I’ve been having a lot of fun recently working with some serial entrepreneurs – on their business strategies and helping them get start-up funding for their next new ventures. These founders have already started, managed, grown and sold successful small businesses in the past and have the appetite and know-how to do it all over again… And again. They are pretty awesome.
So, how do they do this? How do they land on a good idea and make it a reality? How do they spot when to get financial help, when to spend on expert advice and with whom, how much to spend on marketing, PR and Social Media, which manufacturers and suppliers to use and when to take on staff? I can tell you how – they set themselves realistic expectations and aren’t afraid to take out finance in the start-up phase to give them the boost they need to get going.
I’ve heard many a small business owner say – “Oh, I don’t want to borrow any money – I’ll keep on working full time and put what I can into my idea and take it from there”. The problem with this is that many great ideas “seize the moment” and are the answer to current business or social problems or indeed current phases/trends. If you wait too long, the moment will have passed and you will have missed it.
So, how do you set yourself realistic expectations? I believe in these 5 golden rules:
- Know your market; know your customer; know your business – this is the KEY. Successful entrepreneurs know exactly who they are selling to and what those customers want to buy. Get that right and you have your business.
- Have enough cash to set up – take out a Start-up loan or other means of finance so that you can do what you need to do in the start-up months. Start-up loans are unsecured and each Director can borrow up to £25K.
- Take time to do a proper Business Plan and Financial Forecast – pay an outside consultant to do this for you if necessary as they will accurately capture your projected order book and record all expenses. There may be hidden costs that you might have overlooked that would give an unrealistic margin expectation. To have an independent view adds great value.
- Monitor your expenses and spend when you can afford it – we all know that “Rome wasn’t built in a day”, so make sure that you have a sensible roll-out plan in accordance with your business plan. As revenue comes in and grows, then fixed expenses can be taken on.
- Be confident, resilient and enthusiastic – if you don’t love your business and have the staying power to make it succeed, then it is hard for others/employees to feel the enthusiasm.
So, back to my entrepreneurs. They have got it and it’s this realism that will make these small businesses grow, at pace, to become buoyant, lucrative and successful future companies.