#5 things they never tell you when starting a new business
By Nial Adams, Author of Make Marketing Work.
Starting a new business? These top tips will help you:
It’s heartening to read and hear that the entrepreneurial spirit of this ‘insignificant little country’ is alive and kicking. Recent reports suggest that up to 40,000 new businesses were set up in the UK last month and the suggestion is that by the end of 2013 there will be a staggering 500,000 new businesses born.
Of course the big question is; will they survive?
I set up my very first business at the age of 19 and went on to run this for a total of eight years. It was a very strange entry to business life and I was completely wet behind the ears. I’d never even worked in another company, so I had no real idea how business was actually done.
I duly signed up for the Enterprise Allowance Scheme (you might remember it) and collected my £40 per week!
The money had no interest and let’s be honest, it wasn’t exactly going to take me to the moon and back. What did interest me was the training and business courses I was promised. I was also given a mentor. With this sort of help I couldn’t possibly go wrong… could I?
Well, without wishing to bash the system too much let’s just say that the training was dire and very little use at all. My ‘mentor’ was even worse; quite frankly a rather nasty piece of work who seemed to take great delight in telling me that my business idea was crazy, nobody would buy my services and that I probably had zero chance of making it.
Like I say, that business lasted eight years and took me across the UK, to the US and eventually even to set up a company in Moscow. Perhaps I was just stubborn and for sure I learned the hard way but in the end I succeed and learned from others.
Over the past few years (OK, quite a few years) I’ve learned a great deal about being in business and what it really takes to run a start-up venture or enterprise. I’ve helped a very large number of them and continue to do so. Thankfully today there is a wealth of resource available to those who want to start their own business.
…and let’s not forget, when I started my business nobody had even heard of the Internet… because it wasn’t invented. How times have changed.
So, whether you’re a young person, starting a new business, with little or no business awareness, or if you’re someone of later years, perhaps setting out on the path of self-employment for the first time, what do you need to know? And more to point what are the things that they don’t tell you?
Here are my 5 Top Tips:
Tip #1. A good idea is not enough – There’s a pervasive myth that anyone with a good idea and lots of passion can make it in business. This simply isn’t true and is a dangerous myth to believe. Sure, there have been some amazing success stories of people who made their millions on one great idea and lots of luck or good fortune.
…maybe you do make your own luck (a subject for another day) and hard work creates opportunity but a good idea is simply not enough these days. You also need to know how to build a business and Marketing is at the core of that business.
Just because you think it’s a great idea and all your pals down the pub also think so (especially as it’s your round), it doesn’t mean anyone else is going to buy it. A good product or service is only a starting point, it is NOT a business. You need to learn how to create a compelling offer or proposition and take it to market in an effective an profitable way. You need a business structure.
You also need Core Business Knowledge. If you are serious about making your next (or first) startup business a huge success then you need to learn the rules of the game and how to deal with those who bend and break them.
Far too many great ideas have been kicked to the curb because the new business owner just hasn’t had enough know-how, skill or experience to fight a way through. Of course the question is how can you have experience when you’ve not had the chance to gain any?
Tip #2. Input doesn’t count, output does – This is especially important if you’re starting a new business after spending a long time in employment. All too often employed positions are measure by the hours you work each day and how much effort you put in.
Unless you’re in Sales, where the only real measure is what you’ve sold each month, this idea of measuring value by effort expended doesn’t work in the world of the self-employed business.
If you want to maximise your efforts from being self-employed remember that there’s no safety net. Nobody is going to pay you just for being busy (or just looking busy).
The only thing that counts is what you actually produce. It’s all about your output and this is where you need to focus.
When starting a new business you need to make a big mental shift; you need to understand that running your own business is about making money and ensuring that your enterprise is profitable.
You will, almost certainly work a lot of hours in your business. Self-employed people tend, on average, to work far more hours than the average employee, something you will probably need to get used to in the first few months and years.
