4 factors that could kill your start-up dream
Serial entrepreneur William Berry says start-up with your eyes wide open. Read his dose of reality for any idealistic start-up dreams
There are many people out there with a bright idea and dreams of being a millionaire who run head first into the world of the start-up business, but be warned it takes more than just a good idea to succeed in what can be a decidedly unglamorous environment.
As the economy remains challenging for people up and down the country it is unsurprising that the number of start-up businesses is increasing as people try to take control of their future and become their own boss.
In 2012 the number of private sector businesses hit a record high of 4.8 million, up from 4.5 million in 2011. The Department for Business Innovation and Skills shows 99.9% of private sector businesses are small and medium sized firms that employ an estimated 23.9 million, so you’re in good and plentiful company if you plan to start your own business.
There are two main reasons a person may start a business; to utilise a certain skill they have or because they have spotted a gap in the market. It goes without saying that all these people want the freedom that comes with working for yourself. But before you leap, consider these factors:
1. It’s not glamorous and will take up most of your time
Being your own boss does allow you autonomy but it will be at the expense of your time; start-up businesses take up a lot of work and that should not be underestimated.
In order to run a start-up business you won’t just need to fulfil the glamorous roles like chief executive or managing director. Until the business starts making money it is likely that you will be marketer, PR, salesperson, delivery driver and general dog’s body.
2. The gap in the market might not be there
One of the main roles you will have to play in your start-up is that of researcher, and the importance of this cannot be stressed enough; you need to know your market inside out. It is not enough to think you have spotted a gap in the market, you need to be sure there is a gap that needs to be filled and that most importantly there is demand.
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Once you have identified the need for your product or service put together a structured business plan with projections for future business. This will be invaluable not only for getting credit from the bank and enticing potential investors but for keeping you on track to hit targets.
Starting-up a business is about discipline and commitment and you need to make sure that you hold yourself accountable for the effort you put in as nobody else is going to.
3. The wrong partners can let you down and lose business
You will be held accountable by your customers for the service provided by you and your suppliers and partners. That is why it is of paramount importance that you align yourself with other businesses that share the same work ethic.
If you want your start-up to be totally green or a truly local business then your customers will expect the people you work with to be too. If you’re setting out the parameters for your business only partner with people who share your vision.
4. Without help you’ll miss vital things
It’s not possible for a business owner, particular a start-up, to be an expert in everything and it’s crucial to know when to ask for help and outsource particular tasks. If you’re not great with numbers make sure you employ a great accountant who can give you guidance and help you learn, as well as keep you on the right side of the taxman.
By employing the right people you will have more time to work on the company rather than in it, which is key to the growth of a successful start-up.
William Berry is a serial entrepreneur and in 2006 was named a Young Gun by Growing Business. He is the founder-director of accommodationforstudents.com, and Vincentbond.com. William is also CEO of the new video start up p6.com, based in California.