Just about everybody has a good business idea so why don’t they always happen? It is the fear of failure that stops us from following through with ideas. More often than not, peers will dissuade you by pointing out why it won’t work rather than being supportive. They’ll say things like, ‘Don’t waste all the time and money you spent at uni getting a qualification’ or ‘You have commitments if it fails, you’ll lose the lot!’ My advice, ignore them!
If everyone were to think this way then we wouldn’t have any successful start-ups or entrepreneurs disrupting the market with their innovative thinking.
What makes a good business idea?
Remember it doesn’t have to be unique. Most things have already been thought of or invented, it’s more about finding a good idea and looking for ways it can be improved or tailored.
Take the time to find out what pain points current customers or users experience and work out how to eliminate them.
Partners: A major consideration
In the beginning we like to involve friends because it helps with the validation process but beware and trust your gut instincts as they will almost certainly prove intuitively correct, sometimes when it’s too late. I would shy away from involving friends too much though, as it’s hard to know if they will be as committed as you are or what their work ethic is like. However it is important to seek out mentors or trusted bodies who can help you on your journey and provide balanced, insightful advice.
Recruitment is something that takes time and something you need to get right. If this isn’t done properly the recruitment quality, process and output is poor, resulting in a lost customer and possibly their peers. HR may seem like a stretch initially but could be getting the help of a HR consultant could make a real difference to the business.
It’s important to have good financial management from day one.
If you decide to engage an accountant, they should provide sound business advice, add value and not just complete your tax compliance but know your business inside and out. They’ll also be able to recommend the best tools for you to manage finances on a daily basis.
If you want to succeed this is something you’ll need to live and breathe. Provide your customers with a product that you and your team are genuinely proud of at a reasonable and justifiable price, and that doesn’t mean cheap. Then be there for them. If you screw up, fess up and make it right, no excuses.
It is really important to understand your customer, their habits, their frustrations, so that you can mitigate any issues as quickly as possible.
Sales & marketing
Here is where you build that barrier to entry. So many start-ups have an innovative product, with beautifully presented marketing material and ads sending them broke, when what they’re avoiding is getting out there and making a sale.
It is demoralising but if you want to succeed and beat the competition, it is essential and until you have momentum, nobody will do it like you.
Whether it is through making calls, offering discounts or booking appointments, early sales can make or break you.
Find a like-minded expert to provide creative, cost-effective guidance on how to get your product or service in front of the right people. And don’t forget to stick to your budget.
Time-consuming, expensive, focus diluting and demoralising – these are a few of the upsides to this pursuit! The process of fund-raising invariably starts too late, takes longer than you anticipate and often falls at the very last hurdle and you have to start all over again. Get ready for it.
If you have good financial management in place, it will alert you to the need for funding before you actually need it and give you a clear idea of your worth. Ultimately, making the due diligence process quick and believable will give you a stronger negotiating positioning.
Your business will consume you and so it should. You will eat, sleep and breathe this baby every day and night, especially if it is home based but you must try to find balance or risk the loss of friends and family. Plan breaks, book and pay for tickets, go away and disconnect. Stay healthy, eat well, exercise and party hard.
But there’s no harm in using your time to socialise and make connections. In the early days, you are your business, so everyone you meet could be a potential customer, client, supplier or investor.
It is easy to loath your competitors but this means you are in a viable category that they’re trying to expand. If you focus on their achievements you will learn something, if you focus on their failures, it may feel good but you learn very little. Focus on your goals and make sure you achieve them.
Knowing when to step aside
Most entrepreneurs are ideas people and dreamers but often struggle at execution. From day one be on the lookout for people who can do it so much better than you can and empower them to do it. The tendency is to feel that nobody will know your business or do things as well as you do but you simply cannot be good at everything. Find talent who can take on the stuff you struggle with, be it financial management, logistics, IT, marketing, sales or even general management. Step out of the way and watch your life balance return.
There are no successful business people who got there without huge dollops of luck. Acknowledge it, appreciate it, but never expect it.
Most prolific entrepreneurs learned everything above by making the classic mistakes in every category. Be aware that no matter how successful you are, you will never be completely out of the woods. Market disruption will see to that…
Mark Woolley is commercial director at Reckon.
Further reading on entrepreneurship
Nominations are now open for the British Small Business Awards 2017, the leading event celebrating the brightest stars in the SME sector. Click here to enter, and make sure you get involved today on social media using the hashtag #BSBAwards. Good luck!