web-based accounting software. It was a niche category but it was very nice to win it.

This year however we won the main category of Small Business Accounting Software – beating all of the established names in the industry. The awards are decided by a survey of actual users of the various products, rather than by a panel of “experts” so it meant a lot to us to win.

The survey also revealed that we had a whopping 70% of the UK market for online accounting software.

Before I met Lord Young, when I really needed the investment, nobody wanted to know. Already this month I’ve had three American VC firms get in touch. It’s nice to be able to say “no thanks, we don’t need it now.”

What does the future have in store?

At the moment I’m really enjoying building the business. No doubt there will come a time when I receive an irresistible offer. If the timing is right, and I’m confident the new owners will look after our customers in the way they’re used to, then I’ll probably take it.

I don’t see myself just doing this for the rest of my life. There are too many other business opportunities out there to be exploited.

What’s your best piece of advice for someone who’s about to start a business?

Stop waiting for all the lights to be green. Too many people seem to wait for everything to be in place before they make the leap into starting a business.

If you’re driving from London to Manchester you don’t wait for all the traffic lights along the route to turn green first. The sooner you start, the sooner you’ll get where you want to be.

www.kashflow.co.uk

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By LaunchLab.co.uk  on   Nov 28,2008

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Keywords

starting a business    cash-flow    Prince's Trust    accountants    software    websites    funding   

Comments

Mark (i234i - UKBF)
Nice read there Duane, just found this site from your Kashflow blog on UKBF sig. Report Abuse