Feeds:
Posts
Comments

Posts Tagged ‘start-up’

There’s a dilemma when you are starting a company. There are lots of boring essentials like company formation, VAT, Data Protection Act, employment law and, depending on which industry you are in, a host of other legislation. Yet complying with these doesn’t help you to sell anything, build a customer base or most importantly turn a profit.

It’s incredibly difficult to find the balance between being too gung ho about regulations (with risks starting at inconvenience and ending in prison), or over egging things, with a bigger risk of business failure. Hovering around are lots of professional advisers with fees to match – that’s the accountants, lawyers and consultants. Unfortunately it’s hard for them to be entirely impartial as their business is about charging fees.

Here are my top tips for getting this balance right.

  1. First you need to understand the issue. You need to know what laws may apply to you. Books and the web are the cheapest forms of education along with free seminars from Business Link or professional advisers offering free consultations in the hope of getting your business.
  2. Then make sure you stay legal with the minimum of work and elaboration. Remember your principle aim is to serve customers, not produce a gold encrusted employment or health and safety manual.
  3. Be appropriate. If you work in an industry that is potentially hazardous, then actually health and safety is the top priority. If you are selling cuddly toys over the internet, just make sure they don’t contain dangerous substances or harmful parts.
  4. Until you are cash positive, don’t worry about issues that can wait until tomorrow.
  5. Once you know that the business has a future and you can afford it, start employing the professionals to help.

When you’re starting off, anything that isn’t directly related to making sales or pushing the business forward is an irritant. But completely neglecting other issues can cause huge frustration when you are forced to comply; it can also substantially reduce the value of your business or may even cause its demise.
It’s different if you are well capitalised and have had previous business success. But if this is your first start up, then these tips are well worth a thought.

Chris Barling, Actinic

startupdonutbannerbutton728x90

Bookmark and Share
Advertisements

Read Full Post »

USP is much beloved on the Dragon’s Den. Often you’ll hear Peter Jones saying: “I like that, that’s your USP.” USP, of course, stands for unique selling point (or proposition).

To explain USPs, I’ll tell you a personal story. When I started my first business more than 20 years ago, I went on a high-growth, business start-up programme. The guy who was teaching us about marketing was obsessed with USPs.

Problem was, he was trying to apply multi-national corporate thinking to my small start-up. His approach was totally inappropriate. I was going to be doing the selling myself and he wanted to construct a fake sales pitch for me that followed a big business template.

Glasgow approach

If you’ve been to one of these start-up seminars, you’ll know there’s always some bloke or woman standing there telling you how important your USP is. So how do you identify your USP?

Well, today, you’re going to get the Glasgow guide to USPs. In other words, straight forward, no messing around.

Basically, a USP is something that makes your product or service different. It enables you to charge more or sell more because it separates you from the competition. A USP allows you to you make more money as a result of the competitive edge it gives you.

How do you find your USP? There’s only one way – get people to sample your product or service and listen to what they say. In the words of Gary Vaynerchuk – you “conversate”. You talk and you listen. Listen, listen, listen.

Matter of taste

Making cakes was my first business and the guy who was running the start-up course I went on asked me what my USP was. I simply stuck a slice of cake in front of him, he had a bite and replied: “Ooh – that’s delicious”.

My chocolate cake was vastly rich. It was made of pure chocolate, raw cane sugar, good chocolate shavings on the top, no preservatives, no additives and extremely high quality. That tells you that my cake was special, aimed at the top end of the market. It didn’t look perfect, so I stressed its homemade qualities, giving it a sense of authenticity and wholesomeness, both powerful USPs.

When you’re trying to find your USP, you need to identify something that makes your product, service or business distinctive. How do you do it? As I did with my cake, you should take your product or service and shove it in front of people as much and as often as you can. Ask people what they like best about your offer. You might find that certain phrases and words will be repeated. In the case of my chocolate cake, it was, “My God, very rich!” and “Wow – really chocolaty”.

