Category Archives: Starting a business

5 ways to be a success this year

1. Work on your brand and image.

Success breeds success and perception is reality. The reason these truisms exist is that they are, well…. true.

What do people think when you communicate with them? Do they want to be a part (either as a customer or an Investor) of your successful and dynamic business? Perhaps you’re not quite there yet, but do all you can to give that image to people.

Branding is often just thought of as logos and letter-heads, a catchy tag-line and corporate colours. It’s easy to get bogged down in working on these and miss a couple quicker paybacks of having your own company email address (it’s not professional for a business to be using gmail/Hotmail) and a simple but high quality business card (the cheap ones are not worth having).

Most businesses now have a website, they’re inexpensive to produce and can instantly be a way of conveying your brand and image, so think about having one well designed. A local web designer can do a far better job than the free sites that come with purchasing a domain name.

For established companies, rethink how you are perceived. Ask customers and importantly potential customers what they think of when your name is mentioned. What do they like, what would they change? Get a pair of fresh eyes to look at you.

2. Give better customer service than your competitors.

Customer Service is now being seen as the number one differentiator in this era of everyone having very competitive pricing.

Good customer service needs to be built into the image of your company; it is a positive brand characteristic and will pay back with repeat business and recommendations.

It also needs to be built into the fabric of your business, from the attitude of yourself and your staff, to the systems that you put in place to support it.

Think of how John Lewis continues to do well, while others fail. Amazon has a great customer service for an on-line company. They’ve made good service a part of who they are.

3. Get help from your peers.

There are people who have already overcome the same problems you have, or may have contacts that you need, or insights into what works and what doesn’t. They can brainstorm ideas and help with strategies.

Where do you find them and isn’t it worrying to give potential competitors information on your business?

This is where you have to choose the make-up of your group wisely; there will be entrepreneurs and businesses that are not competitors but have the same issues as yourself. You can also sign an agreement where you keep each other’s information confidential.

As to where; Mastermind groups (look it up on Google), Network events, local Chambers of Commerce, Small Business Federation, and even banks run such activities for clients. There are also commercially run groups, often catering for executive level participants which provide well organised meetings and coaching, although they do tend to charge quite high membership fees. You could also set up your own group. If you do so, lay out some agreed upon rules.

4. 90% of success is turning up.

Do it. Yes stop prevaricating and do it. Dreaming of starting a business? Thinking that you should look at your costs? Wondering if you should do more PR or marketing? Just do it.

“I have never met the person who went out to do what they really dreamed of, and then regretted it, regardless of whether they later succeeded or failed.
“But I have met many people in later life who wished they had taken more risks to follow their dreams” – Simon Woodruffe (Yo! Sushi)

General George S. Patton: “a good plan violently executed now will be better than a perfect plan next week.”

5. Employ the best people that you can find.

This has constantly been the most given advice when successful entrepreneurs have been asked about lessons learnt.

Now if you are the sole owner of a young business, struggling to cope and having to do everything yourself, you may think that any warm body would be a plus.

However, even then it’s worth getting the best that you can afford at the time, which means investing some time in your choice.

“When picking your team, work with people you like, and give them massive respect.” – Simon Woodruffe. But I would be careful taking on friends, they may not be the best choice for skills and what will happen if goes wrong.

There are of course many more things that you can do to make this the year when your business takes off, but it’s better to focus on a few actions and make them happen, than a lot of possibilities that never get done.

Are you ready for investment?

Being investment ready is key to getting funding. Yet when talking to entrepreneurs they often have not taken the time to think it through.

You are up against a lot of competition for business investment. Some may be better prepared than you to give the potential Investor confidence that his investment will be well spent and payback a healthy return.

So what can you do to be ready for an Investor and how can you give yourself the best chance against the competition?