What really matters though is what your output is. This is where you need to get smart. There are no prizes for making a task hard work or doing it the tough way. Again, as you’ll read in Tip #5 you need to learn to ‘cheat’ and take (appropriate) shortcuts wherever possible.
Tip #3. You can’t be an island – no matter how great you are you’re fooling yourself if you think you can do it all yourself. One of the best things you can do in business is follow the ideas, concepts and methods that others have used to become successful.
Maybe you’ve heard the expression; ‘success leaves tracks’. So you need to watch and learn from others. See how others in your industry or sector are running their business and if you know it’s working for them, copy and model your business on it.
Likewise, ask for help where you need it. Again, if you’re new to business then the chances are you don’t have all the experience you will need. You may have areas of strength, your product knowledge for example, and areas of weakness too. Statistically the two main areas of weakness for those new in business (and a many who have been around a long time) are finance and marketing.
If you struggle with figures get this sorted out. Factor in a cost for the business to get good help. An experienced and diligent bookkeeper can be a major asset. Knowing that someone is keeping an eye on the money is a real comfort, so choose your accountant and bookkeeper well.
At the same time remember that it is your business and knowing your figures and what is actually going on in your business is going to be crucial, even if that means you don’t need to spend hours creating spread-sheets or entering receipts.
Tip #4. Think long-term, plan short-term – One of the many important things that my own Mentor taught me was that “most people over-anticipate the short-term and under-anticipate the long-term”. I now know just how true this is.
Too many people make the mistake of believing that by turning self-employed, or starting their own business, they will soon be lying on a beach wondering what to spend all their money on.
Very, very few self-employed people ever enjoy this scenario quickly!
The chances are that you’ll work damn hard for several years, becoming increasingly successful and then one day in the future you’ll realise that you have created something quite special, something that makes you financially wealthy. And that’s when you get to book those holidays and reap the just rewards that you’ve earned.
So the point here is that don’t place too many expectations on the short-term but don’t forget that your business can be a path to the life you want to live. Keep going and accept that there will be challenges along the way; they’re all part of the journey!
Your planning and focus on the other hand needs to be focused in short bursts. I was taught to model business on a 90-day plan and recommend this to my clients. It’s a great way of getting your focus where it needs to be and getting you motivated. So plan short-term, enjoy the rewards over the long-term.
Tip #5. Cheat your way to success – At school we’re taught that cheating is wrong, very wrong. In business you have one main goal; to get to profit as fast as you can and build on solid ground. If you think you’re going to work it all out for yourself then I wish you well.
However, I’d much rather encourage you to find the shortcuts, and there are many.
Of course there are laws governing business, data, intellectual property, etc. All of which should be obeyed. Then there are good business ethics. Being honest and ethical in business is not only a good idea, it will make you more money, in the long term, than tricking, lying and conning people.
What you are at liberty to do though is find ways to get to better results faster and you can do this any way you wish. This is one point that so many people miss when starting a new business.
The first way you can do this is to copy others who are already getting it right. Find out how they are working and don’t be afraid to model elements of your business on them. They may not like you for it and they may even be annoyed, or perhaps feel threatened. But if someone has already worked out a better way of doing something there’s nothing heroic about making it hard for yourself.
Famously when Richard Branson decided to set up Virgin Airlines he spoke with Sir Freddie Laker (of the failed Laker Airlines). He took advice and learned how the game was played, what dirty tricks the opposition would pull on him and how to stay one step ahead.
…with this knowledge Virgin beat the competition and Sir Freddie got to smile about it!
My key point is this; don’t believe that you need to waste years of trial and error and lots of cash working out how to do everything. Look around you and research your business, how others work and most of all what customers really want.
Get your skill-set up and focus on learning the things that are going to directly improve your bottom line. Like marketing!
I hope these tips have been an insight for you and if you are setting out on a mission to build your first business let me say I take my hat off to you.
Welcome, I hope we get to share a little of that journey together.
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