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Blog posts tagged Entrepreneur

The rise of entrepreneurial spirit in the UK

September 17, 2012 by John Davis

The rise of entrepreneurial spirit in the UK/Female writing on glass board{{}}Entrepreneurial spirit in the UK is thriving, with one in four people wanting to start a business, according to new research published by business software and services provider Sage.

The study also suggests that the country’s current economic dependence on the South East will start to move northwards, with the North East set to become the recognised home of UK start-ups over the next two years, as people take greater control of their future.

Up to 500,000 new businesses are starting each year in the UK, with about seven in 10 owners starting up because they want to be their own boss. According to research by The Global Entrepreneurship and Development Index and Imperial College Business School, the UK scores fifth in the world for its level of start-up activity. This is largely because of its share of technology sector start-ups and the quality of resources in start-up firms.

While the British economy may have slowed down in recent years, British entrepreneurs refuse to let their ambitions slide. Manufacturers, internet-based start-ups and retailers are all well represented in the UK’s small business landscape. Prime Minister David Cameron recently said: “Small businesses and entrepreneurs are the lifeblood of the British economy and I am determined that we, working with the private sector, do everything we can to help them to start up and to grow in 2012.”

However, potential entrepreneurs should be aware of the numerous challenges involved in starting up and growing a profitable business before committing to launching a business idea. Pressures include:

  • Dealing with the lack of cashflow
  • Increasing turnover
  • Funding the purchase of new equipment
  • Operating against established competition with minimal resources
  • Being prepared to lose everything if things go wrong

With proper preparation, determination and a clear vision, entrepreneurs can successfully overcome these challenges.  As Michael Hayman, co-founder of Start Up Britain, summarises: “All around the country people are proving that you can make it in Britain, be your own boss and create jobs that can help transform communities.”

Championing real-life entrepreneurs

November 16, 2011 by Mike Southon

It was depressing to see Business Secretary Vince Cable quoted as saying that the economy was in worse shape than under the previous administration and that a double-dip recession was a distinct possibility.

While the opposition immediately seized upon his comments, it could be argued that this was rather hypocritical as the current debt crisis and poor bank regulation were a direct result of their own policies.

The feeling of most entrepreneurs is that government is essentially powerless to influence the economy at the grass-roots level. Rather than decreasing regulation as they always promise, any intervention on their part, however well meaning, always seems to create even more obstacles to enterprise.

The solution to our economic challenges is clear. Rather than sit on our hands and complain, now is the time for entrepreneurs to get out there and sell our way out of the recession, bringing the rest of the UK's economy along in our wake.

But this will need to be the UK's real-life entrepreneurs, not the get-rich-quick chancers we see in the media, an image actively fostered by offensive and unrepresentative programmes such as Dragons’ Den and The Apprentice.

And while it is always a joy to inspire young people into a path of entrepreneurship, this is a long-term policy rather than the immediate help that the UK's economy needs.

Real-life entrepreneurs first felt the effects of the recession in 2008. Those that have survived followed the best practice that all businesses should follow. This includes the banks, which are always quick to criticise small businesses for their lack of planning.

Successful entrepreneurship involves reducing risk wherever possible by concentrating on the core business of the organisation and, wherever possible, finding the most profitable niche or vertical market. While cost-savings are important, the main focus should be on generating revenue and reducing the length of the sales cycle.

Rather than chasing brand new customers who promise big orders from exotic locations, the place to find immediate revenue is always your existing customers. They may be equally affected by the recession but willing to discuss mutually beneficial outcomes with people they trust.

It is also a myth that there is no money out there. This is the strong message I have received across the spectrum of industry, from private equity and venture capital companies, angel investors and those companies who have managed to grow successfully in the last few years.

You only need to scan the regularly published lists of fast-growth companies to see which industries have thrived in a recession; all of these companies and others like them have money to spend with the right suppliers.

I am also determined to do my bit to help the UK's entrepreneurs. Starting on November 1st in Essex, I will be presenting at twelve branches of the Federation For Small Businesses (FSB), events that are open to everyone.

The FSB recently launched a new initiative “Championing The UK's Real Life Entrepreneurs”, which focuses on the key issues facing its members. These include increasing the routes to finance, improving cash flow, adopting a new approach to regulation, reducing and simplifying business tax, incentivising job creation and opening up export markets.

The FSB's Head of Policy and Public Affairs, Andrew Cave explained to me that the campaign is designed to galvanise the small businesses in the UK to take a forward-looking and positive attitude towards the economy by increasing their revenue and taking on staff, especially the increasing number of unemployed young people.

He argues strongly that the opportunities and skilled, hard-working people are out there; all it needs is a positive attitude.

Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.

I have become (un)comfortably numb

August 31, 2010 by www.inafishbowl.com

I enjoyed reading the article written by Marty Zwilling about the personality traits of an entrepreneur.

In his article, he describes the personality of the entrepreneur to be:

  • visionary
  • creative AND logical
  • energised by risk
  • eager to listen to the input of others
  • motivated
  • Jack of all trades
  • and most important of all, enjoying the journey.

I enjoyed the article because I can see that I have all of these. I have a strong vision of what my sector can be in years to come and I would love to be an important player within it.

