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Blog posts tagged business decisions
Start-up lessons from the World Cup Bid failure
December 03, 2010
So England has lost the bid for the 2018 FIFA World Cup. As soon as the result was announced, someone on my company (Actinic) forum posted that they were really pleased. As a result of the failed bid, a new stadium and 2,500 houses wouldn’t be built a couple of miles from their front door.
It did get me to thinking about some of the lessons start-ups can learn from this whole tale of woe. Often what is a disaster for one person is a blessing for another, and things aren’t always what they seem.
Firstly, going for a big win is a dangerous strategy. Think of the bid team. There were years of work and further years of excitement. Then suddenly it’s all over and they are out of a job. It’s the same way if you focus on landing one big contract when you’re starting up. Generally, it’s best to aim lower first, then you can gather some momentum before finally going after the bigger fish.
While there will be howls for several months to come – and no doubt the FIFA voters can look forward to many years of entrapment and hassle from the British media – there’s probably a big lesson about messing in the political field. It’s certainly the case that some decisions in business are not made for rational reasons. It’s important that when you’re starting a business you ensure you understand the area you are targeting. If connections are critical and you haven’t got any – leave the field to others.
Sometimes the loser is the winner. Certainly for years, winning the Olympics was almost the kiss of death for a nation’s economy. In the same way, there will be contracts that we lose that turn out to be a blessing in disguise. It’s important that when we lose, we can pick ourselves up, quickly get over the disappointment and move on to better things. In fact, if you don’t have this kind of resilience, maybe you’re not cut out for starting a business. On the other hand, if you know that this is a feature of your character, then congratulations, you already have one of the critical success factors in place.
Chris Barling is CEO of ecommerce software supplier Actinic
Rules of thumb for starting a business
September 24, 2010
I am sure we have all heard the expression “rule of thumb”. I am also sure we can all relate to decision-making based on these rules. In a past role as an IT director, the rule “never be biggest and never be first” proved true on numerous occasions, some of which were when I didn’t follow it.
Rules of thumb based on our own experiences can be useful, but can equally be dangerous. Of course we can conjure up a rule to justify virtually anything. The choice between “too many cooks spoil the broth” and “many hands make light work” springs to mind in this context.
So with that caveat, I present my four rules of thumb for starting a business:
1 Don’t just plan to compete on price
It amazes me how many people plan a start up, especially selling online, where they intend to undercut everyone else. The only way this can work is if you have something that makes your costs lower than all of the competition, for instance, by having a special relationship with a supplier that ensures you receive the best prices. If you don’t and stick with that strategy, you will go out of business, overwhelmed by all the new entrants pursuing the same strategy as you, and by those that have a cost structure that enables them to succeed.
2 Do something that interests you
If you are good at something, you tend to enjoy it. If you enjoy it, you tend to be good at it. Starting a business is bad enough without being involved in something you know nothing about or worse still – hate.
3 Aim for happy customers as soon as possible
Until you have some happy customers, you only have a theory. Once you have some happy customers, you have a business. Some people who deep down in their heart are unsure about their idea postpone the day when the customer meets the product. In contrast, you should make that day happen as soon as possible. If it’s not going to work, the sooner you know, the better.
4 Don’t spend what you don’t need to
Money is the most precious resource when starting a business. You need to focus this resource on finding customers and giving them what they want. Everything else should be kept to a minimum.
These are my top rules of thumb for starting a business – what are yours?
Chris Barling is CEO of ecommerce software supplier Actinic
The importance of family and friends when starting a business
June 18, 2010
I would like to look at an aspect of starting a business that isn’t often considered. Mostly discussions are about finance, marketing, recruiting a great team, VAT, legals and all of the other stuff of start ups. But most people need the support of family, friends, and partners. Start ups are hard, and you must be sure that everyone is with you, everyone is supporting you, and everyone understands what you are doing.
My decision to start a new business was made jointly with my wife. Although she’s had limited involvement in the management, she was a full participant in the original decision. And as a result, she has supported me in every up and down since then, which has been a real help. Similarly, my sister and a friend both lent me money when we had an early cash flow crisis. They wouldn’t have done this if they hadn’t been taken on the journey beforehand.
And that’s the rub. If people close to you aren’t with you, they may be a source of discouragement. In the extreme, broken relationships can greatly increase the chance of business failure. I’ve actually seen this with a friend, where they ultimately ended up with nothing. On the other hand, constant encouragement and reassurance can be a real help – as can financial support.
If you start a business, it won’t only affect you, it will impact those close to you as well. They deserve to be told what that will involve and to be consulted for their opinions. Do this, and you will increase your chances of success significantly.
Chris Barling is CEO of ecommerce software supplier Actinic
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