Our company is in its tenth year of existence and when I open my old note book from those very early development days, which started way back in 2009, I find it hard to remember all the feelings around starting-up a business venture. Looking through the frayed pages it seems we were obsessed with a name and logo, with so many variations being drawn and discarded. I am very proud we chose ‘Know and Do’, it still says exactly what our business is about – ‘helping leaders learn to solve their problems by effectively applying the knowledge’ – but I’d probably not focus as much time on these things next time round.
My trip down memory lane came from a recent discussion I was invited to join with Tech Manchester as part of the UK Fast webinar series. Talking with some passionate, clever and insightful colleagues from around Greater Manchester we discussed the wide array of support and advice to start-up businesses.
If I was re-starting a business today, I’d share the advice we give to many new or emerging companies. Essentially, there are a few core factors that in my view make a huge difference to a new business idea moving from paper to become a thriving company:
What is your purpose? Setting out your mission for starting the business helps you look to create a strategy and culture to the business that is consistent and coordinated. It can draw investors, partners and employees to your business as they buy-in to your purpose. (Check out our tips on strategy here).
Is there a demand for the product or service? Without this you may only ever sell to yourself! A great idea is nice (and great ideas are needed). However, it is only commercially viable if it is wanted by others.
Is there a profit in the product or service? The price you can charge customers has nothing to do with the cost of production, but you do need a profit margin in it. The value a customer places on what you are selling determines if the market will sustain your new business. A business needs that profit buffer and to know if it is (or is not) there (as we share here).
Never loose site of the cash. If you are the owner, you need to understand the money. If you run out of cash your bank account will not clear payments on good will. Even when you grow, it is easy to let costs rise and your cashflow suffer.
Focus on the marketing and sales. Great ideas rarely sell themselves; they will still need mechanisms to share and promote their value. These processes need constant attention, assessment and energy (we have some ideas on this).
I know there is much more to a business than the five points alone. Things like structure, premises, people, equipment, legalities, suppliers, and so on matter. However, if you have a clear purpose, products and services that people be sold at a profit, manage your cash well and market the idea you have the engine of a business.
If it sounds like hard work, that is because it is. According to my maths (from reading reports) less than 1 in 10 people start a business and only around 25% of them create a company that can employ someone other than themselves. So, if you have the desire to try, then we’d love to talk with you and help you focus that motivation to be successful