I am eager to listen to the input of others, and inafishbowl.com has been an amazing experience. I have had some really useful advice from experts on the expert panel, and more recently from Imran Hakim and Iain Scott whose blogs reassure me that I was right to postpone the launch of Rico Mexican Kitchen in a major supermarket chain – thanks guys! I’ve also learned so much from my fellow Fishbowlers and I’m quietly jealous (in the best possible way, of course!) of Owain and Dom’s partnership, and that they can rely on each other to share the tasks.

However, if I’m honest, I’m feeling kind of numb and somehow not enjoying the journey as much just at this point. I have had some highs, but the low of finding that I have to be on such very tight budget is getting me down. Or maybe it’s simply because I’m tired? Maybe I just need a few days off.

Well, I had to be up today at 3:30 so I could greet the distributor who was taking my very first orders of our brand new product, TAMALES to some really funky restaurants in London. I should be really excited, I know it’s a day I will remember in years to come, but instead, I feel numb. I just keep saying to myself that I need to be patient, as success will come with perseverance, resilience, and not before a long list of failures which one learns from. I’m in it for the long haul!

You can find out more about Marcela on the interactive business website www.inafishbowl.com

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Are you an entrepreneur, manager or technician?

July 09, 2010 by Martin Johnson

Reading E-Myth by Michael Gerber changed the way I thought about my own business, Big Picture. It helped me decide to change my offering from business consultancy to providing a template that could be packaged up and delivered to established coaches, consultants and accountants.

After much research and development, we’re back thinking about start-ups and how Big Picture can help shape successful businesses. So, getting back to E-Myth, what are key parts that Big Picture and it share, starting with the personalities that are present in any new business?

It’s no coincidence that the three personality types E-Myth describes are easily placed on Big Picture: the Entrepreneur; the Manager; and the Technician. To quote: “While each of these personalities wants to be the boss – none of them wants to have a boss”.

Anyone can start a business, but to build one that actually succeeds you can’t just play the natural role of technician. “Your ‘Entrepreneur’ needs to be coaxed out, nourished, and given the room it needs to expand. Your ‘Manager’ needs to be supported to develop its skill at creating order and translating the entrepreneurial vision”.

For a new business to progress from infancy, through adolescence to maturity, starting with an Entrepreneurial perspective provides the best chance of success... That’s the theory, anyway.

Martin Johnson, Big Picture

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Managing my business finances

May 17, 2010 by www.inafishbowl.com

Entrepreneurship is all about making things happen and turning ideas into a profitable business. However, it’s impossible to have all the skills and attributes in one single individual- no matter how motivated or how working one can be, to turn an idea into a long-term profitable proposition requires a team of people who complement each other.

I realised a while ago that I could do with bringing into the team someone who has the skill sets to help me really get the numbers behind the forecasts right, and to help me negotiate with banks, funders and other possible stake holders. Someone who can help me turn the forecasts into a reality; in other words, an experienced, trustworthy financial director.

It was time for me to call in the experts. I came across an organisation which offers the services of a “virtual” or part-time FD who will work with a company for a minimum of 1-2 days per month and helps with all the financial strategic stuff. I met with the regional director of that organisation and my FD-to-be if we will take things further. It was a pleasant, purposeful meeting, and I felt I could trust the guy. They call it the “barbecue test”, in other words, would you invite the person to a barbecue. We will go to the next step and meet for a full day to discuss the business past, present, future and financial strategy.

I think this model will be the affordable way to bring an experienced helping hand to complement my winning team and turn my proposition into a reality.

You can find out more about Marcela on the new interactive business website www.inafishbowl.com

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Have your say! Business support part two

April 19, 2010 by Rory MccGwire

Earlier this year, entrepreneur and founder of The School for Startups, Doug Richard, published his Entrepreneurs’ Manifesto – a “declaration of rights” for small businesses.

The manifesto sets out eight demands to a new government, each of which addresses a different key concern for businesses. In the build-up to the 6 May general election, Donut MD Rory MccGwire is offering his thoughts on the issues raised by Doug Richard.

Scrap Business Link?

In Part 1 of this blog I summarised the recent history of business support in the UK. I concluded that, after 20 years of heavy expenditure, one precious asset that we have is a brand that most business people recognise. Business Link is “the place to go to access whatever help is available”.

I take this view notwithstanding the fact that I’m still hearing the same things now as I’ve heard every single year during that period.

“Business support is too fragmented.” “I don’t know where to go for help.” “It needs to be more practical.” “The advisers need to be people who have run SMEs.” “It must be local.” And meanwhile the civil servants seem as keen as ever to have a service that is “innovative”, a word that is prominent in every tender that comes across my desk at BHP, the company behind the Donut websites.

In his intentionally controversial Entrepreneurs’ Manifesto, Doug Richard proposes scrapping Business Link and moving business support online.

Traditionally, business support has been delivered one-to-one through business advisers and telephone helplines, together with an extensive calendar of training courses and networking events.

But hold on a minute, let’s start by asking what we are trying to achieve. What are the objectives of government business support?

Well, it’s support for businesses of course. There are about four million of them.

Some of them are like Doug Richard and me: successful (OK, he’s a lot more successful than me, I’m the first to admit it), confident, experienced, and so on. Do these individuals seek Business Link’s help on how to start a business, or how to comply with all the regulations surrounding employing someone? Probably not, but we do take advantage of tailored support for ‘high growth’ companies. The UK invests a lot of money helping its most capable businessmen, not least because the next Google, Dyson or Nokia may be among the businesses that they start. I have mixed views on this.

