Key Start Up Advice
So, you want to start your own business? Fed up of your hard work and efforts making other people wealthy? Fearful that if you’re not careful you will reach retirement age without enough wealth to enjoy your retirement? You have an invention that you think can disrupt the market? You see an opportunity to offer a better service than that other guy? Or, you want a better work life balance to spend more time with the family or on the golf course.
It really doesn’t matter what your motivation is, the reality is we have never been in a better time to set up your own business. Technology has made it possible for anybody to do it, however, it isn’t all about the technology. Here are just a few of my personal tips/ considerations before you take the dive.
Research your idea / Market – before you take the leap or invest heaps of money into an idea; do your research! Is there a market? Is there a demand for the product? Be careful with convincing yourself that you can be the next Steve Jobs by dictating the demand through creating a new product. It’s a great story, but almost impossible to replicate. Don’t however, think you have got to find a niche market. You can be successful entering into an already competitive market by having a key point of difference or quite simply being better than the other business. Ultimately though, do your research!
Understand what makes you stressed / anxious – This is critical. Starting a business isn’t the right course of action for everybody! Don’t think that the route to a stress free and happy life is all about earning lots of money. My advice is that you need to be in a good place to even consider this move. The truth is that you probably won’t be able to take a salary from your business for quite a few months. If you get it right and you get a bit of luck then, without a doubt, you can earn significantly more by starting your own business; however, it’s a medium to long road and initially chasing the money shouldn’t be your driver. If you can do it, my advice is to save up to 12 months of income (if you’re lucky you may be made redundant at the right time or you may need to secure some investment) so that you don’t have to worry about paying your bills as you start your business. If you get a little anxious with worrying about where the next paycheque is coming from, then this is essential. If you get super anxious worrying about this, then maybe setting up your own business isn’t for you.
Chase the opportunity and not the cash – Successful businesses are all built on reputation and trust. The contacts you make prior to starting your business as you navigate through the corporate world will become the key to your early revenue. If you act like a “knob head” at work you can kiss that good will good bye. Treat people fairly and consistently and they will remember you and refer your business. You will find that your business will be mostly driven by your contacts and therefore whilst your business is in the first couple of years of its growth chase the opportunity and make the contacts. The cash will come later down the line!
Think like a big business – If you have ambitions to grow your business and ultimately maybe sell it down the line then start thinking like a big business early (within reason). My advice is don’t pretend or try to be an expert in everything. If you are not an accountant, then don’t try and run your finances by yourself on an excel spreadsheet. A good accountant can cost you as little as £80 per month and this is money well spent (www.ajsaccounting.co.uk). Don’t get into a mess with your cash flow and tax returns. This kills more businesses than anything else. I would also utilise one of the excellent online accountancy systems available. I personally use Xero (www.xero.com) and can cost as little as £10 per month. Get your HR policies and procedures in place early (www.harwoodhrsolutions.co.uk). It’s not as expensive as you think and for as little as £50 per month you can have an HR function as competent as a PLC. If you are dealing with customers, then get yourself a CRM system. Again, the market offers many options that will be tailored for various sectors. I use (www.sentle.com). If you don’t get these tools in early then its 100 x more complicated and expensive to introduce them down the line.
Get used to a different way of working – If you have spent your career to date in the corporate world, then you will be used to being accountable Monday to Friday 8am to 10pm (if you’re lucky). When you start a business, nobody is chasing you down and expecting you to be anywhere. This can feel weird and uncomfortable, but you need to adjust quickly. You need to be a good self-starter that is well disciplined. Plan well and use your time effectively. Never has an old school “to do list” been more important. If what you are working on is not helping your business to set up or grow, then don’t do it. You haven’t got space in your diary for “nice to do’s”. On the flip side stop beating yourself up in the early days if you are not productive for 12 hours a day, 5 days a week. It’s a fact that in the first months of set up you will have space in your diary. You can fill this with social media work or networking opportunities, but you will have space. Don’t convince yourself that you are not being as efficient as you were when you worked in corporate world. Just because you were in the office didn’t mean that you were productive. In fact, if you were honest, when you were working at the corporate office you were at best (on average) only 50% productive. Enjoy the opportunity and excitement of growing your business. Before long, you will be fighting to find the time to strategize.
Consider taking on a key employee(s) early – If you are growing a business rather than working as an independent consultant then you will need good people to grow your business. My tip is don’t put the decision to add a support off. Starting and growing a business is tough and can be a lonely place. You will have great days (when you secure a customer) and really bad days (when you don’t get paid on time). It is great to have somebody to bounce off. When one is down the other is positive. Selecting this individual is critical and they will need a reason to join a start-up which from their perspective is a risk. My advice is that you need to secure this individual by selling the longer-term opportunity where they will be rewarded with an equity stake. It goes without saying that if you know and have worked with this individual before then this is ideal!
Get used to not being paid on time – Unfortunately, despite you having payment terms laid out and contracts in place you very rarely get paid on time! If you plan for this then this helps you to manage your cashflow. There are a number of different companies that can help you to manage this however, don’t be surprised by the reluctance to pay and the fact that once a month you become a debt collector!!
Work hard, stay honest and maintain your customer service – If you do this and follow the above advice then you stand more than a fair chance of being a success.
If you require any support, guidance or simply want to make great connections then please contact me at firstname.lastname@example.org.
Author: Duncan Turner