Start-ups – Don’t crash your plane

As businesshands comes closer to turning four years old, I’ve been mulling back over the journey and the emotions that I’ve experience since it started out. It occurred to me that having a start-up is a bit like flying a plane… or more appropriately – finding yourself in the pilot’s seat of a plane at 15,000 feet with no engines running… that’s just about to stall.

That’s pretty much where it started for me. Tired with office politics and frustrated with my role, one day around four years ago I just quit. I’d been thinking about it for a while, but when I did it – it was so sudden it even surprised me. I was in tech sales and for anyone that’s worked in technology sales, you’ll know that once you quit – your company doesn’t want you hanging around on the off chance that you’ll lure their customers away or steal all of their customer data. So there I was, not long after the words came out of my mouth, buzzing off down the London streets on my scooter, wide eyed wondering what I’d just done and most importantly, what I would do next.

It took a month of figuring out that I didn’t want to work for anyone else again. During that time, I’d interviewed for jobs I didn’t want and unsurprisingly, not gotten any of them. So I decided to set up my own company and that was the moment I took control of the aircraft at 15,000 feet with no engines that was just about to stall. The 15,000 feet represented the total value in cash of everything I owned and all of the credit I had left on my credit cards at that point.

As any business owner will tell you, starting a business is harder and more complex that you might think (just like flying a plane). If you’re a product based business, the product development phase can be lengthy and difficult. If you’re a services business, it could take you an age to figure out who your customer is and what you need to offer them. And that’s just the basics. Like finding and pressing the button to start up the engines, you’re still in a stall hurtling towards the ground, burning through your budget and unless you can figure out how to turn that plane around fast you’re going to crash.

And this is a problem overlooked by many start-ups and small businesses today. Simply having a good product or a service is not enough for your company to succeed. It took businesshands about 18 months before it levelled off from its initial dive. With my credit card maxed out, luckily my car had been worth a little more than I thought and that bought me a few hundred extra feet in the stall. Ever since then we’ve been climbing. Slowly at first but as the months have rolled in we’ve risen faster and faster and today I can say, we’re actually having a pretty pleasant flight. So from someone who has been through the experience, here’s some tips on how to wrestle back control of your start-up and hopefully help you fly off into the sunset.

  1. Don’t build your product or define your service offering until you have done extensive market research. It doesn’t have to be expensive research. Attending free or low cost networking groups and getting feedback on your ideas is a good start and will save you time and money later on.
  1. Complete market and competitor analysis before you begin. Again, you can do this research yourself. Understanding the market and your potential competitors will tell you whether your idea has legs and can be a success. Is the market hungry for your idea? Are there already hundreds of companies in this space? What are you offering that’s going to differentiate you? These are just some of the questions you need to be asking.
  1. Do your figures. Even if you’re not ready to do a formal business plan, ask yourself these four basic questions.
  • How much will my product or service cost me to deliver (add a least 25% to any estimate to account for marketing, personnel and other bills)
  • How much will my product or service sell for?
  • How much of my product or my service will I have to sell to make a living?
  • Is that achievable?
  1. Don’t spend any money unless you have to. No luxuries, no office space, no fancy stationary or separate mobile phone for work. Spend nothing unless it is necessary for the start-up to progress.
  1. Save half of your budget at least for sales / marketing /business development activities. There’s nothing like having a decent product or service but not having any money to spread the word. It will take more than a couple of months of marketing budget to get your business off the ground.
  1. Build/plan a structured sales and marketing journey for your business and stick to it. Sporadic sales and marketing activities cost money and deliver very little. Consistency is king when it comes to closing sales.
  1. Build a structured customer journey for your existing customers. This ensures they will get a consistent and quality service. It will minimise customer attrition whilst also ensuring you identify as many upselling opportunities as possible. Remember it’s far more expensive to attract new customers than it is to sell to existing ones so keeping them happy needs to be part of your business strategy.
  1. Pay yourself as little as you can afford to live on for as long as it takes and plough every bit of spare cash from new sales straight back into your sales /marketing /business development activities. Don’t be tempted to slack off on this, even if you’re going through a busy period.
  1. Put yourself in the customer’s shoes. Stop thinking about what you want to deliver and start asking what your customers need.
  1. Speak to other people in start-ups. Get together regularly to discuss the progress you’re making and the challenges you’re facing. Having someone to speak to who is outside of your immediate start-up world will bring new ideas and a different way of thinking. Most importantly though it will improve your morale and give you the drive to continue pulling your start-up plane out of it’s scary initial dive so you can begin planning a route for the long haul.

