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.
- 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.
- 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.
- 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?
- 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.
- 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.
- 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.
- 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.
- 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.
- Put yourself in the customer’s shoes. Stop thinking about what you want to deliver and start asking what your customers need.
- 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.
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