Top ten tips for entrepreneurs
In October this year we are celebrating ten years of surviving and thriving! I thought it would be a good time to pass on our top ten tips for entrepreneurs that are thinking of starting a new venture.
So here they are in no particular order …
When I first started the business I didn’t see any point to business plans, cash-flow forecasting plans, marketing strategies, etc., because I thought it was tantamount to crystal ball gazing.
Over the last ten years I have come to realise my mistake and we now use a number of these to keep us on track and they provide useful indicators to when things aren’t panning out as you had expected (see our recent article is business planning worth the time and effort or is it like gazing into a crystal ball?)
You’ll only be able to plan when you work on the business, not in the business as this will enable you to focus on the bigger picture.
I know this is a potential repeat of the above point, but cash is king. Cash-flow can bring down successful / profitable companies, just as easily as failing ones. We use our own ERP system to monitor cash on a daily basis, so we know our cash position and can act appropriately.
I am going to throw in credit control here as well, get it right and don’t be afraid to chase up late payers; after all a client that doesn’t pay your bills isn’t a client! Check out The Late Payment of Commercial debts (Interest) Act for more information.
For our business, people are the most important part of the business, so look after them and surround yourself with talented individuals that share your vision. If you need help, don’t be afraid to seek external help in the form of non-executive directors, mentors and business coaches, they will prove invaluable.
We have used a business coach in the past (Jeremy Marchant) and have been lucky enough to work with Darryl Bates-Brownsword who has been an invaluable support.
Systems don’t have to be computer based, a lesson we have learnt is that unless you have processes and procedures in place it is very difficult to grow the business and replicate successful behaviour.
Having said that, once these are in place you should consider how you can become more efficient. As you grow your business you’ll become time poor so you need the systems in place to take care of the repetitive, labour intense tasks (see our article invest in the un-sexy back-end systems). We practice what we preach and developed our own ERP system in 2006 and have never looked back. The wealth of Business Intelligence (BI) we can gather on a daily basis enables us to make informed decisions based on facts and not just assumptions and / or guess work!
Never be afraid to walk away if it doesn’t feel right, trust your gut instincts as they will often be right. Reaching for the the door is also one of the most powerful sales tools and always remember that business is emotional. The scariest sales trainer I have ever come across is Marcus Cauchi, but he tells it as it is and I listened (although he would argue I didn’t!)
Several years ago I asked what the difference was between sales and marketing; the best answer I ever got was this: –
How many businesses could potentially use your product / services and what percentage know about you – for most of us it will be 0.0000001 % – marketing is about increasing that percentage, where as sales is about closing!
These days businesses have so many opportunities to market themselves through the internet, but don’t forget people buy off people so network whenever possible. It also helps if you go for a niche market, you’ll find it far easier to explain to people what you do! Here is a useful crib sheet for helping you create an elevator pitch that NRG Business Networks created that they refer to as an aide memoir.
It is worth reading Staring in the face of adversity – some tips for surviving the recession, especially the ten points under the lessons learned.
It is important is know your limits as an individual and a business; over-trading is a serious threat to any business and one you should be cautious of. It is also important to never over extend yourself and rely on one or two major clients, as the old adage goes too many eggs in one basket …
Capacity plans are a great tool for working out when to expand and help you determine your most profitable operating size as most business models have sweet spots. You will often find that there are stages within your growth, where profits will be squeezed and know where these are can help you plan.
Dare to be different and NEVER compete on price as there will always be someone cheaper than you! If the market goes one way, consider going in the opposite direction and don’t sit in the middle!
Here is a list worth reviewing that I was recently sent: –
Be more expensive than your competitors. Aim for a niche market. Be unique and know your Unique Selling Point (USP). Avoid brand extension. Avoid generic names when thinking about your brand. Try to stick to two syllables (är
r). Focus on organic growth, rather than expensive marketing campaigns. Avoid putting your brand on product outside your core business. Reverse your tag line and see if it works. Remember, perpetual growth is impossible (see know your limits / capacity). Positioning is everything!
Positioning is a massive topic and I wrote an article – Positioning, the art of being different! – last year about the subject.
I never quite understood branding until I met Phil Parr. Read his book Step away from the crayons and you should have a great head start. Brand is about so much more than your logo (see list above)!
I have had moments of doubt (we all do) but as my son said to me once if it was easy everyone would do it! Before you head down the road of running your own business make sure that your family and friends are behind you, you’ll need them.
I have thoroughly enjoyed the last ten years, the highs more than make up for the lows and I have met some fantastic people and travelled the length and breadth of the United Kingdom and further abroad (Ireland, France, Germany and Greece).
I wish someone had told me the following, before I started down this road: –
Most small businesses fail within the first six months. It will take you three years to become profitable. After five years, you have a business worth fighting for. Only 10% of businesses make it to ten years!
Good luck and hope you enjoy the experience as much as I have.
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