The UK’s start up scene is thriving. The ONS reports record numbers becoming their own boss and the economy has come to rely on the thousands of entrepreneurs whose businesses shoulder 99 per cent of the private sector.
This is great news for the UK, but few of our entrepreneurs would argue that they don’t need to continue learning, and one of the best places for inspiration is to look at how counterparts function in other markets.
The US is an excellent example. It’s long been a hotbed of innovation, and thanks to all the tech start-ups coming out of Silicon Valley, it’s synonymous with young, fast-growing and successful businesses.
So, if we’re to see more start-up success stories in the UK, what can we learn from the experience and learnings of our US counterparts?
Business confidence
Silicon Valley’s ‘fail fast’ culture has been well-documented. The idea is that experience of failing within a business helps an entrepreneur understand what it takes to succeed.
Failing isn’t easy to stomach, and any successful entrepreneur needs to have the confidence, tenacity and agility to go back to the drawing board again (and potentially again and again).
Over here, however, we tend to be a lot more conservative; in fact it’s been suggested we have an acute fear of failure.
But UK SMEs perhaps need to develop less of an aversion to risk. The business-minded, often bullish, culture of the Valley is something that UK start-ups should try to engrain within their own organisations to ensure they have the self-assurance to keep going when times are tough.
Financial backing
Once an idea is nailed down, a business needs the financial backing to propel it forward. Traditionally, US banks lend based on an individual’s credit rating rather than that of a business.
This means it can be very difficult for new SMEs to borrow a significant amount of money.
This roadblock has forced many US entrepreneurs to form a solid financial plan from day one, mapping out exactly how they plan to fund their venture through its lifecycle.
This hasn’t been the case with UK banks – although in fact, it’s now often very difficult for small businesses to get a bank loan.
It means many SMEs have been widening the net and are now looking into alternative sources such as the government’s Funding for Lending scheme, peer-to-peer lending and crowdfunding.
A key learning for UK business owners is to follow the US’ lead by getting a handle on their finances as early as possible.
Poor financial management is often the difference between make or break, with recent research telling us that 44 per cent of SMEs either run out of cash or come very close within the first three years of trading.
Customer is king
Customers get good service in the UK, but in the US expectations are traditionally higher and as a result, tolerance for bad service is extremely low.
With plenty of competitors vying for their attention, customers will simply go elsewhere if service isn’t up to scratch, and crucially, often won’t come back.
Follow in the footsteps of the US by offering the best possible customer service you can. See what kind of customer service your competitors offer – preferably by trying it out for yourself – and then aim to at least equal or ideally better it.
Always remember, if you don’t meet your customers’ expectations, a competitor will.
It’s not a one way street – there are many nuances of British SMEs that US businesses can learn from.
While it’s neither easier nor more difficult to set up shop in either region, it’s valuable for UK business owners to distil learnings from US experiences.
Those that exude a bullish attitude from the beginning, get a hand on their finances early and keep focused on the customer will be most likely to succeed, regardless of where they’re starting their new venture.
Further reading on business in America