Ever heard of Kobi beef? It’s the world’s most expensive beef – I think it’s looked after by nuns or whatever. Actually, I’m kidding, it comes from the black Tajima-ushi breed of Wagyu cattle, which is raised strictly by traditional methods. It’s renowned for its flavour, tenderness and fatty, well-marbled texture. Its rarity and great care taken in its rearing are powerful USPs, as well as its flavour and succulence. Its price is another USP (“The world’s most expensive meat”).

In conclusion

Does your business/product/service need a USP? Absolutely. Whether it’s chocolate cake or Japanese beef that you’re selling, if you can come up with something that marks your product and business out as different – as special – you’ve already got an important head start.

Iain Scott, Enterprise Café

startupdonutbannerbutton728x90

Bookmark and Share

Read Full Post »

We’ve recently launched new interactive business website www.inafishbowl.com to help start-ups learn from the experiences of others. Arguably, there’s no better way to learn.

Through an energy-packed mixture of video, Twitter feeds and blogs that feature on the new Big Brother-style business website, we chart the trials and tribulations of three start-up businesses, as their owners share their experiences – the good, the bad and the ugly – in real time.

The three businesses featured are a record label, a bespoke tailoring company and a Mexican food range. Each are finding their way through the start-up maze and sharing their experiences along the way. From naming their business through to frustrating first meetings with banks, the businesses lay themselves open for others to watch and follow online.

The In a Fishbowl project was founded by entrepreneur Toby Reid and is being supported by Midlands-based entrepreneur Andrew Springhall, who says: “So many people go through the process of starting a business – it’s a truly daunting experience. There’s a wealth of information available, but nothing that really provides the chance to learn from the experiences of others in the way www.inafishbowl.com does.

“The aim was to show empathy with the challenges new entrepreneurs face, but also to inspire them and enable them to learn and benefit from an interactive source of support for any budding entrepreneur.”

Taking inspiration from her native land, Marcela Flores Newburn owns and manages Rico Mexican Kitchen. The new business produces a range of authentic, home-cooked Mexican food products that are sold through stores in the UK. Mother-of-two Marcela makes all of the products by hand.

“I’m really excited to be featured on inafishbowl,” she admits. “It’s a great idea and I really hope it will help other new entrepreneurs in the early stages of starting their business.” On the site, Marcela discusses everything from dealing with buyers and distributors at department stores to the reality of running a home-based business.

You can also follow www.inafishbowl.com on Twitter for latest snippets from all three of our entrepreneurs, while Marcela’s posts have been chosen to feature regularly on the Start Up Donut blog, too, so watch this space.
startupdonutbannerbutton728x90

Bookmark and Share

Read Full Post »

Back in the mid-1990s, my company, Actinic, was set up using my own money and some I borrowed from family and friends. My business partner and I then raised £165k from an angel investor, and later a further £1.5m from venture capitalists, 3i.

At the height of the dot-com boom in 2000, we went public on the London Stock Exchange, raising £25m. A couple of years later, the company de-listed and became a limited entity again.

When you are seeking funds, you won’t feel it, but there is plenty of money around. You just need the right formula to tap into. So it’s important to understand the keys to attracting investment – particularly from business angels and venture capitalists.

The challenge is that investors – just like those on Dragon’s Den – receive numerous approaches, but make few investments. How can you make yourself stand out, and get the cash you need to grow?

I’m assuming that you have a workable business, and a well-written plan that covers finance and marketing without boring too much with detail. However, even when you have these, you still have a long way to go.

There are three keys:

  • You must excite investors with the chance to make a lot of money.
  • You must convince them that the risk is low.
  • You must explain how they will get their profits out. This is what they care about. Get it right and the cash will follow.

Incidentally, the way to generate excitement is to provide hard data on the size of market you can address and what margin you can obtain. This must be evidence backed. Simply saying: “we estimate the market at £100m and will take 70% share” without any facts to back it up is a real turn off. But don’t go into too much detail.

Once there is an initial attraction, the key questions will be about the credibility and commitment of the management team and business generally.

The best answer to is to have a great track record. If you don’t, get people involved who do and get experienced people onto your board. This will have a cost, probably in shares. You also need to listen to their advice – no one who is good will stick around if they are ignored.

