Category Archives: Starting a business

Do I need a Business Partner?

Business Partners

Business Partners

 

There are few very successful solo entrepreneurs, even well known star entrepreneurs started with partners and having a Business Partner can bring enormous benefits:

 

 

 

  1. Combining key skills. One may be a great engineer, the other a talented marketer. Or there could just be parts of the business that need a specialist area of knowledge.
  2. Bringing in additional sources of funding. Whether it be as equal working partners or simply as a hands-off Investor.
  3. Sharing the workload. For one person to do everything, design the product / service, market, sell and deliver is tough.
  4. Sharing the stress. Having a partner to bounce ideas off and talk about issues can be the difference between success and failure in running a business.
  5. Motivate and encourage. There will be times that having a partner to help you drive the business forward, or to encourage deadlines being met is very helpful.

When taking on a Business Partner it’s best to put together a Business Partner agreement (see Business Partner Agreements ).

 

Is now the right time to start a business? (part 2)

Thinking of starting a businessGiven the turmoil and uncertainty we are going through, it is a valid question. However, change always brings opportunities and you need to consider your circumstances to determine if it is the right time for you:

1. For those made unemployed recently it is a perfect time. Starting your own business is a great alternative to working for someone else.

2. If in an existing job have you got financial commitments that require a steady income? Consider building up your own business at least in terms of planning and establishing potential customers while continuing to do paid work.  Move across as soon as can, don’t leave it too late or it won’t happen.

3. The times we are living through has caused many to re-evaluate what is important to them. Is chasing the dollar in an unenjoyable job what you want to do for the rest of your life? My son-in-law has just given up a well-paid corporate role, with company car, that he hated, to start a gardening company, that he loves.

Running your own business can give satisfaction and a sense of achievement that no other employment can match. You do need to do some planning, but there are resources out there that can help you, see: https://www.companypartners.com/content/resource

 

Adapting to market changes

Business openWith the COVID-19 lockdown easing as vaccination programmes become effective, business is returning to many sectors.

If you haven’t already, now is the time to reassess the way your business operates to take advantage of changing market conditions.

Customers will gravitate towards those businesses that have made it easy for them to buy, collect or simply use services and products.

As an example with the reopening of Pubs & restaurants outside spaces, my family booked to have a meal at a local Pub. They allowed booking through their website, but also answered phone calls, since many might be unsure of how the new procedures worked.

When there, the safety measures were clear and explained by a staff member, who was trained to be friendly and not overly bossy. The owner said they had spent 3 months when empty, building decking and a comfortable outside space. They were now gaining new customers that will continue over into the future.

Customers have had fear and caution engrained into them for 18 months now and that attitude is likely to remain for some time. Adapting your offerings, showing you have the customers protection and interests at heart in a welcoming way, can win you friends and ongoing clients.

Is now a good time to start a business?

Starting a businessAny time of change creates opportunities for new businesses. With the world moving the way it interacts, how it shops and desperate for safe entertainment there will undoubtedly be opportunities for the entrepreneur.

Additionally there are more people who may be in a position to start their own business, having been furloughed or having been made redundant from their employment. Now they may have the time at last to explore these new opportunities. (See Finding Opportunities from Market Changes)

Recent research by Virgin found that:

  • 69% of lockdown entrepreneurs agreed that lockdown gave them the push they needed to start a business
  • 73% of lockdown entrepreneurs said that lockdown has provided them with the perfect opportunity to focus on what they really want from their career
  • 51% of lockdown entrepreneurs agreed that they’d never thought about becoming an entrepreneur before lockdown
  • Flexibility is key for lockdown entrepreneurs. 95% of them said that being able to choose the hours they work is important and 92% said they wanted to spend more time with their family and loved ones
  • 73% of lockdown entrepreneurs are looking to balance profit with purpose and agree that it is important for businesses to do more than just make money

It can be difficult sometimes starting on your own with no one to bounce ideas off and help motivate each other, so do consider finding a potential Business Partner (see How to Choose a Business Partner). Helping to find a Business Partner is the reason we first set up Company Partners, much like a “dating site” for business ideas and people!

