Do you think you’ve got what it takes? Before you set up any business, you need to check you have some key qualities.
Do you want to work phenomenally hard? Are you willing for it all to fail and be ok with that? Do you have a clear vision and will you be satisfied seeing that vision come together? Do you have the necessary discipline to drive yourself without a manager pushing you to achieve things on a daily basis?
If the answer is yes, you’re well placed to set up on your own.
Being OK with failure is one of the most important lessons of starting your own business. And it is something you get better at as you go on, learning a myriad of lessons along the way.
Think of high-profile British successes like Richard Branson and Alan Sugar – they’ve been working at their business ideas for decades. Young successes do happen, but they’re very rare and there will usually be one exceptional individual behind it (such as Steve Jobs or Mark Zuckerberg). Twitter Co-Founder Biz Stone has this to say: “Timing, perseverance and ten years of trying will eventually make you look like an overnight success."
1. Assess your idea
Share it with others, write it up, and research it. Learn more about the size of the market – how big can your idea grow (scale) and who are the incumbents. Whatever idea you work on you’re going to be working extremely hard, so if it works, make sure the business can get to the size you want and isn’t limited by a small addressable market.
2. Register the business
You can either do this direct with Companies House or buy a company ‘off the shelf’ with all the admin already done, which is far simpler – this can be done online or through an accountancy firm.
3. Nail your brand
Get your logo and business cards done, and if possible a basic website explaining what you do. Make sure your personal brand is also on track – use Facebook, Twitter and LinkedIn to connect with relevant people and sell your ideas.
Just make sure you have optimum privacy settings… drunken photos will undermine you and what you want to achieve.
4. Evaluate the risk and do a basic cash flow
What do you expect to spend and sell, if you expect to sell anything at all? Are you betting more than you can afford to lose? (If so, it’s probably a bad idea.) Can you scale back your start-up costs to manage your risk? Start-ups are meant to be new and innovative, but that doesn’t mean they should be chaotic.
5. Plan ahead and keep it lean
What does success look like for you? What do you want to achieve, when, where, how and with whom? We haven’t used it, but this business model generator has been recommended.
And if you haven’t done already, read ‘Lean Startup’ by Eric Ries – essential reading for any entrepreneur.
6. If you want money, ask for advice
Set up a network of mentors who will chat through ideas with you. They will point out the strengths you can play to and the potential pitfalls you need to avoid.
7. Get financed
Your main options here are:
- Bootstrap: Using savings/work on the idea part time
- Friends/family: Asking them to invest – risky if it doesn’t work out (!)
- VCs/Angel investment: Money is out there for a strong team that has a genuinely interesting idea. However, you’ll need to have some strong metrics to suggest that you’re onto a winner
8. Think about Co-Founders
This isn’t essential, but it can be useful to share the burden and help with skills you don’t have. However, you should be careful not to put yourself in a business where you are doing 100% of the work and someone else owns a chunk of equity just because they were in at the start, but have now gone onto pastures new.
9. Get started!
As Branson says ‘screw it, let’s do it!’ can be a good way to go about things. Often it’s better to get started (as long as you’ve done all of the things above – particularly analysing your downside risk) and to start learning about the market you want to enter. After all, you can’t win the race if you don’t have a horse in it.
10. And finally…
Just remember... “Once you decide to work for yourself, you never go back to work for somebody else” – Lord Alan Sugar, Founder of Amstrad