Investors will also want to be certain of your commitment. Don’t mention any alternative business ideas, because this will be a big turn off. If they put their money in, they want you to be fully devoted to making it grow, becoming profitable as soon as possible.

The next question is whether the business itself is credible. This is best demonstrated by having real sales and customers. In fact, if you don’t already have these, you need to ask yourself some tough questions.

Investors will sometimes ask you to put your house on the line. Personally, I’ve always refused, arguing that I had already taken a pay cut to start the business, risked my career and was utterly committed anyway. Finally, I pointed out that such a high price runs the risk of the directors behaving desperately if things get tough – which doesn’t promote good business practice or the protection of their investment. I’d suggest you sharpen these arguments up, too.

Many people obtain their investment from family and friends. Assuming you know people with sufficient capital, this has the advantage that it’s easier to tap them. The disadvantage is that if the business fails, which is bad enough, you may also face losing key relationships. And I’m afraid to say that if you believe there is no chance of that happening, you probably don’t understand risk and should reconsider your career direction.

I myself borrowed money from family and friends to help get the business going. But I deliberately took the loans on personally, so if the business failed I’d still have to pay them back. And I kept the loans at a level that I would just about be able to pay them off over a few years.

Finding potential sources is the easy part. You can find a list of angel investor organisations at www.bbaa.org.uk, while VCs can be found at www.bvca.co.uk.

Remember, the key lesson is to look firstly at the needs of investors. Only secondly present your need for money and how much sense the business makes to you.

I can’t pretend raising money is simple, and a pre-requisite is having a viable business and plan anyway. We presented to more than 70 investors before getting our first funds. However, if you follow the advice here, your chances will be improved. Good luck.

startupdonutbannerbutton728x90

Bookmark and Share

Read Full Post »

So you’re starting a business? There’s plenty to think about, and you’ll be spinning lots of plates all at once. But one thing you should really have lined up is a smart social strategy. What does that mean? Hear what Louis Gray had to say on a recent trip to London …

Please share you thoughts on this advice. Is it helpful?

startupdonutbannerbutton728x90

Bookmark and Share

Read Full Post »

Issue 1 “We have those sales figures Steve, I just need to go through the paperwork and tally them up…”

How can you boost sales? There are many options, however two obvious ways are: review your current sales process, and develop your sales staff.

The issue

So I arrive at my new clients premises to do the exploratory meeting and see if I can help them boost their sales. First step? Review the process.

In response to a question like “So how are sales going at the minute?” I often get wordy answers which talk about results in a very general way. I enjoy hearing the owners’ perspective on it; it’s good to get a feel for their industry & business from their point of view.

However it’s when I start asking for specifics, “What volume of enquiries are you getting?” that I regularly get a response along the lines of: “We have that figure Steve; I just need to go through the paperwork and work it out…”

The response

It’s been said before, but I’ll say it again “if you can’t (or in this case don’t) measure it, you can’t manage it”

If you’re already tracking your enquiries – great! Be mindful here; are you only tracking this in terms of knowing where your valuable marketing budget should be spent? This is crucial of course, but it would be useful to know how effective you are with each of those leads wouldn’t it?

There are many ways to measure sales effectiveness, but here are some basic measurements that can help build a picture of your current business performance:

  1. Sales
    • a. Sales by number (volume of sales)
    • b. Sales in good old pounds sterling (value of sales)
    • c. Sales Conversion rate = ‘Total Sales’ divided by ‘Total Enquiries’
  2. Sales’ Cost
    • Cost of an Enquiry = ‘Total Marketing Spend’ divided by ‘Total Enquiries’
    • Cost of a Customer = ‘Total Marketing Spend’ divided by ‘Total New Customers’
    • Total Cost of a Customer = ‘Total Costs’ divided by ‘Total New Customers’
  3. Sales’ Value
    • ‘Average Worth’ of a customer = ‘Total Revenue’ divided by ‘Number of Customers’
    • …it’s also worth looking at the average lifetime of a customer.
    • ..and the most popular product choice.

N.B. The above calculations should have specific timeframes. To use the most obvious examples: Weekly, Monthly, Quarterly & Annual.

