Starting a business is a great thing. It will challenge you, invigorate you, and reward you but above all it will make you grow. You'll learn new skills, broaden your understanding of business and give you experiences that you just wont get as part of a large organisation.
Thats why whenever someone says to me they want to start a business I say "Great, how can I help". I think its some thing that everyone should do at some point, even if they end up saying that they dont like it and go back to employment, at least you will have had the experience and know what its like to be the person where the buck stops.
Having said to yourself that you want to start your own business its important to understand why you want to. Many people will think that this is obvious "to make money" but often that is not the case. A lot of people do it for things like flexibility, independence, creativity, autonomy, and yes sometimes because it could make them very wealthy. All Im saying is that make sure that you understand exactly why you are doing it and if there is more than one of you involved then write it down for each person so you know what everyone wants. If they vary wildly then stop right now before you go any further, it will save a lot of pain and suffering in the long run.
So, you know for sure you want to start a business and why, the next question is how. It can feel daunting especially when all the information you come across talks about company formations, taxation and oh yes the dreaded business plan. Now dont get me wrong, understanding what you want and how you are going to achieve it is vital but spending three months writing a vast piece of fiction to satisfy you local bank manager is a complete waste of time. It will sit on the shelf gathering dust and do nothing proactive to grow your business. Just write a short list of the key stages of your businesses development and then include a brief description of the tasks you need to complete for each stage. Youll end up with a document that youll be able to look at once a week to make sure youre going in the right direction and be able to change it quickly as you refine your business model.
Now youll be saying "but if I dont do the business plan how will I raise the money I need? Ok, well lets look at this, what are the sources of money? The first place is You – savings, credit cards, mortgage, overdrafts – youll be surprised how much you can raise that way. You could include friends and family but I think thats a very brave move. The second is Venture Capitalists but theyll only want to talk to you if you have the right business background, want to borrow over £5m and can show them an "exit strategy" in about 5 years time. Angel Investors will be easier to pitch to and can be a lot more commercial but finding them can be tricky and remember they will want a large piece of the profits. Finally, your local bank, "back to the business plan" I hear you say but hold on a moment there is another way of doing things. Instead of going to the bank manager cap in hand why not go from a position of strength. Why not start the conversation with "Heres a cheque from a customer and I need to deposit it". Youll immediately have their attention and the relationship will go in a completely different direction. So how do you win youre first orders before youve set up the business?
I want to mention what most people think of as a dirty word – selling. Yes I said it, Im sorry if this offends you but everything in business is about selling. Yes I really did say that. Now all those people whove worked in HR, accounts, production, marketing, administration, you name it, will get upset at this point but if you talk to any business person they will say one thing "If you dont sell anything you dont have a business". I once was asked to help someone who had written a business plan, signed a lease on a building, stocked it to the gunwales but hadnt worked out how he was going to sell anything. He thought selling was something you tacked on the end after you did all the "important" things.
When I start a business the first thing I do is start selling. I go out into the market place and talk to potential customers, suppliers, business partners, the lot. Before Ive spent a single penny I know whether there is actually a need for the product or service, whos already in the market place and who may be able to help me. So often people develop a product and then try and sell it, only to find that nobody wants it or that its already being supplied at a higher quality and/or lower cost. Surely its better to identify a need or gap in the market and then try and fill it.
"But I dont want to give my idea away", I here you say. Well there are a couple of points about this. If your idea is really that unique then are you really sure that there is a viable business in it. If you want to set up a hairdressers then you can be pretty sure that its a viable business model as people have been making money at it for years, you just need to make sure youre doing it better than everyone else. Otherwise youre into the area of patents and legal protection that I believe is a nightmare scenario for anyone starting a business – just dont go there!
So you know you have a viable business, you might even have your first order, what next. "I guess I best get down to Companies House and form a company, right?" No. Im not a lawyer or an accountant, I dont want to be, I want to focus on the things that Im good at, so I pay someone to do it for me. In my case I get my accountant to do it, hell form the company, open the bank account and send the documents to me. Theyll be done promptly, accurately and will not be distracting me from doing what I should be – yes you guessed it, selling.
I take this approach with many things in the business, I know what Im good at and what I should be focusing on and I make sure that nothing takes my time away from it. Its easy to say, "if I do it myself it will save me some money" but thats not a business person talking. Dont do things that youre not good at, find someone who is good at them and pay them.
Hopefully by now you will realise that these ideas are not particularly revolutionary, in fact they are pretty simple, but that is the whole point, business is simple. Focus on keeping your customers happy, doing what they want and need, keeping your costs down, add value whenever you can, and oh yes, have fun doing it.
Â© Cross Media Publishing
Alan Atterbury has a unique blend of technology, business and sales skills gained from a career covering engineering, research, publishing and technology. Cross Media Publishing was formed in 1996 at the start of the internet and electronic media revolution and has built a customer base consisting of publishers, financial institutions and corporates as well as fledgling businesses and SMEs.
CMP Technology was formed as a result of customers asking for professional computer management services but has more recently grown to include IP based telephony and security systems.
CMP Insight was started to provide business consultancy services including project management and business development.
Tel : 01932 888864
CMP Insight, Cross Media Publishing and CMP Technology are divisions of FTS services Ltd. Company registration number 3156718 Registered address: 354 London Road, Mitcham, Surrey, UK.