- Business and Employment
Starting Up Your Own Business
All You Need Is Confidence and Self-Belief
This is a lens where I can recount the trials, tribulations and successes of the small businesses I have run. It is designed to encourage anyone to start a small business - you don't need a pile of cash you just need an idea (doesn't even have to be that good or unique as you can evolve a business once it's started) but what you do need is confidence and faith in your own abilities.
And the best thing about running your own business is the freedom - sure you will work hard (probably harder than you ever have before) but with that hard work comes the ability to control what you do and when.
Where's My Money
The Inspiration Behind This Blog
I decided to start writing about small businesses after several conversations I had in quick succession (coincidentally) with some mums; they are all, or were, professionals such as lawyers and accountants but had given up work some years ago to raise their children. I'm a great believer in caring for you own children - it's a start in life that they simply won't get from the best nanny or most well-meaning grand-parents. You can ensure they have the values you want them to have, behave in the way you want but, most importantly you get to really know and understand your children and give them the strongest emotional foundation that will support them through the rest of their lives.
But let me get down off my soapbox and back to the point...
All of these once-professional women now have children about to leave primary school and are wondering what next? They all want fulfilling lives, after all there is only so much lunching, shopping and exercise that you can do in a week, but the problem seems to be a lack of confidence. There is also a feeling that there is ageism in the workplace and that companies would rather employ a young person than a mother returning from a career break.
I have to say that has not been my personal experience and older women have so much to offer in terms of skills and experience that I am truly saddened that they feel somehow left on the scrapheap in their late forties.
Hopefully, this site/blog will inspire some of you (slightly) older women out there to use your skills and experience to start your own business.
First Things First
Most people thinking of starting a new business will have a good idea of what they want to do. After all you want to be doing something you love or that you think will make you money – and hopefully, both. But before you get carried away with a dream take some time to seriously research your idea.
Ask yourself the questions:
* Is my product or service something people want?
* Does the product or service fill a gap in the market?
* Is the market already saturated?
* What can you offer to differentiate yourself from your competitors?
The reason so many new businesses fail is that the business plan (if there was one) was faulty in the first place. It is one thing knitting jumpers, for instance, for a hobby but another matter to do it on a commercial scale and market the idea successfully. There are some great small businesses out there that do not get the custom they could if they invested more time and effort in marketing (notice I don't say more money, as it is not always a case of more financial investment being needed, rather more focussed effort on selling your product). And I know this from personal experience when my first business had a great product and great feedback from customers but just not enough of them.
When you are researching your market, never rely on friends and family for feedback. They invariably want to support you and not be too critical but at this stage you usually need someone to be brutally honest about your business idea. Friends and family's best intentions will not help you make the best decisions about whether to embark on a business.
So where can you get good advice?
Well there are plenty of good websites and forums aimed at small, startup businesses, including government and tax websites for the nitty gritty (you can see a list below). Most of these offer good, impartial advice, but do watch out for some forums where many of the members are just trying to sell you a service (now there's a business idea!)
When you have done your research and are still convinced that your business idea is a good one then you have to consider the finances. Even if the business will be a service business, such as a home-based, consultancy that will require minimal startup costs, you will still need the essentials, such as a salary and advertising/promotional costs to get those first clients.
If you are not currently working then a small salary may be acceptable at first – if you are lucky, you may have a redundancy payment to live off for the first few weeks or months. But what if you have a well-paid job that you are considering giving up to work for yourself? I have often heard it suggested that you should try and start up the new business while continuing in paid employment – this may be an option if you work part-time but for those in full-time work it can be extremely difficult to find the time to put as much energy into the new business as you should. Od course, it really depends on what you do now and what the new business is so only you can make the decision on whether you can combine a full-time employed role with the startup phase of your business.
I tend to think that it is much harder to give up a well-paid job to start a business than start up when you are unemployed; the risk of losing the regular salary and security (not to mention perks such as private healthcare and paid holidays) is, understandably, a very real concern that has to be balanced with the potential gains of running your own company.
So You Have Your Idea But What Next?
There are several great ways to test the waters for your idea without investing too much, financially or emotionally. If you sell a product try it out first on Ebay or Amazon, or Etsy if it is a craft or artisan product. See what sells best and take note of feedback from customers. Actively seek feedback by offering an incentive to rate the product or experience. Learn from similar companies that are successful and be prepared in the early days to hone your idea and even make radical changes.
Of course, you will be emotionally involved with your products, especially in the early days of your business and especially if you make them yourself, but try and view each product dispassionately. If it doesn't sell or gets poor feedback then you either have to improve it or drop it. Ask yourself honestly why you are really in business – the answer should be to make money so anything preventing that from happening has to change.
Setbacks are just another learning experience (that really is true) so don't be down-hearted by the setbacks you encounter – there will always be some, but they are just a stepping stone to a better business.