I generally prefer ‘pull’ to ‘push’. So who are the people who actually come looking for help?

In a word, novices. It is people who feel they would like to be self-employed, but want to bounce their idea off someone with some experience who can also tell them how to go about getting started.

One obvious group that springs to mind is women who are returning to work once their children are in full-time education. They have a high propensity to seek help.

Another group who ask for help is people who have never run a business, but suddenly find themselves out of work. (By the way, Tony Robinson, the well-informed boss of SFEDI, the standards-setting body, was quoting a UK statistic that if you’re made redundant at age 45 you only have a 10% chance of getting a new job.)

There are lots of subgroups like this. Some of them get lumped together in reports under the unflattering name of ‘disadvantaged groups’, or ‘the hard to reach’.

Do these guys all use the web for business support? Er, no. The latest research from the Small Business Research Trust reveals the true extent of this non-use.

In 2007, ‘information on websites’ was the most popular form of business advice, having just pushed ‘face-to-face contact with an adviser’ into second place. But the latest data, published in December 2009, puts the business advisers back at the top of the charts. I guess there is simply too much information out there on the web for people to cope with.

BHP’s own user-testing bears this out. Users with a specific business question are unlikely to be able to find the answer online. Their first port of call is businesslink.gov, which is also their best chance of finding the answer. So it should be after the vast sums of money that have been invested in it. Happily, they also find the Donut websites useful for the topics that we cover. And likewise a specialist website such as j4bgrants is a treasure trove for that specific search. But while other small business websites are brilliant in other ways, they don’t always give you direct answers to direct questions.

As the data shows, businesses are once again finding it easier to simply ask someone: a friend, an accountant, an adviser, or whoever.

Business Link, and the plethora of business support organisations that it acts as the signposting for, delivers this face-to-face support. So it’s no good simply scrapping it. The question is, how can we improve it and which organisations should be delivering this one-to-one business support?

I’ve got lots more to say on this fascinating topic. On call centres; on how to objectively establish the success and value of a service; on the psychology of start-ups and micro businesses; on how to make the front line and the back-office of Business Link (etc) hugely more cost-effective; on how to involve the banks (an old idea, but a good one); on how to get the support/messages of 1,001 different public sector organisations out to small and medium-sized enterprises; on how to do public sector procurement without financially damaging so many of the bidders; and, sticking with procurement, on how to tap into the specialisation, experience, passion and sheer hard work of the smaller suppliers more than we do now; and that is just the first list of things that springs to mind…

But let’s see what others have to say first. Comments please!

(By the way, thank you to everyone who commented last week on my business regulations blog, I’ve enjoyed reading them all.)

Rory’s other Have your say! blogs

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Have your say! Business support – Part 1

April 15, 2010 by Rory MccGwire

Earlier this year, entrepreneur and founder of The School for Startups, Doug Richard, published his Entrepreneurs’ Manifesto – a “declaration of rights” for small businesses.

The manifesto sets out eight demands to a new government, each of which addresses a different key concern for businesses. In the build-up to the 6 May general election, Donut MD Rory MccGwire is offering his thoughts on the issues raised by Doug Richard.

Scrap Business Link?

In his manifesto, Doug Richard calls on the new government to scrap the Business Link business support service to provide savings and to migrate all government business support services online to promote efficiency.

In the report he wrote for the Conservative party earlier, I think he also recommended using the universities and specialist providers such as the British Library as a replacement business support network on the ground. More recently, Mark Prisk, the Conservative Shadow Minister for Business, has been talking about using the existing network of Enterprise Agencies for this role.

I’m sure Doug is as pleased as I am to see that the government is already going flat out to move the whole business of government online. Thousands of disparate systems and websites are being corralled into three mega websites: direct.gov for individuals, and nhs.uk for health. 

Yes, this is expensive, but what an improvement.

Lots of individuals lack a computer, but most businesses are online and will readily engage with businesslink.gov, as the evidence already shows. We small and medium-sized enterpriseslike being able to do tax returns and company searches etc online; it is a real convenience. We also use the huge library of advice pages. 

So let’s talk about the more contentious idea of scrapping face-to-face business support. But first, a bit of history. 

In the 18 years I’ve run BHP, I’ve seen governments come and go. At every general election, there’s a clamour to change the way government delivers business support. And we do change - all too frequently. 

In the 1970s, we had Enterprise Agencies, which were hailed as fulfilling an important need. 

Then someone said “No let’s have Training and Enterprise Councils”, so we had 82 TECs, with a £1.3bn budget to help SMEs in England and Wales. Scotland decided to have 22 LECs. 

Why 82 TECs? Because support had to be local, as everyone seemed to agree that “a business in Preston has a different set of needs to a business in Portsmouth” (nonsense on the whole, but that’s a topic in itself…). 

Then someone (I won’t mention Tarzan by name, as I’m trying to stay clear of party politics) said “No, these TECs are failing, let’s have a one-stop shop for business support. We’ll call it Business Link”. So we had had 82 Business Links, as local was still flavour of the month, while Wales invented something else new called Business Eye. 

Meanwhile the government had also created a network of nine massive organisations called Regional Development Agencies (in England only), each with a list of tasks and targets that went on for pages and pages. 

