In 2019 the Business Statistics briefing paper from the House of Commons Library reported there were 5.9 million private sector small and medium sized businesses in the UK. The idea of starting a new business in the current climate may seem like a daunting concept, or you may have recently started your own business before COVID-19. In this blog, Jo shares her personal experience of starting up a business and key areas to consider.
Something which has come to the front of many people’s thoughts in light of the COVID-19 outbreak, at the end of this, should I start my own business?
This is probably because some people may be pushed out of work or feel like their current work is no longer for them.
Some 30 years ago when I started my own business and like all good businesses, this was started from my back bedroom and 30 years on, I have what I hope is a wonderful company which I hope I can keep going through these challenging times as I have a team on fantastic staff. Of course there have been bad times and good times, and brilliant times and terrible times and its not easy running your own business. However, I can say without a shadow of any doubt that I have loved most of it. I have never ever regretted setting up on my own.
I would like to share with you a number of things which I have done: some of the mistakes I have made, (of which there are lots of!) and some of the things which have been done well or better than I had expected.
A few practicalities to start with as I set up my business originally as a sole trader. This was because it was really easy to do and there was minimal paperwork. However, this was a mistake as I should have set up as a company. For a start, it gives you more kudos, its far easier to manage from a tax point of view and its really not that complicated at all. Now there is a huge amount of fantastic accounting software around, which makes it easy to run your own set of figures and complete your own VAT returns. There are plenty of really easy to use options for you to have a look at.
Set up the company first of all, be willing to fail, you will need to take some risks, of which I have taken too.
I remember giving my first personal guarantee and it was very daunting. However, my bank manager at the time said to me that if I don’t believe I can do it, why should I be leant any money? On reflection, that is a fair enough comment as you need to share the risk and rewards. Sometimes you have got to be willing to fail, as you will without a doubt learn from your failures as much as successes.
Getting clients is always a challenge. When people ask how I built my business, I can honestly say that I have been to every networking event you could imagine. I have a phrase that I have drank several oceans of Chardonnay! It does help you to build a reputation and a good business, if you are out and about talking to people, listening to people and trying to understand how you could help each other.
Consider what is a niche and the world is changing all the time and I am certain that COVID-19 with result in a number of new businesses and opportunities. Particularly as using the remote technology we have all become very familiar with. You need to find what your niche is and become a consummate professional in that area.
Be flexible to what people want and what you can do. Decide what your business proposition is: are you cheap and cheerful or expensive and bespoke? It is important to find what you can offer and make this clear in your marketing message.
Look after yourself. When I set up on my own, I had the view that I was a mother of young children and I never see them and I’m always working for other people and I’m not making any money for myself. I could make a lot more money for myself and I would have a lot more time for my family. However, I certainly had more money but not straight away and it has taken a long time to build this up, but I have never had more time. What I have had is more control over my time, so I wanted to do things with the children or my family, I could do. However this didn’t stop me working ling into the night or over weekends. I don’t think that any entrepreneur really goes on holiday, particularly with the technology we have now. I used to call the office every day, but now you are never far away from not only your office but your customers and suppliers.
Get a good accountant – there are lots out there but only a few good ones. I mean an accountant which speaks English as opposed to fish! You need to be able to communicate. Do not think that they are going to help you run your business, but they will help you to find things which will improve the performance of your business. If you can get a really good accountant, they can also act as a mentor. If you cant find a good accountant you feel could be a quality mentor, then look at getting mentor as well. You do need someone to help you as you go though this process. You need someone to talk to, cry on and ask what are you going to do next.
Bill daily – I have never understood why businesses bill on a monthly basis, some don’t even do this! I think you should bill daily and where possible within your terms and conditions, make payments on receipt. The best thing about putting payments on receipt is that you can then start to chase the money within a few days. I have always said that I don’t want to work with people who don’t want to pay me.
Find a business which helps solves a real problem and be somebody different from the rest. I know this is difficult to do, but there is a way to find what you can offer what other people haven’t got, if you really think about it.
Leadership requires vision and as your business grows, you need to surround yourself with people who are better than you. This can be very difficult, not just because there are plenty of people who may be better but I was frightened. When I did start recruiting people who I thought were better than me, my business grew exponentially. Don’t be afraid to admit your weaknesses and find those people who can help you, because they know more than you do.
Ensure that when you are engaging with clients, depending on what your service is, you must get signed terms and conditions. If things do go wrong, at least you have a chance of enforcing the agreement, even if this means litigious action.
Protect your IP – I know we are a sharing society and I am happy to share, however if you create something so special - make sure you can at least register it.
Never be afraid of competition - In fact, I quite like competition as it gives you the opportunity to show what you can do that is better and different than somebody else. Welcome the competition, even if sometimes you may have to work with the competition as you could come up with something that really has attraction.
Create and build your contact base – I mentioned earlier about networking and although you may get fed up with it, but you have to keep going and build up a strong contact base that will see you through the good and bad times. I have over 6,000 contacts on LinkedIn, however this doesn’t mean I have met everyone! I do find that, even more so in the current situation, your contact base is a huge source of support and possibly even future business.
Most of all I would like to finish with something very important to me. Some of you will know my values are very important and one of which is have fun. Don’t forget to have fun! - This is a journey and you need to enjoy it.