The First Rung
(Practical Advice For Start-Up Businesses)
If you are a start up business, or thinking about this, then we would like to assist you get this right. We are in a fortunate position to have witnessed the start up of many new businesses and are always amenable to discussing ideas with budding entrepreneurs.
Going into business comes with many responsibilities and you should proceed only if you are doing so for the right reasons. Our view is that
start-up failures are down to this basic principle: if you start from a negative position then you will most likely not succeed. We would advise anyone starting a business to do so because that is what they want to do, not what they’ve been forced into doing. Think long and hard: is self-employment right for you and have you got the skills necessary to make it a success? Do your research, make plans, then if it all looks good get going. But tread carefully and, above all, don’t commit money (yours especially) unless there’s a good probability of a successful return. Running your own business is hard work, and often stressful, but it is also very rewarding.
So, you’ve decided that running your own business is for you. That’s great, but here’s some things you might wish to consider:
Business Plan. The best advice we’d give on this is: keep it simple. There are many people out there that will tell you that those businesses that start up without a business plan are the most likely to fail (but see our views above). Whilst we would never advocate not having a business plan, you should carefully consider how any plan will work for you and therefore what it should contain. ... more
Marketing. We’ve come to realise that marketing isn’t something that you can easily conquer. We recognised that we didn’t have the right skills to do our own marketing. So what did we do? We employed a consultant to help us do this. Unfortunately, ... more
Advertising. We’ve tried it all with advertising - local newspapers, magazines, mail shots, Google advertising, and others. None worked for us, but that may just be a feature of the type of business we run. ... more
Social Media. This is a fairly new concept for us and we’ve only just started to experiment. We’ve been aware of the ‘potential’ of social media for a few years but couldn’t see what benefit it would have for us. ... more
Website. Before diving right in and launching a website take a moment to consider some essentials. Do you really need a website? To answer this, ask yourself these questions: ... more
Networking Groups. We’ve tried several and have to say that most are just a complete waste of time and money. We’ve spoken with plenty of other business people that agree with us entirely on this. ... more
Support. It’s often lonely in business. Most people come from an employed background and find it difficult to work entirely on their own. So support should be something you should consider from the outset. ...more
Staff. Don’t, unless you have to! Employing staff brings a raft of responsibilities and issues that are best left until your business is properly established. ... more
Communications. We live in a world of almost instant communication and you need to be able to join in with this. However, a business communication plan (for want of better words) isn’t the same as you would do at a social level. You need to be projecting the right image from the outset if you are to be taken seriously. ...more
Status. You also need to consider becoming a limited company very early in your plan. ... more
Office Space. We love to rent office space – it is our business after all. But it grieves us when a business has to vacate because they hadn’t carefully considered if they could afford to take on the cost. ... more
The above is not intended to be exhaustive, it can’t really be as there will be many other influences and forces that will vary depending on your business sector. What we’ve attempted to do here is give you some food for thought. If going it yourself is what you assess is the right thing to do, then good luck. Being your own boss is exciting and can be rewarding, and we wish you every success.
why choose orion?
We provide a five star business centre, specialising in supporting small businesses ...more
Also, please take a look at our client directory for a listing of some of our existing clients, and read what they have to say about us.
For more information on the Virtual Office concept please see our FAQs or call us on 020 3301 4866 or 01780 758 500 - we're always happy to discuss your requirements without obligation.
Business Plan
The best advice we’d give on this is: keep it simple. There are many people out there that will tell you that those businesses that start up without a business plan are the most likely to fail (but see our views above). Whilst we would never advocate not having a business plan, you should carefully consider how any plan will work for you and therefore what it should contain.
There’s no point in employing, for example, a business consultant to write a ‘grand’ plan that won’t really improve how you run your business or make those all too important sales. You will know your product/service intimately and as long as you periodically, and objectively, review (at a strategic level) what your doing then why give your precious money to someone to produce a document that will only really tell you what you already know. Sorry if this sounds negative, but it’s what we’ve found both from our own experience and from discussing this with others business owners.
One thing you should do is to create a finance plan, and keep it current. The chances are that you will need to present this to your bank at some stage. In any event, a good finance plan will help you control your business and avoid falling into the trap of spending more than you can realistically afford. Your finance plan should contain a cash flow breakdown as well as a profit/loss projection. Armed with these you should be able to work out what your maximum exposure (ie risk) is in financial terms –the worst case scenario allowing you to know when to call it a day!
