Growing a business isn’t easy, but experience has taught me that one of the keys to success is to set yourself apart from the rest. Thankfully, it doesn’t have to be expensive.
You want the product or service you sell to become a real hit among your target market, but do you really know who buys it? There are many factors to consider and these could change with emerging trends. It’s important you gain an understanding of who is buying and what the biggest driving forces are that make that someone choose you, your expertise, your brand, your product or service.
The internet is a low-cost billboard for you to showcase your business and perhaps sell your products and services, but the prospect of hiring a web designer can be daunting. Why not take a DIY approach? The good news is that a modern range of software is demystifying web design. There are simple, drag-and-drop visual web design programmes not a million miles away from an office word processor. Some packages boast even more potential, producing feature-rich websites without using any HTML coding. A professional-looking site can be produced and online in a matter of hours, even if you have no prior experience – and without a hefty bill for design and build.
Consider placing an advert in a targeted publication so you can be seen by the right people. Consider your budget – is radio or TV a possibility? How about adverts in mobile phone applications? If you need to keep your costs low, creating your own advert can still work wonders. Distil what you want to say and make it an attractive proposition. Decide what your brand values are and keep messages within brand guidelines. Focus on an easy-to-remember call to action.
Cut out the middle men by producing designs yourself and sending them straight to a professional printer. Some flexible design and publishing programs are ultra user-friendly. Templates offer a quick way to make polished materials and your designs can be shared in a professional, compatible format (eg PDF) for accurate printing in any pro print shop.
First, thoroughly check text for spelling and grammar mistakes. Use software to help, but remember to check for errors with the naked eye, too. There are proofing tools built into popular desktop publishing packages, design products and word processors, but they might not always pick up correctly-spelled words used in the wrong context.
When you decide to produce your own poster, advert or other marketing materials, remember that a clear message will have more impact. Don’t use graphical effects for the sake of it or use too many different fonts, sizes and weights, otherwise the design will look unprofessional. If you have a coloured area or image as a background, you might want it to go right up to the edge of your page, but headlines, text, logos and other important information should be places well inside the edge of your design. What is it you or your customers like about other advertising you consider to be effective? Bear these points in mind when you work on your own materials, whether editing a design template or creating a design from scratch.
Dale Cook, Serif
Business and enterprise minister, Mark Prisk, carried out his first day of “work experience” at small firms this week. This is possibly just a PR stunt, as he has already run his own business and surely knows the score, but his knowledge may be rusty and there are some vital lessons he should learn.
Here are five things he should remind himself of during his time with small firms:
1 Time is precious. Small firms are often run by one or two people, who, alongside keeping the business afloat, clearly don’t have time to battle their way through reams of admin and study the small print of new legislation. Hopefully Mr Prisk will be reminded to keep red tape to a minimum during this Parliament, and make sure any new requirements are accessible and clear.
2 Every business is different. There is no ‘typical’ small business and so the new coalition Government should avoid a one-size-fits-all approach to policy. An MOT garage may have very different needs to a social enterprise caring for disadvantaged children, but both are important to society and neither should be ignored when decisions are made at the top.
3 Small businesses create jobs. If given the environment in which to flourish, for example access to finance and low taxes, many viable start-ups will soon grow and play their part in stamping out unemployment. At a time when we are witnessing record unemployment levels, it makes sense to help small businesses become growing businesses, by ensuring the support is there if they need it.
4 Innovation flourishes in smaller firms. As they aren’t as tied down by bureaucracy and hierarchy, most small firms tend to be more innovative than their larger counterparts. While creative people must be self-motivated, the coalition Government should do all it can to encourage investment in, and the development of, new ideas.
5 There’s no rest for the small business owner. Running a small business is like working on a never-ending election campaign. Particularly in the early stages, small business owners think about their work 24/7, and once they have pleased all the customers, negotiated with suppliers, and got all their books up to date, an early night is a rarity. Mark Prisk and his team should recognise the role played by these dedicated people, small business owners and employees alike, in keeping the UK economy going.
What essential lessons do you think Mark Prisk could learn while he’s making the tea?
Kate Horstead, business writer and member of the Start Up Donut team
There are two ways of starting up a company. The first is to take an existing business idea, and do it better. Preferably you will concentrate on an area where the competition is limited or you have some existing connections.
The second is where you come up with an idea that’s completely new. People think that it’s the only way to make a real fortune, but that’s not true. It may come as a shock, but Bill Gates became the world’s richest man largely by improving on the work of others. He wasn’t the leader in new technologies, but he was close behind. And he did things very effectively.