Interesting to note, often well established companies struggle to provide these figures, though the reasons be different from a start up business: perhaps they have too many measurements (can’t see the wood for the trees) or simply with the passage of time their ‘Key Performance Indicators’ are no longer ‘Key’ anymore!

So you want to boost your sales? You need to lead your salespeople! Current frontline sales-relevant figures are the first step!

Action: Does this relate to you & your business? If so, based on the above, what will you STOP doing, START doing and CONTINUE doing today?

Related Articles: This is the first in the series: “Boosting sales: Things my new business clients say to me” which follows this introductory piece ‘Your new business is exciting isn’t it!? DON’T talk about it!’ See it here: Part 1 Part 2

startupdonutbannerbutton728x90

Bookmark and Share

Read Full Post »

For many Start-ups, the website is an early investment, and for many more an early headache. To avoid common mistakes, it can be good to adjust the way you think about your site. Rather than thinking of it as a project or a tool, think of it as your first employee – a valued member of the team to be nurtured and developed.

Key ways in which a website is like an employee:

  • It has a specific set of tasks to perform
  • It needs a development plan if it is to continue to perform at its best
  • It needs regular updates to stay current – like a training plan
  • It relies on input from various other team members to do its job
  • Not everyone will like it all of the time

A website has a permanent, full time, role in your business: It never ceases to amaze me how many small businesses think of a website as a self-contained project – with beginning, a middle and (even more worryingly) an end. You wouldn’t recruit someone into your business and think that, once they’d signed the contract, their job was complete or that they’d stay exactly the same as the day they walked through the door. Neither should you think the same of your website.

A person comes to your company with some skills and knowledge, but over time they will gain more specific knowledge about your company, and become more skilled as they learn on the job or undergo formal training and development. A website is just the same – however well conceived and delivered, it is only when real people start to interact with it that you’ll know what really works, and what doesn’t, on your site. Through reviewing analytics and undertaking user-testing and feedback, you will be able to constantly refine and improve your website’s performance. Which brings me to performance… you’re likely to set of minimum performance standards for your staff, have you done the same for your website? And, do you have the tools to measure against those standards.

And of course, things change. Think also of a scenario in which your employee’s area of the business is subject to some sort of change (legal, environmental, new product, etc.) – they’ll need to adapt and respond. Your website is no different. Just because it was beautiful when you launched it, it may not be in a new context. What’s more, this is technology we’re talking about. The tech big boys work to a circa 6 month product development cycle – the pace of change is fast and furious. If your website is to stay current, you’ll need to keep an eye out for the new trends, like Twitter, Tag Clouds, etc… and whatever is just around the corner.

But, it many ways it is even better than an employee:

  • It never sleeps
  • It doesn’t take holidays
  • It won’t sue you if you change its role or replace it with a new one

Useful people management techniques you can apply to your website:

  • Write it a job spec
  • Set a basic salary (hosting, support, regular updates)
  • Set a commission plan (invest a percentage of the revenue it delivers back into traffic generation and improvements)
  • Have a weekly one-to-one (update content, check stats)
  • Conduct a monthly review (stats, performance targets, etc)
  • Conduct a quarterly appraisal – consider a 360 appraisal where you get feedback from all users
  • Set a ‘training’ budget – essential updates, spring cleaning, new features

For many businesses, the website is probably quite an early investment – thinking of it as your first ‘employee’ is a healthy starting point – meaning you’ll feel happier with seeing it as an ongoing task rather than a one-off project. For other businesses, particularly ecommerce businesses, your website is more like a team of employees, rather than just the one – and just like a team of people you’ll need to think about the way that individuals interact, etc.

This is even more critical in a Startup. By the very nature of your business being new, you’ll need to test and learn. And what’s more, money is tight at the beginning of any business – if you simply invest and ignore, you’re wasting precious funds. By going into a relationship with your website, based on the certain knowledge that it is an ongoing task, your initial and ongoing investments are money well spent.

So, if you think your web project has come to an end because you’ve gone live… I advise you to think again. I advise you to think of your website as a valued member of your team and to treat it accordingly.

startupdonutbannerbutton728x90

Bookmark and Share

Read Full Post »

Older Posts »