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Marketing
We’ve come to realise that marketing isn’t something that you can easily conquer. We recognised that we didn’t have the right skills to do our own marketing. So what did we do? We employed a consultant to help us do this. Unfortunately, we didn’t get even one sales lead from all the ensuing effort and costs. Based on our experience, we advise anyone to tread carefully with engaging a marketing ‘specialist’.
You have to understand your market fully before deciding how to tackle reaching them. If you can do this then there’s no need to use an expensive consultant to write a plan that won’t improve your turnover, but which will be full of caveats to excuse them when your sales don’t improve. If you can’t do this yourself, then be even more careful about engaging with a consultant. Ask this fundamental question: how well do they know your business and market sector?
Our conclusion is that marketing is really a concept that works well for big brand names – they are comfortable investing in sustained marketing effort because they need to keep their brand name fresh in the public domain. But do you really need to do this?
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Advertising
We’ve tried it all with advertising - local newspapers, magazines, mail shots, Google advertising, and others. None worked for us, but that may just be a feature of the type of business we run. Our point here is that you should stop and consider carefully if these methods of publicising your business will actually reach your intended audience. Ask yourself: who are my potential customers, will they read this journal/document and will they use it to make contact with you? You can easily get carried away with the need to advertise and spend a large part of your budget on this without it giving you any return.
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Social Media
This is a fairly new concept for us and we’ve only just started to experiment. We’ve been aware of the ‘potential’ of social media for a few years but couldn’t see what benefit it would have for us. We did previously try blogging, but there’s no point in doing this if nobody is looking at your blog; which is what was happening to us, so we stopped.
The so-called experts will enthral you with the potential of Twitter, Facebook, and so on, but we remain to be convinced of the value to us. However, as a company that likes to be able to advise clients we feel it important to understand first hand what the pros and cons are of this ‘new’ marketing concept – please don’t take our experience of blogging as indicative of the nature of this new marketing initiative. We’ve started afresh with a Facebook account – as our experience grows we will provide feedback here.
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Website
Before diving right in and launching a website take a moment to consider some essentials. Do you really need a website? To answer this, ask yourself these questions:
? What will a website do for my business? If it doesn’t increase sales then is it really necessary at this time?
? How will people get to know about my website? Just publishing a website won’t in itself bring customers to it, there has to be some other force involved (such as Google Adwords, but more on Google latter).
If you do need a website, then get the right design from the beginning. A website is a shop window to your business and a poor one will only reflect badly on you and your product/service. If you feel a need to get a site up and running quickly, with the intention of changing this later, then stop and think again. We’ve seen examples of a good product that has gone nowhere, due to a large part because the website is unprofessional and immature.
Choose your web designer carefully – vet them, check out their portfolio and get references to help you judge if they are up to the job (include yourself in this if you intend doing it yourself). Insist on having the ability to update the site yourself. What did work for us was to revamp our website and keep this ‘fresh’. This bumped us up significantly in Google organic listings (even paying Google didn’t do this for us).
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Networking Groups
We’ve tried several and have to say that most are just a complete waste of time and money. We’ve spoken with plenty of other business people that agree with us entirely on this. That said we do subscribe to a local networking group (a not-for-profit group run by the members) and we do organise our own free-to-clients quarterly network event. The former offers a monthly gathering with a good inspirational speaker. The latter is our way of keeping in touch with our clients (especially our virtual office clients) – could you offer something similar?
Most networking groups are run as businesses – meaning that the organisers are primarily intent on making money for themselves. You will get any number of them in your area, many will offer you an ‘opportunity’ to join them. It’s likely that they will entice you with statements that their particular group restricts membership to one business within each profession/trade, so you feel inclined to join to avoid your competitors beating you to it. Clever marketing!
