So you’ve had what you think is a brilliant idea for a business and are excited to get stuck into to making your dream become a reality.
Luckily, they’ve sacrificed themselves so you don’t have to. We spoke to three small business owners to find out what not to do and how to avoid doing it.
Read on for advice on how to turn your brand spanking vision into a business vehicle any entrepreneur would like to drive…
DON’T try to do everything yourself
You want to keep costs down in the early days by not hiring extra staff or freelancers but this could end up costing you more in lost business and mistakes.
You need to “know when it’s not a valuable use of your time to complete a task that you’re not well suited to”, explains Lucy Burnford, co-founder of AA Automyze, an digital management assistant for motorists, which launched as Motoriety before a joint venture with the AA: “That’s when it’s a good idea to bring in help. If you’re focusing on the areas in which you add value that’s ultimately best for the business.”
In the early days of launching your business “you’ll be juggling so many things you won’t be able to focus on what is actually making you money and more importantly profit” suggests Anthony Chesworth, founder of e-commerce software provider Ekm.com:
Lee Biggins, founder of £17m-turnover jobs site CV-Library, suggests, “finding a partner or employee who complements your weaknesses”, adding that you should use your knowledge and skills where you can, and hand the other areas over to someone you trust.
DON’T hire too quickly
Don’t let the first piece of advice make you believe you should go on a shopping spree for talent, however. Yes it’s important to get a solid team together, but take the time to find employees who are the right fit for your business.
Burnford says it’s easy to make quick decisions when you’re pushed for time, “but it’s a false economy to rush the proceedings, and it’s much more painful to have to remove a member of staff than it is to spend sufficient time choosing your candidate in the first place”.
Biggins agrees: “Hiring in haste could have serious financial implications further down the line.” He urges you to think about who you need, and how they can grow with the company, as a good team can make or break a start-up.
DON’T overspend on a flashy and expensive office
You don’t need the best of everything at the beginning. Having the outward appearance of a legitimate business does not make you a more legitimate business. Get your priorities right.
Burnford says you should deliberate on whether you need an office at all: “Think long and hard about how much you really need an office. Working remotely and virtually is brilliantly facilitated by online services for video conferencing and free communication software such as Skype.”
Chesworth initially based Ekm out of a small office in an old building in Burnley town centre, which he received for free from his friends. This allowed him to reinvest any profits into marketing and getting more customers – vital to success in the early days of a business.
“It’s understandable to want a flashy and sophisticated office,” accepts Biggins, but those resources could be better spent elsewhere. “Use the money to ensure your start-up is really up and running, and spend on a fancy office later,” he advises – CV-Library is an example of the classic bedroom start-up story.
DON’T launch too late or too early
It’s a tricky balance – good ideas have a history of arriving in the collective consciousness, so don’t be surprised if others are working on similar projects at the same time. But don’t be too much of a perfectionist and be scared of ever actually launching.
“You’ll always feel the pressure to launch: ‘what if someone launches a similar business before I get there?’” asks Burnford But if you go to market before you’re ready you risk seriously undermining your credibility, she warns. Equally, procrastinating can cost you valuable business: “You need to get your business off the ground in order to learn if the market is receptive.”
According to Chesworth: “Launching early or being first to market means you have no-one to learn from and will make all the mistakes.” You should do some research on competitors, learn from what they have done and make sure you do things better, he adds.
Biggins thinks the excitement of launching your first business can cloud your judgement – launching too early “means you run the risk of being unprepared or lacking on quality, whereas launching too late could mean you miss out on the market”.
He adds: “The key is to ensure you’re launching at a pivotal moment for your industry.” CV-Library launched when the internet was just taking off.
DON’T believe in your idea TOO much
Of course you should believe in your idea! But you should also be open to its faults and weaknesses. And yes – there will be some. Sometimes they’re not exposed until you’ve launched and tested the waters.
“When an idea is your ‘baby’ it’s impossible to be truly objective,” suggests Burnford. She advises getting independent appraisals of the concept, business model and financial forecasts. Don’t be afraid to get your colleagues to play devil’s advocate and give you honest feedback on your ideas and decisions – “it’s healthy to be challenged”.
Biggins agrees: “Though you may believe you know what’s best for your business, there may be times when those around you have a different perspective; be sure to listen to them, even if you don’t agree.”
As well as talking to business owners you know, seek the thoughts of peers you’ve never met early on. Online business communities such as Bizcrowd, with around 35,000 members or the Startups forum offer easy ways to crowdsource opinions.
DON’T be afraid to get down and dirty
Yes you’re the boss, but that doesn’t exclude you from getting stuck into the nitty gritty of everyday business. The consummate entrepreneur gets involved in everything from shaking hands on big deals to washing the tea mugs.
“You’ll need to cover everything, from strategic thinking and pitching to top level customers right down to admin,” says Burnford.
“Be prepared to be involved in every aspect of the business,” agrees Biggins. “You’re likely to find yourself putting in the hours during your business’ early days, and you can’t be afraid to get your hands dirty.”
Remember: No job is too small or tedious.
DON’T forget about profit
Easier to do than you might think: once that revenue starts racking up the spinning pound signs in your eyes can easily blind you to the fact that you haven’t yet made up your initial spend.
For Burnford, a healthy profit is important for attracting ongoing investment: “Investors will want to see the hard numbers. So even if they’re small and it’s early in the process, the dial needs to be pointing in the right direction.”
Biggins advises you to look after your profits by keeping a tight eye on invoices to guarantee the business isn’t falling behind on payments, negotiating “hard with suppliers to reduce overheads and secure the best possible deals”.
You’ll have heard it before, but “turnover is vanity, profit is sanity” adds Chesworth.
DON’T go in half-heartedly
Yes it can be scary starting a business, but no-one ever got anywhere by being overly cautious. Learn to assess risk and decide what you’re willing to sacrifice.
“It’s not for the faint hearted, and you should be prepared for the need to pivot your model to keep things afloat and moving in the right direction,” warns Burnford, adding that it’s not just your livelihood but also that of the others who invest or join the team that’s at risk.
Chesworth says you need to believe in what you are doing 100%. This isn’t just for your own benefit. “If you don’t how will your customers believe in what it is you do?”
Biggins agrees on the importance of self-belief: “If you want your start-up to take off, it’s essential you believe in what you’re offering. While it’s wise to be cautious, if you go into your venture half-heartedly, it’s likely to show and could jeopardise its success”.