At this point someone said “Crikey, this costs a fortune and the quality and type of business support varies far too much, so let’s take the 82 Business Links and make them into nine Business Links”. 

And that’s where we are today. Endless change. If you ran a business like this, you would have gone bust over and over again. The cost of this never-ending change is too much to even contemplate. 

But, finally, we have a brand that, like any commercial brand, has been allowed time to establish itself. Hallelujah. There are even road signs saying Business Link in some towns. 

The question now is what we want the brand to offer, and how business support should be delivered. I’ll deal with that in my next blog. 

Rory’s other Have your say! blogs

  • Business regulation
  • Have your say! Business support – Part 1
  • Have your say! Business support – Part 2
  • Have your say! Business support – Part 3
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    Have your say! Business regulation

    April 14, 2010 by Rory MccGwire

    Earlier this year, entrepreneur and founder of The School for Startups, Doug Richard, published his Entrepreneurs’ Manifesto – a “declaration of rights” for small businesses.

    The manifesto sets out eight demands to a new government, each of which addresses a different key concern for businesses. In the build-up to the 6 May general election, Donut MD Rory MccGwire is offering his thoughts on the issues raised by Doug Richard.

    In his manifesto, Doug Richard argues that business regulation should be streamlined so that people can start businesses more quickly and run them more easily. 

    I agree. But in order to achieve this, I think the law must make an important distinction between small and large businesses. They have different regulatory requirements. What is fair and suitable for one is often neither fair nor suitable for the other. 

    It’s also important to recognise the natural bias in our regulations, a bias that stems from the fact that regulations are always going to favour the people who make them. So our regulatory system is heavily skewed towards the preferences of the government, the public sector, big business and the trade unions. 

    The seemingly simple task of taking a chunk of time off for a family holiday is a struggle for many people running a small business, so it’s hardly surprising that they do not have time to assist in the law-making process. 

    Nor do the various small business membership organisations have the power to make much of a difference. Think back to when the government raised CGT by 80 per cent without realising until afterwards that for many small businesses the only “pension” available at retirement is the proceeds of the sale of the business. A £1m threshold was hastily added, but not before it became obvious that the small business lobby groups had not even been consulted on this legislation, let alone listened to. 

    Yet it’s small businesses that end up paying the price for so much of the legislation. Take a law requiring organisations to offer wheelchair access to their premises. I’m sure everyone agrees that society wants to help make life less difficult for disabled people. But few people stop to consider who will be forced to pay for the door widening. We all pay for the doors to be widened in the public sector buildings and the corporate buildings, through our taxes, pensions and savings (some of which are invested in listed shares), which seems completely fair. 

    But when it comes to all the properties owned by small businesses, it’s the business owner who pays. So if I earn a £20k salary working for the local council or for a big company, I am not affected at all, but if I would have earned £20k from owning a shop, I might be left with just £17k after the adjustments to my shop front. How can that be fair? It’s not. It is merely convenient, both for the lawmakers and for the Treasury. 

    It’s the same with employee rights. Nobody questions the need for new parents to spend more time with their children. But who pays? There’s no compensation to any of the small business owners who pick up these costs. In a small business, every member of staff is a key person and losing them, even temporarily, is a considerable blow. Larger businesses have the resources to cushion the blow; small businesses don’t. 

    Given that small businesses employ a very considerable proportion of the workforce, I suggest that society ought to compensate small businesses if we all want to have those benefits. If not, you end up with a situation where business owners are terrified of employing women of a certain age. It’s discriminatory, but it happens; the law has massive unintended consequences. 

    Sensible regulation is essential to protect customers, employers and employees. But it must recognise the reality of running a small business. 

    So much of our business regulation is designed for Hewlett Packard and Rolls Royce, not for “mom and pop” businesses. But, in my view, firms with fewer than five employees should have a completely different set of regulations. If you choose to work for them, perhaps you shouldn’t have quite the same rights as employees in larger companies, simply because these rights amount to robbing Peter (the employer, who is a person) to pay Paul (the employee). But then you would be discriminating against employees of small businesses, which is clearly wrong. 

    So the only fair solution is for society (aka the taxpayer) to face up to, and pay for, the cost of implementing all these rights, instead of turning a blind eye while the costs fall onto the shoulders of small business owners. 

    Doug Richard is right and all the political parties seem to agree. We need to do something to enable the moms and pops to run their businesses in a more flexible and efficient way. Now let’s see if anyone actually does anything. 

    What do you think? 

    Rory's other Have your say! blogs

  • Have your say! Business support – Part 1
  • Have your say! Business support – Part 2
  • Have your say! Business support – Part 3
  •  

    What do you think about the regulations affecting small businesses? Please leave your comment below.

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    Mum's the word

    March 15, 2010 by Anna Mullinder

    The Start Up Donut’s week-long celebration of mums who run businesses – mumpreneurs, kitchen table tycoons, business mums, businesswomen, call them what you will – is over for another year. What did we learn?

    People don’t necessarily like to be labelled, so do we need a term to define this group? Is it necessary for people to know you’re a mum or is the fact you have children irrelevant?

    The discussion surrounding the term ‘mumpreneur’ on our forum threw up some interesting opinions.