Business Plan. Okay there is a ton of information on this available, including on this site so I’m not going to go into how to do a plan (see the links below). Just to say that you will benefit from having one:

Putting a plan down on paper forces you to think through what you are doing. The market, your offering, sales & marketing, putting together an experienced team, the business model and finances
It provides a basis for discussions
Shows Investors that you are professional, serious about the project and are thinking of every aspect of the business
Investors cannot see everyone; they will want to first have a few pages (Exec Summary) of a business plan and then follow-up the ones with which they are interested.

Getting started on a Business Plan

Structure of a Business Plan

If an existing business:

Make sure that what you are doing at the moment is profitable, if not profitable show why it will be
Build your revenue with a sales drive to show the business to its best effect

For start-ups:

If based on a new type of product, make a prototype
Show it is not just a good idea, but that it will actually sell by getting positive customer comments, or letters of intent to order.
Produce a market survey that supports your product or service. Don’t simply say “everyone I’ve asked likes it”.

Be able to explain in a couple of sentences what your business does, its advantages over the competition, how it will make money and who its customers will be. Have evidence to hand to support your numbers.

Know what you are going to spend any investment on. Make sure that it’s not just to pay you a salary, or all thrown at marketing.

What role will you expect the Investor to take, some are looking for an active role in the company, some only expect to give advice, very few will consider just giving funding and stepping back completely.

How will the Investor get a return? A sale of the business, a buy back of shares, interest /dividend payments? Over what time?

Look at government Investor incentives. In the USA there are quite a few States that are trying to attract businesses, basing your company in that area can give tax advantages to the company and potential Investors.

In the UK there are the EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme).

These are attractive to potential Investors and may make the difference in choosing your opportunity or someone else’s. A quick way of getting a foothold on to these incentive schemes and be able to show Investors the potential, is to get a statement from the Inland Revenue (HMRC) that your business is likely to qualify for the scheme called a EIS Advanced Assurance

Finding investment is not necessarily quick. Realise it will take time and energy. Be persistent and turn over every stone to find the right investor that understands your market and is excited by the team and opportunity that you have.

The right management team for funding

Company Structure Many of the people that I’ve talked to recently are individuals, they have a need for funding to start-up or to get greater growth, so they are talking to me about finding investment.

After asking about what they have done to prove the concept and reduce the risk to an Investor, the next thing that I ask about is who is behind the business.

From an Investor’s viewpoint they will want to see that whoever is involved has the capability and experience to make a success of the investment, they don’t necessarily have to have a comprehensive and large team behind them.

It some cases the Investor may in fact want to become active in the business and so will be looking to see where they can add value. If for example the Investor has a financial background, a business where the owner is an expert in the market and product, but could benefit from additional business skills would be an attractive fit.

There are Investors though, who whilst willing to contribute experience and contacts would not want to be involved in the day-to-day activity. They ideally would like to see all the bases covered by a solid team of experienced and talented people with a strong commitment to success.

By “bases” we are talking about Product/Service development, Sales & Marketing, and Administration/Finance.

So if you as the owner of the business have one of those areas covered, you should be looking to have brought in partners or employees to cover the rest.

There has also been a trend in recent years for fast-growth businesses to bring high profile Chairman into the company. These figureheads add credibility to the venture, help with their advice and will be experienced in talking to people such as Investors.

Even at a more modest business level bringing senior people in as Non-Execs to add authority and experience can be positive to Investors. It reassures them that the business has the talent to grow with some help, but not requiring a lot of their limited time.

That may of course be less attractive if the Investor has ambitions to be an active part of the team themselves, so consider what your potential Investor’s preferred role may be and that could shape how you present your team.

Having said this about building a team for investment, if the business is one that looks destined for high-growth, Investors will bring in specialists and experienced people to fill any gaps. But for the majority of businesses a little thought on shaping the management team will give credibility to an investment proposal.

Sales and Marketing Plans

Whether you’re writing a business plan, or simply want to make sure that your business has customers, you are going to need a sales plan and a marketing plan.

Yes need. Not optional, not nice to have – need.

