Did you know that in the UK we start-up more businesses a year than they do in the USA?
That might surprise the cynical among us.
What’s less surprising (perhaps this is the cynical in me) is that the failure rate of new businesses in the UK is considerably higher than it is in the USA.
Why do you think that might be?
Peter Cochrane OBE told me that one of main differences between UK and US start-ups is that in the UK we tend to start businesses with the ambition of paying off the mortgage. In the US they tend to start a business with full and certain knowledge they can go global!
It’s certainly true that in the UK and in between “booms”, being a start-up doesn’t have much cache, people don’t look at you like you could be the next Zuckerberg or Gates and saying that you aim to be is likely to get you laughed out of the boardroom. Of course, retrospectively people always refer (somewhat jealously) to the” gutsy start-up” that ends up selling out for £ Billions but at the time, in the beginning, being at ground zero, with a good idea, lots of energy and not much cash can be a very tough, lonely and scary place to be.
It needs to be, it’s getting through the tough bits, the pits of despair and doom, the worry about mortgage payments and the constant challenge of selling the first few deals. It’s that “thin-lipped” “positive” smile that all your friends and family give you that which says “you’re either a brave genius or a complete idiot and I’m pretty sure which!” and the new levels of multi-tasking you can’t believe you can achieve and the hours in the day you didn’t know existed. It’s the sleepless nights (for good and bad reasons) the “if only I had ten grand” constant need for the next bit of IT or design or copy or expertise and the feeling that this stage will never, ever end that makes the start-ups that succeed, succeed.
There’s no pretending it’s a pretty, glamorous or always a terribly happy ride….but every obstacle you overcome, every knock-back you move on from and every new skill you struggle to learn feels like an Olympic achievement. And it is.
That’s why those of us who have done it (and continue to do it) get on such a high about it and end up loving and eventually even enjoying the roller coaster ride that it always is.
And so for those taking the first step or wondering if they could…here are a few things which might just take a few of hurdles out of your way…
1. It WILL take longer than you expect it to. Even if you see early success, once you’re past the first flush of “wins” you WILL move in to a phase of reality where you need more than luck and passion and your last employer to buy from you. So plan for the first 12 months not the first 12 weeks.
2. You WILL find lots of “Jam tomorrow” deals. There will be plenty of people who will want you to work for nothing and will pay you later. Remember Jam tomorrow is fine…but you need “Bread/Dough” today.
* Possibly the most useful lesson to remember here is: Turnover is vanity, profit is sanity but CASH is KING!
3. You WON’T believe how many “woodland folk” come out of the mists once they spot you’ve got a great idea. They will be all sorts of useless, dangerous, “predators”, who will offer their services for a share of your business or your IP. Don’t fall for it. If they look like they need a new suit it’s because they can’t afford one. Guard your business and your IP with your life. Better to pay for advice than to give away your family silver to an idiot who will bleed you dry and leave you high and dry too. If you get approached, ask around. You’ll soon hear the truth.
* As a successful entrepreneur and a good friend of mine once advised – “If there’s any doubt, there’s no doubt” – live by that.
4. You SHOULD spend more time on understanding your customers and the proposition you’re taking to them than anything else. If you can’t differentiate and stay differentiated it’s only a matter of time before you’re priced out of the market.
5. You CAN get good, free advice from professionals whiling to give the first meeting for free. I am one of them and I know of an accountant and least one designer who are others. Finding out your options in terms of LTD, LLP etc and the likely costs and timeframes is invaluable. Seek out good solid advice . Don’t be afraid to ask. For my first business, I traded a Pint of Guinness and a Fish Finger sandwich for an hour’s time with a chartered accountant. It was money well “invested”. He’s now FD on all my businesses.
6. You DON’T Need flash offices, you do need well written and well presented collateral, material or branded..things. You can find good designers who’ll do you a deal on spreading the costs and there a plenty of on-line packages. Don’t skimp here. In 2012, no one cares if you don’t have a posh office and 250 staff. They do care if you can’t spell, they can’t understand what you’re proposing or if it looks like you slung your website together with a book and a CD package you bought at car boot sale.
7. USE technology. Skype is great. It means free phone calls and conference calls. Use Twitter and WordPress and other online free and easy to use tools.
8. DON’T plan your business based on today. Plan for what you want it to be tomorrow. That means be careful. It’s very easy to end up with a mill-stone that sees you working harder than you ever have before, for less money than you could earn in a job and taking more risk that you ever planned for. I recommend E-Myth revisited “Why most small businesses don’t work” by Michael Gerber for making sure you avoid this pitfall on day one!
9. DON’T expect the bank to loan you any money unless you’re prepared to put your house up. It’s not that they don’t want to lend they just don’t have the processes to loan to anyone other than those who don’t need it.
10. DON’T aim low. There’s only one way to go from there. Take a leaf out of the book of the USA. Think bigger than you dare and go for it.
I’ll be writing a lot more about start-ups and my experiences both of owning them and working with them. If you’d like to hear more then please subscribe.
It won’t surprise you that I’m happy to discuss how I can help you with your idea too. So if you’re interested drop me a line.
All the best