smallbusiness.co.uk: Helping your business think big

When I sold my venture capitalist firm in 2000 and I was asked what tips I had for start-up companies, my initial response was, ‘Just don’t do it!’

In my case I had no option – I was fired and then found out I was unemployable, but many of you are different because you chose to start your business and become an entrepreneur.

So here are some tips that I’ve learnt from bitter experience as I started with no money, one telephone and a small turret office opposite the Old Bailey:

1) Push yourself

When you’re a one-man band, keeping motivated is a real problem, as if you don’t make that phone call no one else will. But to keep making calls and arranging visits, many of which are wasted, is tough. You need to have a thick skin and keep going, as all it takes is just one lead to change things.

The trick is to write your time off as experience – it is never wasted, no matter how demoralised you are.

2. Time wasters

This could apply to any business or any salesperson, however large the company, but in a small business there
are people out there who will exploit your relative weaknesses.

My tip here is always try and put some deadline or price on your work. I was an adviser raising money for companies. Despite being broke, I never took on a client without some upfront fee. If they pay you, you have some commitment from them and this is a key way to deter pure time wasters.

3. Flexibility

I’ve lost count of the number of times I have met successful start-up businesses that started life as one thing and ended up as another. This ties up with my energy level point – if you are out there talking and meeting people, you
start to get an idea of what they really want and what price they are willing to pay.

The key advantage for your small business is that you have no baggage, no infallible systems and no head-in-
the-sand boss. You can do things big businesses can’t. This may be working at inconvenient times including weekends, small order quantities, hiring people by the hour and not the day – you get my drift.

4. Cost structure

Too much penny-pinching may give your client the wrong impression. Working from home may be ok, but it’s no good sitting round your kitchen table if you have a client meeting.

The flip side of the coin is you don’t need to spend too much on expensive brochures and other stuff, particularly as the web is now ubiquitous.

Where possible, outsource as much as you can. Concentrate on your strengths and get other people to deal with things
like VAT returns for you. This doesn’t mean being lazy – it just allows you to make the best use of your time. When you come to expanding your business, try to take on the best you can possibly afford.

This may mean you have to cut your salary to the bare bones, but the absolute key to any business development is hiring the right people. If possible, use other incentives such as share options or even flexible working to help land the right person.

5. Get advice

I am a massive fan of the right business advisers – I wish I hadn’t been so arrogant in the early days of my business and had taken soundings from people. I know one entrepreneur who has a shareholder base to die for, simply because she was brave enough to ask senior businessmen and women to back her.

The one thing successful people will often do is help small businesses if you ask them to help you. It may require a lot of flattery, but it works.

Remember to know your weak spots and compensate accordingly. In many cases this may be the accounts and numbers side of your business, so find a good accountant and use their advice on a variety of areas, not just on preparing the numbers. This may be on pricing or payment loans – a key part of any business.

6. Get investment

Today there are a mass of employment grants, development grants and equity capital available for small companies.
Many organisations have been set up by the government specifically to help small companies, so don’t think that investment is only available for bigger businesses.
There are also a number of tax breaks, such as EIS, for individuals who invest in your company. Use them.

Finally, the banks, even today, will lend
on the Small Firm Loan Guarantee Scheme.

Check it out.

7. Enjoy it

If you are on good form, this permeates through all aspects of your business (and life, for that matter). So make sure you fit in time for the family and hobbies like sport.
I used to get bored at about 4pm, being on my own for most of the day, so I went and did some work for a friend in his company. It paid me something and had nothing to do with my business, but I came home smiling every night.

Good luck.

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