Money Matters is a new series where we talk to inspiring entrepreneurs about the finance lessons they’ve learned while growing their business.
In our first ever installment, we talk to female entrepreneur Dana Denis-Smith, formerly an international journalist and a Linklaters lawyer, who founded the disruptive legal services business Obelisk Support nearly 10 years ago.
Having grown the business organically with very little help initially in the form of a finance team, Dana talks to us about the importance of recalibration and never taking your eyes off the cash.
Name: Dana Denis-Smith
Company: Obelisk Support
Business proposition: We connect lawyers to businesses to carry out their legal work through our flexible and affordable support services
Why did you decide to get into business? What were you hoping to achieve?
In the market, I wanted to maximise the productivity of ‘our’ people. Lots of lawyers want to work flexibly around their family (or other commitments) but the culture in the legal profession is one of long hours and few promotion opportunities, and so many quit, burn out and become disillusioned.
I wanted to create a business that ‘homeshores’ the work to high quality lawyers, to bring more affordable solutions to businesses by allowing them to work the hours they want, from where they want, in the communities they live in. Good for businesses that don’t have access to affordable legal support but also good for people who want to work differently.
Personally, I was looking to build a business that challenged and developed my leadership potential by scaling really fast. I was excited to have an idea and build a business by merging people with technology, at the very time the legal sector was deregulating. I created an opportunity for new entrants to service businesses.
What makes your business special? What are you most proud of?
Before we came into the market – it’s nearly 10 years now – the concept of women returning to the legal profession, or allowing people to work from home or just redesigning jobs to allow for flexibility were truly pioneering in the legal sector.
I am proud we led a change in the vocabulary around the longer term value of people’s working lives – but the legal profession is still far away from the future of work and trusting its workforce in practice although the language of change is certainly present. I am proud that we have established a strong culture at Obelisk of doing what it says on the tin – legal work that works for clients, the lawyers as well as my team.
What have been the most challenging aspects of running your own business?
For me, people and tech have been the main challenges, but in a good way – growing the team whilst maintaining a good working culture amid high growth which needs to be managed carefully.
Also, tech is expensive and as we are a fully self-funded business, we had to focus on generating income and managing our cash carefully to be able to make investments and stay ahead of the curve.
How did you initially fund the business to get started?
I started the business with £500, which I spent on market research, and no investment. In the first six months I tried to raise angel capital. Everyone thought I had a genius idea and loved it but I was pregnant at the time and they believed I would quit after having my child.
Legal is only now starting to see more significant investment activity, as generally people find it a technical area and difficult to understand how it can make a return on investment – not to mention that it’s overrun by lawyers.
What funding solutions have worked as you’ve grown?
Sales, sales, sales and we took some growth capital from peer-to-peer lenders to build the tech.
What was the worst financial mistake you made in the earlier days? (any close calls with your cashflow?)
It’s the usual mistake that many entrepreneurs make – you are not that disciplined in chasing in debts, as you are too busy generating new business. Then you hit a bottleneck but much operational efficiency comes out of these early mistakes.
How have you managed to alleviate some of those challenges?
Firstly, we recognised just how critical cashflow management is. It’s something we track all the time and try to ensure visibility long-term.
Generally I found that having the discipline to look under the bonnet and recalibrating as needed is really important. Never taking your eyes off the cash – you know what they say, cash is reality not vanity.
In what ways has managing your finances changed over time?
It has changed significantly. In the first years I was primarily looking after our finances, then we had a part-time finance director. We then hired a really experienced director with an accounting background and now have the finance controller function in house, rather than outsourced.
We are more effective at using our accounting software; we prepare management accounts for the board meetings and discuss them in detail – including our cashflow forecast for the year ahead and deviations that can cause us trouble.
What has been your most significant or expensive purchase for the business and how have you covered the cost of it?
Probably building our tech platform was the more expensive investment, as we are generally pretty agile, creative and don’t like spending on frills. We had a combination of bank loans and profit to pay for it.
How confident are you when it comes to forecasting?
I think we try to be close to the sales and also close to the cash; also we have more data points from the past in terms of business seasonality to try to prepare, although that isn’t always repeating year on year.
Where do you plan to be in three years?
We are aiming for global expansion, to go beyond lawyers with our services and also to treble our revenues.
What tips would you share with other business owners to help them keep on top of their finances? And why is it so important?
Cash is everything as without it you are really restricted from executing plans – there’s only so many things that you can get for free.
For me, getting the right kind of finance team in place at the right time is critical and never taking your eyes off the cash.