 

What Businesses can do while isolated

what businesses can doCoronavirus has impacted businesses in a way that was unthinkable just weeks ago. No business will have planned for this and the smaller ones will be more vulnerable.

I believe though that when we get through this crisis it will be those that have used this period of forced isolation and closure to prepared themselves that will rise fastest and even make gains on competition that have not been proactive.

What you can do:

Secure the business:

  1. Keep safe and don’t be tempted to find ways to get around isolating, Sports Direct have already suffered public condemnation for needlessly trying to stay open.
  2. Ensure any workers are reassured and supported.
  3. Contact your customers to explain your position and what you are doing to support them at this time.
  4. Suspend all costs that it is possible to do so and look carefully at cash-flow for the next few months. Talk to your bank about how they can help you.
  5. The government are bringing in measures seemingly every day that may assist small businesses and hopefully sole traders. Get on top of what assistance you are able to claim. If you have an Accountant, now is the time for them to earn their fee, talk to them.

Plan for the future:

  1. If you could provide goods or services on-line, but haven’t yet explored that option – start looking. Those that already do, see how it can be expanded or made better.
  2. Use this chance to re-examine your business, think about your goals and how you will put in place actions to reach them. Dare I say, now you have time, do a Business Plan.
  3. Some restrictions are likely to be in place for a while, how can your business best operate once the immediate lock-down is lifted.
  4. Consider how the public mind-set may be altered over the next year and find ways of communicating in future marketing a reassurance of working practices and care for your customers. Good PR can come from your good intentions, helping both you and your customers. It’s not cynical, it’s understanding what now is important to potential customers.
  5. Keep positive. Every crisis eventually passes, position yourself for growth when it does.

 

 

The dangers of being a Sole Trader

sole trader danger

There is a hidden danger that many people choosing the Sole Trader route to running a business are not aware of.

Yes, operating as a Sole Trader is certainly the simplest way of running a business. There are no annual accounts to send to Companies House and most can run without needing to pay out for an Accountant.

As a Sole Trader you are basically self-employed and although you will still need to pay personal tax on your income (through self assessment), you have no other legal commitments to worry about -  Except for losing your house, car and any savings you may have.

A Sole Trader is personally liable for all debts, expenses and activity of the business. Which means that if a customer decides to sue the business for any reason, you personally will have to pay solicitors to fight it and if you lose, pay the full sum awarded. In the worse case it might mean you have to sell your home.

If you had been running your business as a  Limited Company, the customer could only sue the company – not you. In this worse case the company may be declared insolvent and have to close.

When you run a business as a Limited Company your personal assets, house and savings are safe. Something to think about when choosing how to run your new business.

See also: Pros & Cons of a Sole Trader or Limited Company

 

Does luck play a part in business success?

Business luckGiven that today is Friday the 13th I thought it interesting to look at the role luck plays in business success.

Firstly it would be wrong to say that luck, or being in the right place at the right time is non-existent – it does happen.  Think of those who bought property in places like London some time ago, never thinking that prices would sky-rocket.

Perhaps simply the luck of meeting just the partner, Investor or contact that you need at absolutely the right time for your fledgling business.

Even starting a new business whilst unbeknownst to you, significant market and trend changes mean that it suddenly becomes a roaring success

However, as the writer Nesta Jojoe Erskine has said, “You don’t get lucky while sitting in the sofa with arms crossed doing nothing. You can be lucky only when you are prepared.”

There is strong evidence that the more you put yourself “out there”, make as many contacts as you can and take positive action, the greater the likelihood of having luck find you.

I recently was reminded of the famous quote by Jack Nicklaus, “The more I practice, the luckier I get”, and the similar “The harder I work, the luckier I get” by Samuel Goldwyn.

Yes sometimes fortune smiles unexpectedly, but most successful people have not sat around waiting for that to happen, they have put themselves in a position through planning and endeavour to allow that lucky break to happen.

See also: Why Businesses don’t Get Started

 

What’s the most important thing in starting a business?

