The Entrepreneur: Darren Fell, Crunch Accounting
Fell explains how he overcame “huge” backlash from traditional accountants and why, he believes, if you’re not making revenue you don’t have a business
Founder: Darren Fell
Company: Crunch Accounting
Description in one line: Cloud-based accountancy service
Previous companies: Pure360
12 month target: 50% growth
Describe your business model and what makes your business unique:
- Crunch provides a modern, real time accountancy service that puts business owners in control
- It’s a fusion of an accountancy firm and a Software-as-a-Service (SaaS) start-up
- It has the agility, approachability and user-centric mindset of a start-up with the business expertise of an accountancy firm
What is your greatest business achievement to date?
Launching Crunch and helping tens of thousands of small businesses, freelancers and contractors. It’s incredibly rewarding as a business owner to launch a business with the purpose of helping others who want to be business owner.
What numbers do you look at every day in your business?
On the customer service side we look at tickets, average response times and overall customer satisfaction. On the new business side we keep an eye on daily leads, sales and the web traffic.
To what extent does your business trade internationally and what are your plans?
No plans yet – we’re totally focused on the UK micro-business market. Of course it’d be great to take Crunch international one day, but we’re sticking to what we know for now.
Describe your growth funding path:
Primarily funded with cash from sale of my previous company Pure360, with small angel investments from Michael Van Swaaij and Paul Birch. We’ve been really careful to manage our growth so apart from those initial investments we’ve grown under our own steam – we haven’t needed any further outside investment.
What technology has made the biggest difference to your business?
Implementing Salesforce as our CRM has been a journey – it’s such a powerful system that we use it as much more than just a CRM now. The biggest difference has been things we’ve built ourselves though – we’re still (as far as we know) the only accounting system that can do things like generate full Year End accounts instantly.
Another big step was building our own company formations system – we have to form companies for about half of all our new clients and previously we were paying £25 a pop – by building our own system that plugs into Companies House directly we halved that cost instantly.
Wider changes in business technology have also helped our business immeasurably; when we launched on-premises accountancy software was the norm and cloud solutions were just starting to arrive. For the first year or two we had to battle through a lot of scepticism from the market – gradually the market moved and now online systems are the norm.
Where would you like your business to be in three years?
We’re already in the Top 100, and if we continue on our current trajectory we’ll be the biggest firm in our sector by quite a long way in three years, which would be amazing. We’re also looking at other areas of business support and partnering with banks to bring new service to the market specifically to help freelancers and contractors.
We have so many projects on the go it’s really difficult to say where we’ll be in the years service-wise, you have to launch and see what sticks!
What is the hardest thing you have ever done in business?
Launching Crunch by far. There was so much on the line; at one point there were five-figure sums leaving my bank account every month and still no revenue on the horizon. Then, after almost two years of development we launched to a huge backlash from traditional accountants – they really hated us!
Thankfully we overcame the negativity and started taking clients on board at a good rate, and things grew from there.
What was your biggest business mistake?
Working with someone who had an existing business that they still needed to devote lots of time to. When you work closely with someone who is also invested in another business, there can quickly become a conflict of interest that can really jeopardise your position. I’m the kind of person who throws myself into problems at full throttle, so to have someone else who wasn’t as invested (emotionally or financially) created problems for us.
Piece of Red Tape that hampers growth most:
IR35. It’s an incredibly complex bit of legislation around employmen status for freelancers and contractors. It doesn’t directly affect us as a business but it affects about 80% of our clients and obviously, as their accountants, we have to stay up to date with the rules and make sure people are compliant.
It’s such a time sink that it really constricts our clients’ growth – and obviously when our clients grow, so do we.
What is the most common serious mistake you see entrepreneurs make?
Not getting a solid sales engine working before launch. I tell people time and time again – if you’re not generating revenue you don’t have a business. Start-ups like Twitter are hailed as game-changing businesses but it took Twitter about $1bn in venture capital before they made a penny – imagine how powerful you could be as a business if you're focused on revenue generation from the outset.
How will your market look in three years?
Bigger, we think, and much more competitive. There’s a huge boom in self-employment at the moment and it looks set to continue, and more service providers will pop up to look after them. We’re still in a strong position as nobody has been able to replicate our service yet (primarily because it takes so long to build something like Crunch!) but we’re not fooling ourselves that it’ll stay that way.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Launch it – it doesn’t have to be perfect. People sit around waiting for the game-changing idea; the Uber or the Facebook; but realistically that’s never going to happen. If you have an idea you think is good, run with it. Get feedback and tweak as you go.
Crunch was originally going to be just a piece of software; it was only during the development that we realised we needed to go the whole hog and be an accountancy firm too.
My smart home gizmos. I have this dream of being able to control my entire home from my iPhone so I have apps that control my lights and heating and I’m always looking for more smart home stuff. Thankfully my partner Clare is very forgiving of my tinkering and lets me attach new valves to the radiators and things like that!
Executive education or learn it on the job?
Learning on the job – I originally worked in telecoms for about 15 years before leaving to start Pure. That’s not to say I haven’t had some great education from people like our Chairman Michael along the way!
What would make you a better leader?
Better delegation. I like to be involved in every aspect of the business. This is probably a product of setting the whole thing up and being in charge of all of it at one time but I still like to have input in every department. We hired some fantastically talented department heads last year who are trying their best to put me at ease!
One business app and one personal app you can’t do without:
Can I say Omnifocus for both? I use it constantly to record things!
Sir James Dyson’s Against the Odds
You can read more about Crunch in this 2010 Startups 100 index profile.