Tips for surviving your first year in business
Bdaily has entrepreneurship in the spotlight in our latest focus week. PayasUgym founder and CEO Jamie Ward advises how to become a success and avoid failing in the first year.
Maybe it’s just because I entered the entrepreneurial world relatively recently but it seems that ‘start-up’ is a buzz word in the UK at the moment. Driven by recession the government have an obvious motivation to encourage young bright talent to start their own businesses in the UK thus encouraging private investors to get their money back into the system. Not that us entrepreneurs should complain given the tax incentives making investment risk profile more digestible to the guys with the fat wallets. The old cliché of the majority of businesses failing in the first year unfortunately still holds true and if you plan on starting out on your own here’s some tips that I hope will help in your first year (some of which I wished we had known at the time!):
1. Plan ahead: Unless you’re in a privileged position then you’ll most likely need every penny you’ve got to a) fund the business and b) fund yourself whilst you run the business. So this means you’ll need every penny you have to allow yourself as much time as possible and the best fighting chance to survive. If you’ve got the visibility and you can start planning early then if possible get a contract job that allows you to earn money quickly and bulk up the bank account. When you start fulltime on your business immediately cut out all the extra expenses in your life. If you have a repayment mortgage see if you can drop to interest only (I did). In my experience a couple of hundred quid extra a month can make a huge difference.
2. Set realistic goals: A big mistake is setting yourself unrealistic targets in the early stages, especially if you’ve got investors involved. Aggressive targets can lead you to be unnecessarily demotivated when you end up missing them and possibly lead to loss of confidence from investors. The first year is all about proof of concept. Will customers repeat purchase our product? Do customers enjoy using the service? Delivering an ROI or proving you can generate a sustainable Cost per Acquisition are KPIs that can often not be delivered on.
3. Get your investors working for you: Not all investors will have the time or inclination to help out the businesses they invest in but some are very keen to stay close to see how their funds are being managed and if they are up for it then take all the help you can get. Don’t be shy on listing the 10 objectives you have to tackle that week and e-mailing your investors to see if they can help. If any of them want to take up a non-exec position then make sure you have clear objectives for them to deliver and not just turning up to a meeting and brain dumping on you. My personal experience has been brilliant and nearly all of our main investors help us out to overcome the challenges we face on a weekly.
4. Network with other start-ups: This is something we were very poor at doing in the early days. I wish we’d been more pro-active from the start as we now understand that the benefits that can come from speaking to other business in a similar position can be huge. Forums, events and entering early stage awards are great ways to get into the start-up circles. Every other founder has a long list of challenges and a quick coffee can often lead to good advice and even a future partnership.
5. Speak to your early customers: Probably the best bit of advice I can give is to speak to your customers as early as possible. Keeping an open dialogue with customers is the best way to accelerate your strategy and end up with a model that works. At this point I often see seasoned entrepreneurs advising those starting out to be open to change; the idea you started with may not be the one that ends up making it. But I find the motivated few that are willing to subject themselves to the stress and financial risk by starting their own business tend to the most flexible strategic thinkers when it comes to making their business work!
6. Finally… Keep motivated & don’t panic: It will always take longer than you expect to get the results you’d hoped for. Never make a hasty decision try and ‘turn around results’, this can often be costly. Always take the considered approach to your business even when everything seems impossible. To survive you need to be the kind of person that is motivated by setbacks because there will be plenty. Remember no-one’s going to pat you on the back and say ‘good job’ anymore!
This was posted in Bdaily's Members' News section by PayasUgym.com .