Most important for startups

Actually there are several inter-related aspects of starting a business that need to be worked on to ensure a successful startup, but I consider these to be the most important…

1. Start a business in a subject that you are interested in.

Running a new business is hard work, it becomes a little bit easier, if you at least enjoy or have some attraction to the service, products or activity that is at its centre.

2. Come up with a differentiation for your business from its competitors.

It may be a brand new idea or invention, perhaps a fresh twist on an old idea. The best are disrupters of established markets, such as Uber vs taxis or Airbnb vs hotel rooms.

3. Check your idea for a business is commercial.

It is said that ideas are 10 a penny and not every idea will actually be a commercial success. You must really look hard at whether someone will put their hand in their pocket and pay you money.

4. Get your numbers together.

Finance may not be everybody’s favourite subject, but even a simple listing of costs vs likely selling price will guide you in the viability of the business in the first place and in knowing how to set prices and what you can afford as an expense.

5. Finally, how you implement is key.

The best ideas badly implemented will fail, but even average startups stand a good chance if well implemented.

By implementation I mean think through your supply chain, how you will get your product or service to market, how will you let your potential customers know that you exist, what customer service you need to provide and ensure you have a cash flow that won’t run out before you get enough sales to start making a profit.

 

 

Could the “Experts” be right about Brexit?

Expert on financeIn an alarming development Britons are starting to wonder if the “so called experts” might have something going for them.

We’ve believed for years (well ever since Michael Gove revealed in his Brexit speeches that experts are always wrong) that people who have studied a subject for decades can’t be right.

Tony Simonds, retired Sales Executive said: “The so-called experts are always telling you things are bad for you, and it was only after my second heart attack that I thought their advice about not having deep-fried black pudding for breakfast is probably correct.

“They might be right about smoking too, so I’m going to look into that, although it flies in the face of lots of stories about people who smoked 80 Capstan a day and lived to 100.”

Store Manager Vicky Thompson said: “I’d always assumed experts just liked sounding important.

“However that advice about leaving a safe distance between you and the car in front turned out to be correct. I’ll definitely be telling my friends once the concussion’s worn off.”

The public is now grudgingly accepting that experts may have valid opinions on other subjects, such as patting tigers, swimming far out to sea and even the state of our economy after Brexit

However, Van driver Nick Baker said: “There’s only one sort of experts I trust and that’s UFO experts. Finding out all that highly classified government information takes a lot of work and you have to respect that.”

 

With acknowledgements to thedailymash

 

How to choose the best business partner

Business Partners

Having a business partner that you can bounce ideas off, share the work load and motivate each other is a great help to a young business. 

They should also bring complimentary skills and additional expertise that allows the business to be driven forward faster.

 

 

Sounds perfect doesn’t it? Yet even with all of those boxes ticked, partnerships and businesses can flounder. Here’s how to make sure that your business gets the best from the partners:

 

  1. Mutual respect & compatibility – many businesses have partners who may not want to be best friends, but they do need to get on with each other. You will spend a lot of time together and it should be enjoyable or at the least, not dreaded.
  2. Attitude and work ethics – it often the case that one partner is slightly more flamboyant / extrovert and others perhaps more reserved or technical / financial, but all should share the same attitude towards work.
  3. Company mission & vision – if the partners don’t agree on the basics of what the company is in business to do and where they eventually wish it to end up, then if not at first, certainly later there will be a fallout.
  4. Long term personal vision – coupled to the above, individuals may have differing personal goals. If one is looking for a comfortable lifestyle business and the other seeing it growing to corporate status, or perhaps one partner sees it as a short-term venture, the other as a commitment for life, it’s easy to see how harmful disagreements could happen.
  5. Defining areas of responsibility – stepping on each other’s toes is not only duplicating activity, but at worst will provoke great arguments. It’s easily avoided by defining who is responsible for what and shares the work according to preference and expertise. Best to do right at the start.

Putting together a partnership agreement (here are some agreement tips) will allow you to explore those areas and in documenting the way you will work together avoids misunderstanding.

If in doing so if you realise that there are major differences of expectation you can either work through them, or take the opportunity early to accept that the partnership is not meant to be.