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At its simplest a Portfolio Executive is spending their time being a part-time head of or part-time director for a portfolio of businesses. In essence what they are doing is acting as part-time employees for each of those businesses. So, portfolio sustainable independence career future focus change opportunity network relationship
The answer to this in my view is ‘No’, followed by ‘Yes’!
When the answer is ‘No’
The ‘No’ is you do not have to buy into the idea that you are going to recruit lots of staff, have an office, an extraordinary website, develop lots of products and build up something that has got hundreds and thousands, even millions, of pounds worth of turnover.
So, whatever you think a business is, if that’s your image of a business, then ‘No’, you do not have to build a business.
On the other hand, if you box yourself in and just see yourself as a part-time freelancer, a gun for hire, I think you will have very limited success, because there are some essential business disciplines that you have to adopt.
But the answer is ‘Yes’
This is not about what legal entity you need to trade, with evolving tax law around IR35 and Corporation Tax and self-employment, limited liabilities partnerships. There are all sorts of choices there.
The most important thing is to move from the idea that just by showing up, people are going to pay you for access to your skills, knowledge and experience. You are not applying for a job already created for you to fill. You have to take a value proposition to the CEO who will become your client. A value proposition must identify a problem, the value of solving the problem and the solution.
You have to see yourself as having a product (yourself), that product has got features (your skills, your knowledge, your experience) and, most importantly has a value proposition. What that value proposition is will vary from one client to another. You need to ask yourself who your target market is for the product, package or service you offer. This is business thinking. This is not career thinking or job application thinking.
Your target market
Your target market is going to be that ‘Goldilocks’ company that is not too big, not too small. Too big and they will need a full-time person in the role. Too small and they will not be ready to commit to a “Head of” in that function. You will find that ‘Goldilocks’ size partly through intuition but mainly through going out and testing the market. You are marketing; you are selling; you are engaging in product and service definition. Those are aspects of running a business.
Don’t over invest too early
What about all the other things that you see modern businesses doing? Do you need a website? Certainly not straight away. I would strongly recommend that you buy a URL (a web address). I would strongly recommend that you use a company page on LinkedIn and have a company email associated with it. Make sure that the company page on LinkedIn represents your offer. Use your LinkedIn profile to present yourself as solving a set of problems for a company. Spending up to £5000 on a website is not necessary to start with.
Do I need business cards? I think it is not necessary to have business cards when you start. More and more when I got to networking meetings people do not have business cards. When I offer people a business card, they have no business card to give back to me. As an alternative to a business card I get them to give me my mobile number and I text them while we are there, sending my email address to them and invite them to respond. So, now I have their mobile number and the opportunity to have their email address. That is all I need.
Do I need a company telephone line? I don’t think so. More and more people are completely comfortable about using a mobile number. We have not even had a landline in our home for many, many years, just a mobile telephone number.
But what about an accountant?
Do I need an accountant? There is something very reassuring about having an individual who is going to take responsibility at the end of the year to ensure that you are tax compliant. I would strongly recommend that you do have someone who is going to do that for you, but in the early stages of your business the crucial thing is to have a separate bank account, to keep all your receipts and purchases scanned and to issue your invoices. The other thing is to keep track of your business mileage (there are some low cost apps out there).Some challenger banks provide basic book keeping technology as part of the service (check out TIDE or Anna for example). Everything else can wait.
When you appoint your accountant get their advice about VAT registration. I recommend for most people, unless your serving the charity market, get yourself registered for VAT as early as possible upon the formation of your company and registered on a cash basis so that you are not paying out vat for invoices that have been issued but have not yet been paid. You may also qualify for VAT on a gross revenue basis which is the simplest possible way of accounting for VAT, but you may not necessarily, depending on the nature of your business, get the very best rate.
Do I or don’t I need to run a business?
So, do I need to run a business to become a Portfolio Executive? ‘No’. There is no requirement to build a scalable business where the income and number of employers is going to go up year on year. But do you need to think like a businessperson? Absolutely. Do you need to adopt the basic disciplines to ensure that you are legal and tax compliant, so that people can communicate with you and so that you have some kind of professional presence on LinkedIn? Absolutely.
But what if I want to build a business?
Could I build a scalable business? Many portfolio executives at some point do choose to. They recognise that alongside their core offer of Finance Director or Marketing Director or whatever, they can also provide outsourced services that enable their clients to use them as a partially or fully outsourced marketing function or finance function. You can build up a very interesting business that way.
I hope you are now thinking of yourself as a businessperson, wary of investing too much in infrastructure too early and recognising the opportunity, should you choose to, to build a very exciting scalable business.
Charles McLachlan is the founder of FuturePerfect and on a mission to transform the future of work and business. The Portfolio Executive programme is a new initiative to help executives build a sustainable and impactful second-half-career. Creating an alternative future takes imagination, design, organisation and many other thinking skills. Charles is happy to lend them to you.