You tend to find that networking is something that people do really badly: for a start they think that they must spend inordinate amounts of time ‘doing’ breakfast or lunch or some such thing with a bunch of strangers. But networking should have one aim – how to increase your sales. Most people that attend networking groups are looking for the same, but few are looking to make purchases. Networking is actually crucial to business, but to achieve this, think about one thing: who will bring you additional sales? For example, if you are an architect, then shouldn’t you be ‘networking’ with property developers? This doesn’t mean that you should be looking out for a specific networking group – you’ll have to find a way of getting to know your network ‘partners’ and customers and make sure they are always aware of you. One of our clients has even started a networking group within his business sector because there was a vacuum that needed filling – could you do the same (but without it adversely affecting your business)?
We have access to a free networking guide that you may find interesting – please click here to download this.
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Support
It’s often lonely in business. Most people come from an employed background and find it difficult to work entirely on their own. So support should be something you should consider from the outset. Find out about support organisations – there are quite a number available: such as Business Link, and even your district councils, town councils, chambers of commerce, even HMRC; they often run free support events and courses. Consider getting on their mailing list, even better, start a dialogue with the economic development officer in each – good networking comes from unusual places. But don’t think that networking is a quick gain – you’ll have to have a sustained and focussed effort to see any results.
Attending support events will also help to keep you current with any number of things – even if it’s just the latest buzzwords. There are many free, or low cost, training events (Business Link is a good source) – whilst you might think that your time could be better spent on something else, attending such events will help motivate you.
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Staff
Don’t, unless you have to! Employing staff brings a raft of responsibilities and issues that are best left until your business is properly established. Try out-sourcing or employment agents before committing to offering someone a job – but a word of caution here, agents have to make a profit and this will inevitably come out of your profit line. If you use a business centre then the provider should have support staff available to help you, irrespective of if you have a physical office or not (see more below).
Ultimately, consider carefully when the time is right to take on staff and weigh up the risks of doing so.
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Communications
We live in a world of almost instant communication and you need to be able to join in with this. However, a business communication plan (for want of better words) isn’t the same as you would do at a social level. You need to be projecting the right image from the outset if you are to be taken seriously and a hotmail (or similar genre) simply won't do; in fact, reportedly 88% of the business community are suspicious of hotmail addresses. You should consider getting your own domain name at an early point in your start up plans; even at the first rung. You don’t necessarily need to launch your website just yet (if at all) but having an associated email address will make you appear to be a credible player.
A plausible telephone number is also important. Trading with just a mobile number may seem like the ticket (especially if you are fairly mobile) but you should think about having a landline number also. There are a number of options with this, from an 08xx number through to a local number (and this can be from any area code of your choice). And what about a professional receptionist to answer your phone calls? Running a business is a lot of hard work, and if you’re spending your whole morning answering calls, you won’t get a lot of work done. Click on the links to find out more about these options.
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Status
You also need to consider becoming a limited company very early in your plan. One of the first checks we do is to see if an enquiry is listed with Companies House – even if the company has only recently been listed we see this as a positive indication that the owner is serious about starting in business.
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Office Space
We love to rent office space – it is our business after all. But it grieves us when a business has to vacate because they hadn’t carefully considered if they could afford to take on the cost.
Many people feel they need office space to impress or that they just can’t operate from home (usually this boils down to a lack of self-discipline). As a start up you need to tread carefully with your costs – an office probably isn’t the right choice at this time, but may be later on. We see many people who feel that they just have to have an office from the outset; after as little as 15 minutes chat, we often convince these people that they don’t need an office and that they can achieve the same (or similar) with virtual office solutions.
One other thing that we find frustrating is the opinion that business centres are expensive compared with traditional office space. Taking on a lease is fraught with inherent risks and hidden costs. Before even starting to search for leased premises take a look at our costs comparison tool, it might just convince you to avoid wasting your time searching for conventional office space. Why can business centres provide space so cheap? It boils down to economies of scale: you only pay for the cost of the office you need, for as long as you need it. There is a ‘critical mass’ that comes into play, but this only applies to well established businesses that have basically outgrown the ‘business centre model’.
When considering virtual office solutions think long term. Business centres offer a range of office solutions for small businesses – starting with a virtual office service through to fully serviced offices and meeting room space. With a reputable business centre the services on offer can grow to match the growth of your business.
There are plenty of telephone answering services out there that will offer you an apparently low cost service, but will sting you with add-on charges (ie each time they take a call they will charge you an additional fee, and the cost can mount up considerably). We have heard of a small business that regularly pays out around £500 per month to a telephone answering service provider - for a similar service we charge just £69.
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