First let’s get over the instinctive dread of the word plan. It doesn’t have to mean a formal document, but it does need to be written down. Writing forces you to think and you can’t get away with the woolly thoughts that are there when this is only in your head.

Notice also that I separated the two. People use the phrase sales & marketing, but they are two complementary areas of your business activity. You can write them separately or joined together in one overall plan.

When I talk to entrepreneurs they can chat for hours about the features of their product, but ask how they will sell it, or how people will find out about it and a there is a vague response of “oh that’s what I need money for, to advertise and stuff”.

It’s far more interesting to think about the product or service than about the practicalities of how you will sell them. Until the business fails because you don’t have customers. Or you don’t attract investment.

So what is in a sales and a marketing plan? Which do you do first?

Start with the marketing plan, because part of that is defining who and where your target market is. You’ll need to know that in order to sell to them. I wrote an article about this: How-to-Market-Smarter

The contents and emphasis will vary depending on the type of business, it’s complexity and of course the market it operates in, but in general a marketing plan will have:

A description of the market you are operating within, think about the geography and demographics. You can include how the economy affects this market. A cut-rate supermarket does better in a difficult economy for instance.

Who are your competitors, their pros and cons. What is your strategy for competing against them?

Who you are selling to, your ideal customer. As mentioned in my article above, it should be broken down into segments.

Branding, values, colours, logo – the message you want to communicate. Cheap and functional or premium and exclusive, this is where you decide what people think when they hear your company’s name.

Products and services with pricing strategy – no need here to go into depth on every product functionality. Rather the strategy of what type of products and services.

Lead generation – this includes PR, advertising, web sites, referrals, direct mail, attending exhibitions, giving local talks, networking… Be specific, don’t just say for instance you will advertise, give a list of publications and the dates you’ll appear.

Marketing costs – put together a spreadsheet showing the costs of each of these marketing activities.

Once the marketing activity is generating leads, how will you turn those into sales? This is the sales plan.

Sales strategy – do you have your own sales force, will you have distributors, is your business web based only or perhaps a high street shop.

Sales process – how do you qualify the leads generated, how do you engage with them, key sales messages,

Service experience – how will you later follow them up, retaining customers and encouraging them to buy again.

Sales forecast – compile a spreadsheet by month for the year (plus a year 2 and year 3 total if doing a business plan for investment). Broken down by product or service category. Sometimes it’s hard to forecast for a new business but you must make a stab. Note down your assumptions of why you forecast those numbers, so when it proves wrong you know why and can adjust it.

It takes time and we are all busy, but there is no alternative, you can’t run a successful business without a sales plan or a marketing plan.

Use technology in your business or fail

In a previous work life, I used to give presentations on technology and as a way of lightening the tone of what could be a heavy session, I showed a cartoon. The caption read “In a moment of inspiration Dave the repairman connected the air-conditioner to the Internet”.

Now, what’s funny about that you may ask? These days everything from fridges to toasters (yes you can buy one) get the Internet treatment.

Well, at that time the only device connected to the Internet was a computer and then not every computer. The workhorse of computing was called a mini-computer and it looked exactly like an air conditioning unit. Connecting it to the Internet would be impossible; we used to laugh at the absurdity of the cartoon.

How times have changed. I’m older now and the latest trends in technology don’t automatically include me. I have to consciously make myself aware of what is happening and how that impacts what can be produced as a product, offered as a service, or affect the way a business operates.

Unless designing an iPhone app, or working on a new type of web site, many entrepreneurs that I talk to have not included technology in their plans for the business.

That would be a mistake, because undoubtedly your competitors will have built-in the latest technology and it may be the edge that differentiates your business from the others.