    On the one hand, business women such as Laura Rigney are proud of the ‘mumpreneur’ tag. She said: “It takes an awful lot of determination and dedication to start a business from scratch and then continue running it while doing the everyday things that come with being a mother”.

    Emily Cagle disagreed, saying: “The main issue for me is the irrelevant categorisation of a business owner (who happens to be female and a parent). People tend to mean well by using the term to recognise the challenges mums often face, but I think it's generally unhelpful.”

    There will always be disagreements over such things, anyway, if Cara Sayer is right, the term 'mumprenenur' will undoubtedly go out of fashion”. Other terms, such as ‘kitchen table tycoon’, were also disliked, it must be said.

    We also invited guest blog posts from business mums last week and it was interesting to see the common themes: the importance of being resourceful; effective time-management; the need for multi-tasking; the need to start up on a shoestring; remain flexible; and being adept at prioritisation of time and tasks.

    The lessons learned when managing a family and various school runs, mealtimes, hobbies and bedtime routines can be very useful when running a business.

    You can see from the case studies that we’ve featured on the site, such as April Browne who runs Crystal Jewels, that despite much competition for their time, many mums continue to be inspired to start a business, while for some, such as Claire Willis of SnugBaby, necessity is still the mother of invention and the basis for many new mum-owned enterprises.

    At the end of the week, I asked an open question on Twitter aimed at all business mums: “What was your inspiration for starting your business?" These were just some of the replies:

    • Being able to work around my children and hopefully be able to provide them with a fulfilling, nurtured life! @LauraARigney
    • Flexibility of working hours, being able to do kids’ illnesses with no guilt and calling my own shots on what I take on. @essentialnm
    • Being my own boss and the ability to work from home while still looking after my children. Doing something I love helps too! @EmmaEwers
    • I wanted more flexibility! My long-hours PR job didn't suit any more - I wanted control! @businessmum
    • Sick of making a lot of money for someone else and wanting to spend time with my bubs! @bingoreviewer
    • Flexibility to not miss out on my children growing & to keep my brain active doing something I enjoy (designing websites). @glassraven
    • An overwhelming demand for my products. Initially a hobby, so I really had some learning to do!  and the realisation that if I worked hard enough I might be able to stay at home with George @Preciousparcels
    • Because it's something I'm passionate about. I think more people would choose #realnappies if they knew how fab they are! @RealChoiceNappy
    • My inspiration was not wanting someone else to have the pleasure of bringing up my children when I had struggled to have them. @mumstheboss
    • I'd always wanted to work for myself & having my son made me desire financial independence. These 2 goals still motivate me. @EmmaWimhurst
    • Redundancy, divorce and the need to see my children through university. @cathyrecruit
    • Being able to work around my children and having the luxury of not having to rush treatments as I plan my own diary. @OnlyHolistic

    These were broadly representative, with the vast majority related to having enough flexibility to look after children while still providing for the family. Starting a business seems to be the perfect solution for women who want to continue working but who also want to spend time with their children while they’re small.

    On a personal level, it’s been really nice to be in touch with such a lovely group of people who’ve been so helpful and really got stuck in with the discussions.

    I’d like to say a special thank you to our blog contributors and to everyone who retweeted, commented, said hello and helped to spread the word. Although Mother’s Day has been and gone, our support for mums running their own businesses will continue throughout the year.

     Anna Kirby, BHP Information Solutions

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    Marcela: 1% inspiration, 99% perspiration and 100% communication

    March 01, 2010 by www.inafishbowl.com

    On the roller-coaster ride of running one’s own business, I used to think that having a fantastic product would be enough. As you know, this is far from the truth. This probably accounts for the 1% inspiration bit.

    As I have discussed before, everyone expects you to be an expert in your business and in a small business, if you are on a shoe string and a one-man band, this means being an expert in everything. Is this the perspiration bit? The 24/7, never switching off, always being on task? Reading the paper on a Sunday looking for relevant articles, checking emails late at night when it’s quiet, cooking, etc..? I think the perspiration bit is also connected with the resilience of taking the failures as lessons to be learned, to stand up after falling, to get on with it and persevere when things may not be as rosy as one would wish for.

    But we are in the 21st century and I would add another element. Yes, you had your 1% inspiration in your great idea and you are working really hard, which is your 99% perspiration. What about the communication bit? I think this changes the 1%+99% equation. Nowadays, entrepreneurs are required to twitter, to tell their story, to shout out their values and they are also allowed, and indeed expected, to drive their enterprises ethically. Green issues, fair trade, sustainability...

    I think this is a great time to be an entrepreneur because it’s become the norm to have ideas and to communicate them effectively. I’m starting to learn how to communicate with people out there about what I’m trying to do – introduce new adventurous flavours of food that come from local growers and those who are far away, who share my passion for great food and respect for the environment and people. 21st century communication media - what a great opportunity to relate with possible customers and, hopefully, make a difference.

    You can find out more about Marcela on the new interactive business website www.inafishbowl.com

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    Marcela's story begins

    February 15, 2010 by www.inafishbowl.com

    In last Monday's blog post we introduced you to www.inafishbowl.com which follows the trials and tribulations of three startups. We're featuring the story of Marcela of Rico Mexican Kitchen, who produces home-cooked Mexican food products. Follow her story each week as she deals with buyers and distributors at department stores and discusses the reality of running a home-based business.

    Crystal ball, where are you?