Thanks for reading. If you’ve enjoyed this article don’t forget to share it and of course make sure you visit our marketing services page to find out what we could be doing to help your business.

3 kernels of wisdom from a true marketing legend

I was privileged to be present at a talk a couple of weeks ago, hosted by one of the world’s foremost authorities on strategic marketing – Professor Malcolm McDonald. Malcolm, who is now closing in on being 80 years old and still actively works on the operating boards of the world’s biggest brands. Not only that – he’s also the chairman of no less than 6 companies and has written over 40 books on Marketing, Sales and Account Management. Malcolm then, knows his stuff and during his long career – he has witnessed and assessed just about every marketing trend you can possibly imagine. So it’s with great pleasure that I’m able to pass on to you 3 kernels of wisdom from a true marketing legend.

Kernel No.1 Identify your core market

If you can delight this group, you will have a resilient customer base. Everybody has different needs and the broader your target group, the more generalised and average your product or service has to become to meet them. Average products delight no-one, so find your core market and commit to delighting just these people.

Kernel No.2 Define your ‘must’ target

Marketing targets for businessesYour ‘must’ target is an objective (usually turnover) that you absolutely have to achieve at a defined point in the future (typically either in 3 or 5 years from now). It’s not about projections – it’s about setting your business a bold and aggressive target and saying “no matter what happens – in ‘x’ years, this business must meet that objective”.

Once you have your ‘must’ target, you can compare it to the projections you have in place for your current strategy. The task then is to understand how to plug the gap between your current projected earnings and your ‘must’ target.

According to Professor Malcolm, there are only 4 ways in which this can be done.

  1. By increasing productivity (by eliminating inefficiencies or increasing the man-hours worked)
  2. By increasing market penetration (through more productive sales and marketing activities)
  3. By introducing new products (could be costly and has risks attached)
  4. By venturing into new markets (generally a high risk and costly strategy)

Kernel No.3 Answer the question “Why should I buy from you?”

Here’s a list of typical answer that 99% of companies will give you when asked this question:

  • We have better quality than our competitors
  • We have a great reputation
  • We get good results for our customers
  • We’re very responsive
  • You can trust us
  • We are innovative
  • We are the leading provider of….

If this is your answer, you risk sounding exactly the same as your competitors. You must be able to prove to your target audience that dealing with you will give them a distinct advantage – not merely help them avoid being disadvantaged. You need to deliver a true value proposition.

So that’s 3 kernels of marketing wisdom from a true marketing legend and in keeping with his advice, I’m going to leave you with the businesshands value proposition.

The businesshands value proposition

At businesshands, we offer a better standard of marketing and a broader range of marketing expertise then you would ever get if you were to spend the same budget on marketing personnel in-house. We also offer greater flexibility in terms of choosing and changing the blend of skills you need throughout the year and by allowing you to increase or decrease your budget as your needs dictate.

That means our outsourced marketing department services will put your business at a strategic advantage by (i) having better marketing skills (ii) by being agile and being better able to adapt to market conditions and (iii) financially – enabling you to spend more money in other areas of your business.

If you would like help with your value proposition, your marketing strategy or any other area of you would like to discuss our outsourced marketing department services, drop us an email or call a member of our marketing team today on 0207 459 4788.

Thanks for reading