Once you have learnt what sells and what people want then you can start to think about your own website and promoting your own brand. You will then be armed with all the information you need for a website and will know what is important for your customers. Many companies waste time and money having a website built only to find out that it does not focus on customer needs because these weren't clearly enough defined at the outset.
Whilst a good website is essential for growing a business, you may be surprised how many small businesses thrive in the early days without one – or with a single page web presence, especially when supported by a good social media presence.
When You Are the Brand
If you are embarking on a consultancy business then you may already have a network of contacts that can help you get started. Indeed, many people leave permanent employment knowing they can offer competitive consultancy services to businesses they already know. If you are in this situation just be aware of any clauses in your employment contract that forbid you from poaching customers from your previous employer. It is also worth sounding out contacts before assuming they will take the services of a freelance over that of a well-established company with whom they have a track record. Many companies are quick to complain about their existing service but less quick to leave the security of a trusted relationship they may have had for many years.
But what if you don't have a network of contacts because you are embarking on something new – you are then essentially in the classic Catch-22 position of finding it difficult to secure a client because of lack of experience, but not being able to get the experience you need to secure a client in the first place. This is where internet workplace sites like elance, odesk or peopleperhour can be useful to start building a reputation as a professional freelancer or consultant. These sites are not perfect and you may find that to get the early contracts you have to accept a lower fee than you expected but they are a springboard to greater things.
As a freelance or consultant you are, effectively, the brand that you are selling so get a professional photo done, write a professional biography and, if your aren't already, get active on LinkedIn and other social media networks.
Useful sites for the legal and tax stuff - And some just for general info and advice
Is Your Low Pricing Preventing Growth of Your Small Business?
Everywhere you look there are special offers, discount vouchers, half-price deals so it can be tempting as a small business owner to think that the best way to get more customers is to cut your prices; the argument being that if you do indeed secure more customers that the business will still be better off than having fewer customers. And, indeed, it is an argument that pays off for some businesses – the "pile 'em high and sell 'em cheap" brigade. But if you are not in that type of business, if you and your potential clients value a quality product or service then slashing prices can only damage your burgeoning brand.
After all who would want to employ a lawyer or accountant or any other professional service on a cut-price deal?
Yet many small businesses, especially if they are struggling to grow, stick to this high-volume, low yield approach and believe that is the way to grow their business. But what that approach is actually doing is positioning the business as providing a low quality product or service. Worse than that you if your pricing model is cutting profits to the bone then you are not actually pricing for growth. Take a long hard look at your figures and your pricing model – one of the biggest mistakes a small business can make is to under-price their product. So if you are in this position now is the time to act – don't wait until your customers view you as a low-cost, low-quality business. Striving for real growth rather than just ticking over can reap much bigger rewards.
Of course there are examples of hugely successful cut-price businesses (Poundland, Lidl etc) but these tend to be major players not small, start-ups. If you offer a truly unique product or service you probably already have the ability to grow relatively easily but if you are entering a competitive marketplace (and let's face it for all the marketing blurb describing "unique" products or services most small businesses are entering a market in which they will have to compete with better-established businesses) then you need to know how to compete. And maybe this is the biggest hurdle of all.
Many new business owners know and understand their product, they know about advertising and marketing but don't always know how to grow their business in the long term.
The essential factor for long-term growth is to use an approach that:
• adds value for your customers
• brings value into the business
• is scalable through the use of technology automation
But just what does this mean in practise?
Well one of the best ways to give your customers better value is to focus on the service you offer rather that the price. We've probably all made bad purchases in our lives but it is the reaction and approach of a customer services department that will determine whether we use a company again. Take, for example, a purchase I made recently for a special birthday present. I ordered online and paid (significantly) extra to have a guaranteed delivery date to be sure it was ready for the celebration. But, guess what? It was not delivered on time. Of course, I was annoyed – I had to go out and buy another present but what will make me use that company again? My first telephone call resulted in an immediate refund of the cost of the item and the cost of delivery but they still delivered the item. So it arrived late but was free! Now that is good customer service, and, yes, I will use that company again. Of course this item cost less than Â£50 so it was a relatively small sum for the company to sacrifice for the sake of good customer relations but nevertheless it is an example of what to aim for.
So the plan for long term growth of a small business is relatively simple:
• Use leading edge technology
• Create a growth strategy with a clear schedule
• Define the company vision (what is important to you)
• Employ people who can implement your vision
So when you are building your business think very carefully about your team and your company philosophy. Don't focus exclusively on the bottom line but think about what level of service you would like to receive in a perfect world. A small business isn't just about the figures, of course you cannot ignore your budget and finances entirely, but your accountant is there to keep the finances on track. Use technology where possible to optimise not only products and services but also the customer relationship; if you are proactive in dealing with problems people will notice that and comment on it – they will tell their friends and a good recommendation cannot be bought.