    We normally start doing something new because we think we have a chance to succeed. Well, at least, that’s what I keep on saying to myself: “Look, you’ve put in your all, people like Mexican food, and your Mexican food has soul, YOUR soul in it.” Well, yes, and? Surely, giving your all and having a good product should be enough to make your business work, shouldn’t it?

    I gave up my job to dedicate my full energy to getting Rico Mexican Kitchen off to a good start. My idea was simple: to make fantastic authentic Mexican food so everyone in the UK could try something healthier, tastier and ethically sourced. But this game is sooooo difficult! Will I make it work? How? Any advice welcome!

    Everyone told me that it was a brave thing to give up my job to start a business. But deep down I was thinking, “I really want to try my best to make it work- it’ll be simple- I’ll make these amazing, delicious and authentic and people will buy them.” At the moment, however, some shops think that it’s not the right time for Mexican food... what are they thinking? What do they think Mexican people do when it’s winter... not eat? What do you think?

    Anyway, luckily Selfridges doesn’t think this and I am off to do a tasting session. I don’t know if I’m more excited or more nervous - I’m a bit of both, I suppose!

    The week ahead of me looks like an incredible juggling act of cooking, training course, kids off school, delivering, entertaining 10 girls for my daughter’s birthday party. The added complexity is that we are having new labels designed especially for the Selfridges launch and the printers don’t want to say that the labels will definitely be ready- just keeping me on my toes! I am really really nervous about this- will the labels arrive on time?

    You can find out more about Marcela on the new interactive business website www.inafishbowl.com

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    Overcoming the challenges of taking an innovation to market

    February 11, 2010 by Senake Atureliya

    I qualified with an electrical engineering degree from Southampton University in 1986. Various subsequent management and sales roles enabled me to build the knowledge and contacts needed to set up my first venture some five years later – designing and manufacturing production line machinery.

    After growing, finding investment and selling that business, I ran a consultancy rolling out cutting-edge business process automation across Europe.

    My current business – Pie Finance – helps innovators and entrepreneurs progress from ideas stage thanks to an innovative peer-to-peer funding solution. So what have I learnt about overcoming the challenges innovators face in taking an innovation to market?

    1 Reducing risk of disclosure/competitive edge theft

    Many innovators/entrepreneurs see this as the greatest risk. There are differing views on protection. The book Crossing the Chasm describes one of the most effective ways to prevent “idea theft”, it advocates rolling out the product/service to customers who are suffering considerable loss by not having it, which means it can be directly sold without advertising to a small number of customers. High margin sales can generate revenues required to launch in the mainstream market, while minimising risk of detection by potential competitors. Other solutions include: seeking intellectual property rights (eg patents); use of a ‘decoy’ product to build a potential customer and investor database; and non-disclosure agreements.

    2 Adapting to market developments

    Mature, saturated or diminishing markets are the most stable. Profitable, growing markets move fast, making an idea just a starting point, which is why it’s difficult to sell or get investment for them. New solutions to niche problems, competitors and consumers in the space can change daily, meaning even a well-established product/service can rapidly become obsolete. You must try to react quickly and stay one step ahead.

    3 Filling gaps in your plan

    Finding holes in ideas is frequently significantly harder than generating ideas. You need in-depth knowledge, whereas, most individuals create ideas by trying to find solutions to a problem. Sticking to what you know – technically and commercially – helps, but if you must venture beyond, try to find trustworthy people to fill any gaps.

    Bootstrapping is the best way to retain control and profit. Grant finance is worth securing, but usually requires match funding. Debt finance (eg bank loans, overdrafts and asset finance) are the next best way to raise funds, while retaining all equity. True, it’s hard for start-ups to secure debt finance, but those with a track record could benefit from the Enterprise Finance Guarantee scheme, which can cover up to 75 per cent of the risk.

    Business angels can also help, but only 3 per cent of propositions get funded and you must meet stringent criteria: very high returns on investment (x10 to x30 over five years); proof of demand (sales or forward orders); and a proven management team.

    Peer-to-peer resourcing (ie getting people and other things in exchange for equity or revenue shares) without payment up front is another option.

    Next to protecting your idea, protecting your investment must be your main priority. Giving away a share of the rewards is painful, but it’s well worth it, because failing to spot the gaps or not having adequate resource to overcome threats may mean you lose everything you’ve put into your idea commercialisation.

    4 Avoid loss of control – and your business with it

    Control, rewards and recognition are separate things. Identify what you want in return for your input. An investor’s primary concerns will be protecting and maximising their returns – which could involve them trying to dilute or force you (and possibly other investors) out. To combat this, don’t let your business get desperate for cash. Maximise your bargaining power by agreeing an alternative plan B (possibly C, D and E, too) at the outset.

    An industry guide to equity sharing is that a third should go to the person with the idea or IP, a third to the management team and a third to the finance providers. The concept of equity for very early stage start-ups is flawed, I believe. As dividends on preference and ordinary shares are paid out of profit, this introduces a layer of risk for minority stakeholders.

    Profit can easily and legally be “massaged” – revenue cannot. For entrepreneurs, offering equity means all external early stage input burdens the whole business on an ongoing basis, thereby discouraging adequate resourcing. With these disadvantages in mind, I believe it’s best to try and acquire capital and resources based upon on a premium fixed price paid out of a share of the revenues that they help to create.

