During the last few months, since setting up my own business consultancy, I have had the privilege to meet up with a wide variety of new contacts as well as reconnecting with some old friends, and the number of them who are considering leaving to start up on their own (or have already done so) is striking.
Maybe it’s the realisation that we are all going to be working beyond our 70th birthday (so we’d better enjoy what we do) or the realisation that a career change and redirection is OK regardless of age. I can’t say for certain, but the willingness to forego the security of a monthly salary and pension is noticeable. In some cases, they are exploiting a niche that they have identified as their area of specialist (and valuable) knowledge. For others it’s an entirely new direction to help them pursue a particular passion or desire to ‘do good’ in communities at home or overseas, which probably also involves permanently dropping their income quite significantly as a result.
It’s widely accepted that outside of the US, the UK is unrivalled as a place to start up a business, being truly a nation of entrepreneurs. In 2016, 660,000 companies were started, with many being sole traders, across a wide range of products and services, representing the hopes and dreams of each of their founders. However the sad reality (according to Small Business Trends, May 2018) is that just over 50% of small businesses fail in the first year. The good news though is if you make it through the first 12 months, the failure rate drops away significantly, so all that hard work can really be worth it.
The siren call of chucking it all in and starting up on your own can be very strong, especially after particularly difficult and frustrating days at the office, but this is the point where you need to take a step back for a moment. With the leading causes of small business failure identified as incompetence (46%), lack of managerial or relevant managerial experience (30%), neglect, fraud, and disaster (13%), and lack of experience in the chosen line of goods or services (11%), I wanted to share my experience as an entrepreneur starting up business as well as running early stage companies.
Each day this week I will provide a bite sized outline of each of the 5 Steps that I have identified in my own journey to hopefully act as thought starters, so that perhaps you will be a survivor beyond year 1.
Step 1: Develop your core concept and proposition.
All businesses start with a dissatisfaction about the status quo, either in terms of a perceived un-met need or an opportunity to do something better. This can relate to a growing consumer trend, such as Veganism in Beauty, or access to affordable renewable energy for the home that can predict your future needs. This is an important part of your future Mission statement; it’s what I call the ‘I’m mad as hell and I’m not going to take it any more’ driver that sustains new businesses in the difficult early days.
This stage is always the fun part, the one that gets tossed around in a bar or over a meal, when a chance comment or thought starts to crystallise into a more considered opportunity. It could be a poor quality experience received from a major supplier, or a product that makes something a bit easier to do. Whatever it is, you need to test the idea thoroughly. Start by talking about it with friends and trusted colleagues, although you might not be able to be too open about your motives at this stage, and really listen to their answers. You will find a lot of people who think it’s a great idea, and whilst this is reassuring it can lead to a false sense of security – after all they are your friends, and it’s not their mortgage that is at risk if it all goes wrong.
Seek out the ‘less convinced’ people as it is vital that you listen to them too, so you can find out how your idea could be improved to get them interested. How ‘disruptive’ do you have to be to create the opportunity for success? Can your idea grow the market or is it reliant on taking market share from others already established? Does the idea play to your strengths and expertise? What are some of the obstacles that you are going to face?
Be prepared to be wrong. Don’t allow yourself to be convinced by your own brilliance or unique insight! Don’t carry on regardless of the feedback or gnawing gut instinct that says this might not be right. Live with your idea for a while, and if you still like it in a couple of months’ time it might be worth taking it further.
As a final thought, I have found that a jump into Innovation and IP tends to be a focus of conversation at this point too. Patents, Design Registrations, Copyright – these all sound great but they are difficult to obtain, costly to maintain, and expensive to defend when infringed so approach with caution. Unless your Business Model relies on licensing a unique property you may want to avoid doing anything more than simply trade marking your company name and branding device in as many markets as you envisage trading in over the next 3 years. One thing to remember though is that once your idea/product/service is out in the public domain you cannot patent it. A Patent is a public declaration of something that you have developed that is intended to build on the knowledge of all but is then protected from anyone else using it for 25 years. If it’s already in the public domain it has what is called ‘Prior Art’. I recall having to speed through a Patent application a week before going to a major trade show as this point had not been made clear to our business, and I can tell you that is a stress that you need to avoid!
The message is keep focused, and be consumer driven to make sure that what you are going to offer truly meets a stated/ unstated need.
Taking an idea and developing it to see its true potential is important at this stage. I’m an award winning innovator, with patents and design registrations in 8 international markets, so if you want to test your thinking and even develop a few more creative or innovative solutions, my ‘Free 3’ support could help you.
This week’s ‘Free 3’ is exclusively available to start up businesses, or those thinking about starting out on their own, and provides up to 3 hours of free consultation with me. So whether you prefer a one to one discussion about your concept, or would like me to attend a creative workshop with you and your team, how you use your ‘Free 3’ time is up to you. Available for the first 3 respondents* messaging me by the end of Monday Sept 17th.
(*Limited to one ‘Free 3’ consultation per person/company, as offered during the ‘Start Up’ series 10.09.18 – 14.09.18. One consultation session per ‘Free 3’ offered.)
Coming up tomorrow Step 2: ‘Understand your Opportunity’.
Have a great day.
Lead Consultant & Founder – Primaverita
Mobile: 07977 493262