Make It Happen: The Prince's Trust Guide to Starting Your Own Business

excerpt

‘Building a business starts with you’

Starting a business

Starting your own business will be one of the most exciting and challenging things you will ever do. To be successful, you’ll need to be well prepared for what lies ahead. Careful planning will help you turn a great idea into a profitable reality.

Is running a business for you?

Whatever your starting point, there are some basic questions you need to ask yourself about your business idea, your personal aims, your skills and your know-how.

Running a business is challenging and time-consuming, so it’s worth thinking about whether this labour of love would suit your personality and lifestyle. Having your own business and seeing the direct impact (and hopefully benefit!) of every decision you make can be incredibly rewarding. But being your own boss means that the buck stops with you, which can make it harder to switch off at 5pm or weekends. It’s a good idea to speak to people who have been there and done it; ask them their reasons for being self-employed, what they hoped to gain, whether it has been all they expected and what their plans are for the future. There is no better way to judge whether self-employment is right for you than to seek advice directly from those already doing it. Be brave too. Ask local business owners about the highs and lows of running their own business. The better prepared you are to visualise yourself coping with challenges – as well as with successes – the more easily you will be able to answer the question: is running a business right for me?

Entrepreneur’s checklist

There is no one type of person who is good at running a business but there are some characteristics that successful small business owners have in common. Andrew Dixon, the founder of ARC InterCapital, and Claire Locke, the founder of clothes brand Artigiano, suggest these are some of the most important traits:

• Passion and drive – will it keep you up at night thinking how to improve your business? Do you care enough?
• Focus and determination – you don’t need to be particularly clever to start a business. You do need these traits – in spades.
• Creative streak – not in terms of artistic flair, but more imagination as to how you can differentiate yourself from competitors, and take a fresh look at an established market.
• Hard work – you have to be prepared to put in the hours and be able to juggle a lot of balls at the same time.
• Leadership skills – can you motivate others to share your passion and follow your lead? There are a lot of good managers, but it is a real skill to be able to excite people. And that goes for customers as well as staff.
• Put the customer first – it is easy to get wrapped up in your business and do what you think the customer wants rather than what the customer actually wants. You need to be able to focus on the customer, who they are, and what problem you are solving for them. To do this, it helps to have good social skills and be able to empathise.
• Paranoia – in so much as you should always be aware of competitors.
• Positive frame of mind – whatever has happened the day before, you need to be able to wake up and put on a fresh pair of glasses, and have the ability and enthusiasm to overcome difficulties.
• Resilience – every day is to do with solving problems – can you keep going, and not be tempted to give up?
• Risk and reward – can you cope with both?

Don’t worry if you haven’t got all of these characteristics – it doesn’t mean your business won’t be a success. The key is to recognise the skills you have, the skills you need and how you are going to start filling in the gaps.

What do you want to achieve?

Not all people will start a business because they want the power and wealth of Bill Gates. While some will be driven by money, others want to be their own boss to enjoy more creative freedom or the opportunity to improve the community around them. The reason that you go into business will affect the type of company that you become, so it is important to think of this at the start.

What’s the big idea?

Building a business starts with you and your personality, your skills and your ideas. These three things are not set in stone; you will develop and change, as will your skills and ideas, and you will have plenty of opportunity to review each as time goes on. But it is important that you are clear about where you stand on all three before you start planning.

Are you clear about what your business will do? This may seem obvious but many people, brimming with ideas, overlook the importance of this question. Your business will need to stand out from the crowd if it is going to be noticed by customers. And that can be hard when, more likely than not, your customers will already be able to buy whatever you are offering elsewhere. There are very few genuinely new offerings. But don’t panic, because you can still be a successful business without a unique product or service.

You need to create a Unique Selling Point (USP), a reason why customers should buy from you rather than anyone else out there. To develop your USP, look at what you do and how you do it. It’s often how a business does what it does that sets it apart.

Do you offer free delivery, or is there something special about your customer service, for example? Consider your customers – is there something special about them? For example, are they based all over the world; do they have values in common? What benefits do customers get from your business: price; good quality service; or perhaps your personality? Above all, make sure that you put yourself in your customers’ shoes and check that your idea is something that they will actually want, rather than a dream or product that you have fallen in love with.

Try to be as specific as possible about the kind of business you want to run. If you want to run a café/restaurant, will it just be open in the daytime or are you prepared to work evenings? Will it be traditional or innovative? It’s one thing to know that you want to start a clothing label for example, but you need to be certain about what type of clothing label, attracting which sector of the market? What will be your input? What sort of customers are you expecting to have?

Decisions that you make about what your business is and isn’t will affect every aspect of your venture – from your choice of premises and location, to the amount you will need to spend on fixtures and fittings.

‘Your decisions about that your business is and isn’t will affect every aspect of your venture’

Your business values

Now that you have your business idea and you have thought about what it is you are hoping to achieve, it’s good to take a step back and think about the type of business you hope to run. The reason you are setting up your business and the type of business you hope to become will form a core part of your business – your business values. These values will probably be instinctive to you, and you will probably already have thought about them in trying to work out your USP.

For example, if your aim is to exceed a customer’s expectations every time, and to provide outstanding customer service, that is an important business value, but it will also distinguish you from the competition and help you find your niche in the market.

What other values might you have – treating staff and customers with respect? Working to a consistently high standard on every job? While these things may be instinctive to you, it is worthwhile writing them down. Not only will this make it clearer to both you and your business partner or first employees, it will help a customer understand what they can expect of you. That will be the making of your brand (for more on brands and brand identity, see Chapter Two).

The second part of the exercise is to think about why you are in business. Is it important to you who might benefit from your company’s success, or whether what you do will make a difference? If you do something of which you can be proud, and that benefits the community in which you work, there will also be benefits for you and your business. For starters, it will be easier to build up a strong reputation. It will also help you keep your focus and not get easily sidetracked. If you are clear on why you are in business, it will help you to pass on your vision to customers and staff. Again, writing those thoughts down will be helpful, so that you can communicate them more clearly to customers, future employees or potential investors. If you are clear about how you see your business you will find it easy to describe your business to other people. You will have plenty of opportunity to tell people about your business – you could be meeting potential customers at a bus stop, at your local pub, even in the back of a taxi. You need to make every opportunity that you have to talk about your business count.

You should also think about what your business is, in terms of what it stands for and, importantly, what your business isn’t. This works in terms of both values for your business and the description of your business.

What my business is
My business will be known for stocking ethically produced clothing.
My business will provide quality materials at an affordable price.

What my business isn’t
My business will never trade with suppliers who do not pay workers a fair wage.
My business is not high-street mass market.

Beyond business

If your business values show that the main aim of your business is to improve the community or environment around you, rather than make profit for yourself, it may be that your business will be a social enterprise. This is a business with primarily social objectives, where the majority of profits are reinvested for that purpose back into the business or community. Social enterprises are still run as successful businesses, but adopt socially and environmentally responsible approaches to buying and delivering services and products, or address a particular social or environmental need, e.g. by providing transport for schoolchildren, or recycling services. Examples include the Big Issue magazine, or The Eden Project. These enterprises can take different forms, which to a greater or lesser extent, can help with financing. These include: Community Interest Companies, where the social aims are checked and regulations are in place to stop the assets and profits being distributed for other purposes; charities, where tax breaks can be an advantage; and companies limited by shares.