5 ways technology can give you an advantage:

Build it into your sales plan. Either by selling on your own web site (eCommerce), or using Amazon or Ebay who will help you set up a shop within their sites.
Have a plan of using technology to help your marketing and PR. This is increasingly important. You can advertise using Google Ads, place “how to do” videos on YouTube and use social media web sites such as Facebook, Twitter and Linked-in.
Buy a web domain name that describes your activity. It depends on your type of business but whilst “Johnston International” sounds good you’ll only be found on search engines if someone types that name, however have a web site called “handbags.com” or “cookbooks.co.uk” and you’ll be found more often.
Once you have your own domain name use it to have your own email address. There is nothing less professional than using hotmail or gmail as your email address for a business, it screams small-time amateur.
Automate your business processes as much as possible, all the way down the supply chain, from how you order goods or services yourself, to despatch of goods and customer service. Use modern accountancy packages. Communicate with your customers by email, again automated where practical. This is an area that will save you money, speed processes up and free your time.

Don’t use excuses such as I’m too old for all this, I’m more of a people person, I don’t understand and in any case I’m too busy. Your competitors will be eating your lunch.

1000 Business Ideas you can start

I’m always saying that ideas are 10 a penny, it’s getting off your backside and doing it (and doing it well) that counts.

But are there really that many new business ideas about? I decided to have a look. Not all of them would in fact prove commercial and some when you examine them, are actually old ideas brought up-to-date, but there are thousands of business ideas laying around waiting for someone to pick them up.

A few words of advice when looking at business ideas:

Never pay anyone for a get rich quick scheme – If it’s too good to be true….
Watch out for “work from home” businesses that will cost up front for samples or products but never make you enough money to live on
A lot of ideas that are talked about have never been tested and might not work

However, you may get inspiration and your own business idea from looking through the lists. Once you’ve got the idea you must then of course think through the market and how it will in practice work. See why ideas don’t work or get investment.

Finally, do it. Yes, actually do it.

5 Places to get Business Ideas:

Palo Alto provide 500+ sample business plans. There may be one there that you could make your own.
Scott Barlow’s ideas are very interesting and with some modification could lead you to an innovative business.
Franchises – these provide not only a ready-made source of proven businesses to get in to (for a fee to the Franchisor) but if you look through the listings you may think that there are a few there that you could start yourself from scratch.
You could buy an established business of course, but since we are focusing on getting ideas for a business, you could use the listings of businesses for sale to trigger ideas
Use our own site, Company Partners, and team up with a business partner to develop ideas for a business. There are as well a lot of people who have already done the initial hard work of getting a good business idea and are looking for a partner to join with them.

You can also generate your own business ideas. I like to start from first identifying a market need. This is a good way of forming a business that is likely to work. Having said that, who would ever think there was a need for Twitter, so there are exceptions!

Business Plans are worthless and a con

In talking to entrepreneurs the subject of business plans often comes up. While some have excellent plans, others haven’t and feel that business plans are a complete waste of time and just there to line the pockets of consultants.

I think the issue is that the phrase “business plan” has become over used and lost its meaning, conjuring up complicated and costly documents that have no real practical help. Just another form that has to be filled in.

However if you were to ask whether someone has a plan for their business, not a “business plan”, but simply do they have a plan for their business, then most will say yes of course.

Few would imply that they have no idea of what their business is selling, the market it is in and what its aspirations were, even if it’s not written down but just in their heads.

When communicating to potential Investors or applying for a loan however they will want it written down in order to decide whether it is something they are interested in and to filter all the many approaches they receive.

They can’t see or talk to everyone, they need to look at something to decide if the opportunity is in a suitable market area and has sufficient quality that they will then invest time in following up.

That has lead to the structure that we now call a Business Plan. But if you are not applying for funding is there any point in writing down the plan for your business?

Well yes. Because the discipline of having to write down your thoughts for the business is a great way to force you to put in place actions and ideas that will develop your business.

While it’s all in your head it is easy to be fooled that you have this grand plan. Start writing it down and get some detail into the woolly thoughts that you have.

If it is not for funding but only for you, it can be in any format and as long or short as you wish. An action list that goes beyond a few months is a business plan.

