Business news from Duncan
(If you know this, skip to the April 2018 subheading)
First conceived in 2010 when unilateral withdrawal of government funding to help small businesses develop came to an abrupt stop. I started considering how to make practical advice affordable by and available to, the very small businesses I was meeting many who wanted, but were beyond, economic help. This inspired the Runagood® vision that ‘the World’s smallest businesses will be able to afford good business advice’
I gathered together all the techniques that I had developed and taught to 2000 consultants to use on one million small businesses during the previous 22 years that saw UK small business international competitiveness rise from 21st to 7th place.
I gathered up all the data that had been collected from these businesses and created a very big small business performance database and sectored it by industry. I boiled down the 6 key measures that any business must satisfy in order to succeed and developed financial benchmarks for each.
That gave me all the raw material needed. Now I needed to figure out how to operate it so quickly that it would be not only affordable by the smallest business but also profitable for professionals to deliver.
The solution could only be Artificial Intelligence i.e. replacing or reducing the costly human element. But there was nothing readymade. I would have to create unique software and that meant major expense, more than I had. So, I went looking for equity funding. But all the so-called venture capitalists, private equity, business angels, etc weren’t doing what they were writing on their tins. Instead of understanding the opportunity, they fired technical questions at me instead, like “what traction do you have? What’s the runway? Who funded the first round? Where is your proof of concept?” When learning that it was a visionary start-up they glazed over and suggested I come back when I could tick all the above boxes. I protested “when that happens I won’t need you!” They smiled weakly and excused themselves.
Fortunately, I owned 2 London houses and as my children were all successful and my partner of independent means I decided to give it my all by selling one and renting out the other.
I formed a small team of mathematician, software developer and product developer. We developed two very fast and simple tools. The first was Business Dashboard® which asks 19/20 questions and generates an on-screen visual report, and a detailed download, showing the value of any business as it is today and as it could be. Any gaps are explained by 5 performance measures, each benchmarked and showing the quantum of lost sales, profits and productivity. The second was a Forecasting and Planning tool enabling a business owner to model valuation scenarios, then build a plan to achieve the chosen valuation goal.
First test launch 2013
In 2013 we market tested the prototypes with a retail website, gaining 600 small business users and 3 accountant practices. It worked well but became clear that it would need to be administered by professional intermediaries and that we would need to provide readymade solutions that could be implemented online.
This meant a lot more expense, so I tried the (by then) new crowdfunding approach but after a wasted 3 months complying with all its requirements I encountered the same problem of no imagination and risk aversion. This time I also learned that investors don't like B2B propositions. ‘Too hard to understand’ despite by then, the scale of the opportunity being very clear as government research into small business needs was showing 5.5m of them spending a median of £2500 pa on business advice, much of which they rated as unsatisfactory.
In 2015 I remortgaged the remaining property to complete the development project at my own expense, a major rebuild involving the creation of a wholesale website and writing and linking to the software, 250 Business Methods each containing around 20 action plans. Thus commenced a 3 year struggle to build yet more unique technology and integrate it with improved versions of the original work, working early mornings and weekends to do around the ‘day job’.
In 2017 I took on Co-Founders Vini and Colin to get market ready and build a stable team of in-house specialists for marketing, design, development, finance, systems, legal, funding, copywriting, publishing.
Second test launch April 2018
We started with accountants, as they have 50% of all businesses as readymade clients, and yet are in need of more services to sell because technology is making continued inroads into their core business of compliance work. We followed that with consultants, always interested in finding new clients and took the chance of putting the two together. It’s working and we are intent on building a distribution network of 15,000 AI Business Advisor®s (mainly consultants) handling 100+ clients each for £5000-£10000 revenue per month. They will work from 3000 Runagood® Business Centres (mainly accountants), handling new revenue of up to £1m pa and overseeing it all, 300 Area Directors (mainly entrepreneurs), developing Advisors and Centres in their protected territories.
Business Centres and Area Directors will qualify for ordinary shares in Runagood.com Ltd (if you look it up at Companies House please note that the negative net asset value results from uncapitalised development costs, all of which financed by loans from me, the business’s only creditor.)
In a steep learning curve, we have evolved workable marketing strategies through trial and error on the basis of ‘move fast and break things’ and after 6 months the income started to flow with each month 25% higher than the previous month.
I have pursued endorsement with the 20 main business membership bodies by writing real ink on paper letters to their leaders spelling out the business advice revolution that AI Business Advisor® is unleashing. To all, I offered a free Business Dashboard® for all their members providing unique feedback for them about small business performance and needs, asking for a brief meeting. These are gradually taking place and arousing great interest. I have met so far with: Government; Institute of Chartered Accountants; Federation of Small Businesses; BBC (re making a ‘docusoap’); Chartered Institute of Management. And more to come.
We are expecting to become cash positive by mid-2019, which means raising more equity finance for working capital and for product development, having identified a demand for 12 more opportunities to add to the range. In January I will therefore, offer 20% of my ordinary shares for £1m to small business investors in a rolling investment round. These will include Business Centre and Area Director partners who will receive free shares.
Since Runagood® is first in a market worth £11bn pa in UK alone, I’m determined to control it before many imitators arise, as they will. Hence the need to power on!
Thanks for listening!
With my best wishes for a prosperous New Year