Microsoft didn’t invent the Windows and mouse interface. It was invented by Xerox at its research labs. Microsoft didn’t even produce the first commercial Windows-based computer. That was Apple with the Lisa. But it did get its timing right, do a plausibly good job and market the product very well. The rest is history.
The problem with developing a totally new concept is that it’s totally new. You are not only selling the product, you have to sell the idea too and educate the market. Even if it would sell, it’s more than twice as much work. If you have all the capabilities you need, with limited resources it is hard to succeed. And it’s even harder to recover from a failure.
The world economy is driven in the long run by breakthrough products. But for your own success, it’s worth remembering that the odds are greatly improved by exploiting an area where a market already exists.
Chris Barling, SellerDeck
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
There was much to be inspired by at the 2009 National everywoman Conference last Wednesday, but the thing that jolted most of us into unprecedented awe was an animated speech from Allegra McEvedy MBE, founder of healthy fast-food restaurant chain Leon.
McEvedy, instantly deriding the term ‘celebrity chef’, launched into a condensed story of her life, endearing us with her account of a somewhat rebellious and directionless youth marred by the death of her mother, which she spoke of frankly and without self-pity. This was followed by some time gaining experience in the restaurant industry, a stint in the United States, and some botched attempts at setting up a successful business, before finally finding success, fame and, most importantly, happiness, in the much-lauded Leon.
What we like about Allegra is her ‘real-ness’, despite the professional success, despite the MBE, and despite the Observer Food Monthly Award that she was afforded just months after opening Leon. She is warm, funny, full of life, and doesn’t seem to see herself as anything special. To most of the delegates, though, keen to make a success of their own businesses, she is pretty darn special and has an awful lot to teach them.
McEvedy reminds us that it is fine to be human and to make mistakes, in both our personal and professional lives, and that our achievements will be better for it. Openly and with humour, she puts forward the view that a successful entrepreneur is someone who has trialled and erred, and picked herself or himself back up again when things have truly hit rock bottom. Although no longer strictly an entrepreneur herself — McEvedy gave up her role in early 2009 to focus on writing and media work — she was keen to pass on her pearls of wisdom to the entrepreneurs in front of her.
Leaving the stage to a tumultuous round of applause, McEvedy left us with these top business tips to consider:
Do you agree with these tips? What would your top tips for start-ups be?
Such a big part of growing a successful business is ensuring that you’re always thinking of new ideas or making improvements to your current business. But as many small business owners know, coming up with a great idea is easier said than done. If you’re someone who struggles with creativity or can’t easily prompt a brain wave, watch this show to get ideas from a brand which is growing rapidly and improving constantly.
A popular method of tracking and recording ideas is to write them down – or to “always have a notebook with you”. Tell us, when (and where) do your best ideas come to you?
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!
Monday morning saw an early start for your intrepid blogger and a trip to the BT Tower in London for the Small Business Week launch event. The Business Pulse survey results were revealed and were duly followed by a series of talks from the likes of Lord Digby Jones and Peter Jones.
The recurring theme of the talks was that of adaptability and innovation. During the recession, innovative small businesses have adapted to survive; they had to, and will continue to do so as and when we climb out of it. But what of innovation? What does innovation mean to those at the forefront of helping start-ups come to fruition?
Peter Jones was the most outspoken on such matters. “Not a lot of people know what innovation is. If people with a small business want to innovate, hear this; innovation is basically doing things better than your competition”. Television's highest profile Dragon spoke of the lack of skills training in the UK and how this is inhibiting innovation. To highlight the sorry state of affairs, Peter Jones explained how the first ever academy for training entrepreneurs with the required skills was set up by himself a year ago. Not so much filling a gap in the market but plugging a gaping hole in the country's skill-set.
“The skills necessary to start a business–we don't teach them in this country. I started the first National Enterprise Academy and boy was I shocked–the first–only a year ago. We never had one. We don't have any academy that teaches enterprise in Britain apart from mine. I think that sums up where we are.”
“We need more practical skills resonating down to seven and eight year-old children. That's where we need to start. We need to be reading them books, not about Jack and Jill. We need to be reading books about Jack who starts up his flower shop. I read to my kids and I make them up.”
So the education system is holding back the skills and stifling innovative entrepreneurial growth and we need a reappraisal of how we stoke the fires of inspiration for our innovative entrepreneurs of the future. Now if you excuse me, I am just perfecting my Dragon's Den pitch for a children's television programme, 'Little Bo Peep and the impending tax return deadline.'