So is planning your business worthless? If applying for funding is it unreasonable for the potential Investor to ask for information about the business and its plans in writing so they can read it?

Other resources:
Writing business plans for business angels

Marketing plans

The Business Angel – a hidden treasure of resources

Happy New Year all. Time for reflection and to reinvigorate ourselves. Hope 2014 is a great year for you.

Thought I’d share a little known resource that may be of interest to people. We’ve put in one place good information for both entrepreneurs and Investors including some great tips from active Investors, worth a look…TheBusinessAngel.org

There’s pointers to many other resources as well and if there is anything we’ve missed, let me know, we’ll add it in.

The 5 key things you must do before revealing your great idea

I often get calls from members who are looking for a Business Partner or Investor but are concerned about how much they can reveal of their business idea.

It is a conundrum; because on one hand you need to tell something of your business idea in order to attract a partner or funding, but too much and surely the idea will just be stolen. In my experience this is the 5 actions you must do before telling all:

Determine if your idea is patentable. Generally patents relate to new inventions that are not obvious to anyone with knowledge of the subject and can be used in some sort of industry.

You may need to employ a patent agent in order to see if your idea is patentable. We have more about patent agents in our resource pages.

If it is patentable, you should not tell anyone about it until you have applied for the patent, otherwise the idea could be considered in the public domain.
If it is not patentable, can the design of your product or brand be registered?
Design registration applies to the shape, colour and style of products that aren’t in themselves new ideas but protect your particular design.Again we have an article on our resource pages on this, see Design Registration.
Think about protecting your brand. This is your logo, product names or packaging and any distinguishing ways you have of representing yourself. See How Trademarks Work and this resource has information on Copyrights.
Spotted a gap in the market? Have a novel way of doing business?
Unfortunately there’s no registration that will protect ways of doing business or addressing a new market area.

If you are concerned about discussing your original idea for a business with a potential partner or Investor you could ask them to sign a Non-disclosure Agreement. You can see a NDA example here.
Finally, get first mover advantage. If your great business idea really is good, eventually others will start to copy you. This is inevitable, but by being the first to market you will already have captured some customer’s loyalty and will be ahead of the competition in terms of understanding the market and developing your product or service.
To grab that first mover advantage you must move fast and when you have launched keep innovating, don’t rest on your laurels.

To give a bit of reassurance, in all the time that I have been advising and helping people with business plans and bringing business partners and Investors together I’ve seen no cases where an idea has been stolen.

Generally it is the implementation of the business idea rather than the idea itself which counts. There are a lot of good ideas, but most never get off the drawing board and the ones that are successful are those that are not only acted upon, but are executed brilliantly.

Top 8 mistakes when seeking Investment

Investor reading business plan At Company Partners we talk to a lot of Investors and we often get the same observations about what Investors like and don’t like.

Although I normally try and accentuate the positives to be learned, there are valuable lessons from the goofs to be avoided, here’s my top 8 mistakes when seeking an Investor:

You know it all, any advice about your product, strategy or sales projections is actually criticism and must be defended.
The most important thing is to talk in detail about your product or service, you haven’t got figures but the market is begging for it and the sales will be enormous.
There isn’t a business plan, that’s not your expertise, you just want to get in front of an Investor and they will jump at the opportunity.
Mails and any communication with Investors are perfectly all right with typos and all in lower case or “text speak”, it’s your idea not your spelling they should be interested in.
No work has been done to prove the concept, you’ve not the money, expertise or contacts to do so, that’s why you want an Investor.
Although the business hasn’t started yet and has no revenue you want £100k for 20% of the business.
Good news you’ve found a potential Investor, but his demands of equity are unrealistic, after all it’s your baby we’re talking about.
You don’t have any idea how much investment you need, or what it will be used for, you just know you need someone to invest.

Let’s face it, it’s hard to know what is needed or what to avoid when you are seeking investment for the first time and we shouldn’t diminish the hard work entrepreneurs do in looking to grow their business. It helps to learn from others mistakes though.

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