    Senake Atureliya, Pie Finance

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    Is it really so easy to set up and run a successful business?

    January 19, 2010 by Simon Wicks

    I'm sitting in the lecture theatre of the Royal Institution, listening to the investor Doug Richard, founder of The School for Startups, tell an audience of potential social entrepreneurs the 20 questions that every successful business should ask themselves. The questions cover most aspects of business operation - market understanding, differentiation, industry knowledge, business model, pricing, operational dynamics, people.

    The good thing about Doug Richard is that he keeps it simple. He tries to deal in the realities of running a small operation, is sceptical about big business and the claims of people touting big theories. Moreover, he's interested in doing things cheaply and effectively. It's good solid stuff and the questions are smart and get to the point.

    So, in relation to your market, the three key questions are:

    1) How many are there?

    2) How can we reach them?

    3) How many can we reach?

    It's good, basic stuff that people well-versed in business might nod sagely and carry on - though it bears restatement often. However, the difference today is that this is an event specifically for social entrepreneurs. These are people who might not be "entrepreneurs" in the conventional sense; who perhaps are driven more by values or a charitable principle than by the desire to make profit. So the mechanisms of marketing and sales may be quite alien - and even frightening - to them.

    But the truth is, as Doug points out, no matter how you dress it up, you can reduce marketing and sales to core principles. You need a product, you need a market for that product, you need a business model that suits your product and your market, and you need to price your product correctly. That's more or less it.

    On the way, you get lots of gems. Pricing theory is misleading, says Doug: the way you price a product is to sell it to people. Efficiency counts for an awful lot: look at Tesco - few people say they like Tesco, but they shop there nevertheless. Don't listen to the opinions of friends and family about your product: they will give you a polite answer, not a truthful answer. "Every business needs three people: someone to sell, someone to deliver and someone to count." And so on, and so on.

    Worthwhile? Absolutely. And I'm sitting here thinking "Wow, it's all so simple. If it's this easy, why haven't I started a business?" Ah, that's a much more difficult question to answer and I doubt even Doug would have a satisfying answer for that one.

    Simon Wicks, BHP Information Solutions

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    Necessity is the mother of invention

    November 17, 2009 by Alison Knocker

    I lost count of the number of times my parents told me this rather irritating expression when I was small. However, recently I have met two women entrepreneurs who demonstrate just how true this old saying is. Both have used their skills in and love of cooking to create successful businesses.

    Escaping from an unhappy marriage, Lely arrived here from the Far East with a tiny baby. How was she to earn a living? For the initial few years, she set up a stall in a market, baby in tow, selling culinary products from her native Thailand. Gradually the business flourished. She rented a small shop, and started producing Thai food. The combination of her excellent cuisine and her warm personality, no doubt seasoned with a hefty dose of determination, ensured a steady growth in clientele. First one restaurant, then another opened, and now Lely has a thriving chain, despite the recession, serving excellent oriental dishes.

    Redundancy of her husband, who had been the main breadwinner, was the reason for Sue’s business start-up. She had been a nursery school teacher, but realising that the family needed more money than this would produce, she decided to combine her love of cooking with her teaching skills. Sue transformed her garage at home into a large kitchen, where she could accommodate a small class of students. Cleverly she marketed herself not to the bored housewife wanting to know the finer points of an asparagus souffle, but to those who might not have any cooking nous, or indeed any domestic skills at all. She now has a steady stream of students, such as kids leaving school or uni, or kitchen-incompetent guys, and provides practical, useful guidance at all levels. She also makes it fun. Now there’s a challenge!

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    Words of wisdom from entrepreneurs who have made it ...

    November 06, 2009 by Mark Sinclair

    If you're starting a business, or you've already started one, this is four minutes worth investing.  The video below features some of this country's most successful entrepreneurs.  Their words of wisdom could save you a lot of time and money - or even your business!

    What do you think of the advice they give?  Please share your thoughts. startupdonutbannerbutton728x90

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    Perfect business plans

    November 06, 2009 by Alison Knocker

    If you have an idea for a business and want to progress it, you are probably thinking in earnest about your business plan. If you are looking for outside finance, you are no doubt keen that the business plan will be a great marketing tool for your idea to banks or other investors.

    Years ago, when private equity was still called venture capital, I was involved in funding start-ups. I would look through countless business plans, trying to sort the ‘possible’ from the ‘dream-on’ varieties, with a view to investing in the best. Some plans were back-of-the-envelope affairs, with enthusiasm but no financial viability analysis; some described in depth inventive products, but showed no realism with regard to cost of production; others assumed world domination in a few months.

    But what really put me off was the business plan that plainly had been written by someone other than the people who were going to make the idea happen. However slick the document, with every possible detail carefully analysed in beautiful spreadsheets, if the words do not reflect the essence of the entrepreneur – his enthusiasm, her conviction the idea will succeed, their commitment to the project – then the proposal will lack that essential ingredient that is the reason for making an investment. The basis of our decisions was mimicry of estate agents’ ‘location, location, location’ replacing the key word with ‘management’. Yes, of course we wanted to see that the projections made sense, and that the amount of investment required was adequate and would be wisely spent; that there was indeed a market for the product or service, and that it would be sold appropriately. But the key was always: is this the right person to make the proposed business succeed?

    So if you do use professionals to help compile your business plan, make sure that the final result is imbued with your DNA, and that it convinces the reader why you are the one to turn the plan into the success you describe.

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    Hello Donut Lovers

    September 01, 2009 by Tim Haggard

    Firstly, I guess I should tell you about my break for entrepreneurial freedom…

    My brother and I left the security of good professional careers in June 1997 to buy a pub. Why? Well – it seemed like a good idea at the time, despite the fact that neither of us had even worked behind a bar in our lives! Despite a lack of experience, we raised equity from friends and family, got a loan from the bank and about a year later, bought and refurbished a pub.

    Over the course of the next few years, we turned it into one of the most successful pubs in the area and in the process, more than quadrupled the turnover that the previous owners had achieved.

    A big part of the original plan had been to produce our own beer; and once we had the pub operating well and a good operational team in place, we turned our attention to opening a micr0-brewery. Again, having no direct experience in the industry, we tracked down a consultant who advised us on brewery design and recipes. We converted an industrial unit in Battersea and started brewing. The beers we produced tasted great and sold well, even winning the occasional award! Sadly, the London market was not an easy market for brewers at that time, many pubs were tied and would not accept guest beers and the costs of distributing in London traffic meant that the brewery never did much more than wash its face.

    One of our best sellers in the pub was a shot-sized vodka jelly product, until one day, our supplier stopped delivering. A (pre-Google) search on the internet did not reveal any alternatives, so we set about making our own. I got a recipe from an old friend, eventually sourced the pot and lid and started making vodka jellies in the pub kitchen. They sold well and after a while, we started getting calls from other bars wondering where we got the product from. One thing lead to another and we started selling nationally. Soon, we were attracting the interest of the big pub chains and it became clear that if we were going to have a proper go at it, a strategic investment was required. Nine months later we had a new round of investors, a new patented pot and lid, a manufacturing line in Wales, a storage unit in Liverpool and a full sales and marketing operation in place!

    Over the next couple of years, we sold around 5 million vodka jellies. Sadly though, it wasn’t enough. The pub chains were demanding increasingly competitive prices and the big players in the drinks industry (and boy are they protective of their markets) muscled us out. The impact was sufficient to leave our whole business in trouble and we had to sell the pub to clear the decks financially.

    Licking our wounds with no interest in returning to corporate life, I was contemplating what we might do next when I took a call from a friend, asking if we knew of any good accountants. She ran a PR agency in the area and was looking for a new solution. The door to the new business opportunity opened before my eyes and we jumped in! For a start my brother and I are both trained accountants, plus we had spent the last 8 years running 3 small businesses – I think we had a good mix of technical grounds and commercial experience to make an accounting practice for small businesses work. Haggards Crowther, as it is now called, is now well-established and looks after over 600 clients.

    The entrepreneurial fires have continued to burn brightly, more in me than my brother. He has been keen to keep the accounting practice focused on core products, whereas I wanted to expand into new areas. Thus, whilst I remain heavily involved in Haggards Crowther, I have started work on Start-up venture number 5 – My Bookkeeping Online.

    Launching in autumn, this is an online platform designed to help small businesses keep on top of their bookkeeping. From the outset, it has been really important to me that owners of the smallest businesses with no bookkeeping knowledge can use it…and designing it accordingly has been a challenge! It is under development as I write and it is coming together well.

    Watch this space as I’ll be blogging and tweeting about the progress.

    Other than that, this blog is going to be about small business. No doubt my focus will head off in many tangents in the coming weeks and months, but the primary purpose is to talk about small businesses that are starting up, help with some broad advice and talk about the issues small business owners face in specific industries. Please forgive the occasional rant too!

    Tim

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    Leading entrepreneur says "hundreds of people will tell you your idea is rubbish"

    July 23, 2009 by Mark Sinclair

    Richard Reed - web

    Not a particularly cheery headline for a business startup blog, but it's an interesting observation which we can all learn from.

    Richard Reed is co-founder of Innocent Drinks, a very successful business which brings fresh, tasty smoothies (and food products as it turns out) to a health conscious market in the UK, and now further afield.  I interviewed Richard yesterday for yourBusinessChannel's latest series on business startups.

    It was a refreshingly straight-forward interview.  No business jargon.  No pretence.  No corporate positioning.  I asked pretty straight-forward questions, and Richard gave pretty straight-forward answers.  You see, one of the things that has clearly driven the success of Innocent Drinks is that they are honest and uncomplicated in the way that they talk about their business.  They call it "innocent" language.  And the language reflects their way of doing business - which is also said to be "innocent" in all respects.

    Anyway, we spoke at some length about starting up a business, having great business ideas and such like.  And during this refreshingly honest conversation, Richard said that when you have refined your entrepreneurial idea - the idea which will be the driving force behind your new startup business - be prepared for hundreds of people to tell you your idea isn't going to work. That's right.  They're going to try to dissuade you.

    Richard's advice?  Be ready for people to try to shoot your idea down, but if you truly believe in it, don't listen to them.  Keep going, and make your idea come to life.

    Great advice from a thoroughly likeable, straight-talking and clearly very succussful guy whose business has just received a £30m injection of cash from Coca Cola.

    Oh, and for anyone who feels a bit squeemish about Coke buying into Innocent, I asked Richard about that and got a very interesting reply, which we'll publish soon.

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