I do not think there will ever be such a thing as a sure-fire process to set up the next LVMH, Microsoft or at that, the rising star in your local area. I have however found that by following a simple series of pre-thought stages, a first time entrepreneur can have a solid foundation from which to grow a venture more sustainably.
Inspired by a conversation I had with a colleague discussing what I perceived as some of the reasons entrepreneurs struggle in today’s tough environment, I thought it fitting to put forward some thoughts on how to approach setting up.
In way of disclaimer, I laud the intrepid spirit most entrepreneurs exhibit and remain an avid promoter of embarking on unorthodox approaches to solving persistent or expressed needs. I am simply suggesting an approach that may simplify the headaches associated with the process of setting up.
1. What are you really good at?
Most seasoned entrepreneurs and business leaders will tell you to start with what you are passionate about or at minimum skilled at.
Many times I have seen entrepreneurs with little or no relevant technical background or business experience attempt to create “the next big thing”, unfortunately usually in response to sporadic or emerging trends or worse still, fads. Just think of how many Groupon, Facebook, Pinterest, Kickstarter-like platforms have sprung up over the past 30 months. In my blog post on 5 ways to identify a good business opportunity, I started by saying “If it is easy to do, it’s not worth it” - perhaps the best warning sign I can recommend to any entrepreneur. That said, if it seems too challenging, perhaps now isn’t the right time or altogether, the opportunity isn’t a good fit. Basically, be realistic about your ambitions and expectations.
Where the fundamentals are not looking good (or rather look too good), seek external assistance.
3. Get support
In the 2nd part of the series 25 things I wish I had known before setting up my first business, I emphasised the need to get a mentor or coach. They will help clarify things, point out sources of help and appraise your strategy all of which are valuable when setting up.
I also encourage entrepreneurs to turn to established networks or portals for quick tips, How-To guides and signposting among others. For example, the UK recently had Business Link and today has places like Startup Britain or Smarta with excellent starting points.
The net value of getting help as early as possible and throughout the process is becoming more aware of pitfalls to watch out for and realising ways to reduce the time and cost of getting started.
4. Put together a business plan
Putting things down on paper helps clarify the opportunity. Start early and do your homework meticulously.
I have run into many aspiring, new and seasoned entrepreneurs that think business plans are the domain of big business or otherwise used when looking for funding. Far from it, business plans among other things help keep you focused on the core objectives so revise and refer to them regularly.
I usually advise entrepreneurs to try techniques like Plan on a Page or Plan As You Grow techniques to iterative business planning especially when a concept is still in its infancy or is being pivoted.
5. Start somewhere, start now.
In the end there is no such thing as a perfect plan and it is common knowledge that ideas without execution are worth nothing.
Traction is attractive - gain some.
Identify the absolute minimum of resources and process required to get to a minimum viable product or proof of concept as quickly as possible. I am a proponent on agile methodologies and principles like build fast, fail fast. Iterate rapidly and often, taking on board as much feedback as possible from the stakeholders involved.
That said, do so with the ideal stage in mind. How can you align your actions now to help prepare you for where you want to go? Do you have contingencies in place? Think in context of skills, resources and network.
If after all this the concept isn’t gaining the traction you envisioned within the time you anticipated then perhaps it’s time to revise, pause or purge the opportunity.
What alternative approaches have you come across?
While on a train from Leeds, I happened to have a rather interesting conversation with some friends. The two were looking to set up a business to market a new recipe one of them had created and were in search of innovative ways to differentiate their product. Granted the idea was still in its infancy, I thought it fitting to encourage them to start thinking of the customer right from the start.
I believe the best products are designed with the customer in focus from conception to maturity.
In the ideal world, good products provide a combination of convenient, simple or effective solutions to complex or irritating problems for customers that have the desire and ability to pay.
The reality becomes a little more complex because among others:
These issues make differentiation a significant challenge for new and existing businesses alike - how can you make a product stand out of the crowd and remain profitable?
Above all else, focus on building highly engaging customer experiences.
Customer experience captures the full cycle of a customer’s interaction with your business from hearing about it to post-purchase issues like use and disposal of products and termination of contracts. I encourage entrepreneurs and small businesses to innovate at each stage of the customer experience cycle with their customer’s aspirations as the motivator. Where do you see your customer in the short, mid and long term?
Perhaps the most critical element of customer experience is the product/service you have to offer as it is what brings the customers round in the first place or at least holds their attention when they get to you.
When developing new products I lead with the question - Where are my customers headed and how can I help them get there? More specifically:
I will be writing on value in an upcoming blog article but in summary, it boils down to the emotions aroused when customers interact with your product for example feelings of convenience, luxury, security, confidence or efficiency. In many ways, value perceived or derived can be the basis of attraction for the customer.
When you buy a luxury automobile like a Rolls Royce or Bentley, you are typically aware of the level of attention to detail that has gone into producing the vehicle. The same theme is evident whether buying an Apple product, a timepiece from a traditional Swiss maker, or bespoke tailoring from Savile Row. Clearly these manufacturers have built products that communicate quality, distinction and timelessness - elements of a luxury experience.
Each of these organisations have meticulously and consistently invested in telling their story and relating it to their customers, and have gone on to be very profitable while at it.
As a result of this customer focus, they have enjoyed among others:
This is the sweet spot at the end of the customer experience cycle that drives new business and growth. There is no reason why new and small businesses cannot access the same outcomes.
The way customers interact with your business and go on to use your product forms the “touch” element of the customer experience. Are you differentiating on aesthetics of your retail space or automating your service delivery? Is your product made to order, digital copy or made to stock? Despite the many considerations at this stage, the drivers should be:
When designing customer experiences I like to study what the target customer segments are currently using in way of complementary and supplementary products and to seek inspiring examples from other sectors.
Entrepreneurs and small businesses should aim to be at the cutting edge of innovation in customer experience, especially in sectors with large or established players. This can help startups and small businesses quickly gain reputation, brand recognition and market share.
A good example of a practical framework for this as applied to social enterprise is laid out in IDEO’s Human Centred Design.
This is the conclusion of the five part series 25 things I wish I had known before setting up my first business. My hope in sharing these lessons I learnt is that some budding or newly started entrepreneur out there will be rescued from making the same mistakes and doing the unnecessary extra work fixing them that I’ve had to on the journey so far.
That said, the reward really is in the journey, be sure to enjoy it!
21. Build a superior product
It is a competitive advantage.
It will keep you relevant.
It attracts top talent, collaborators and investment.
The only way I know how is to listen attentively to your customers’ pain and to evolve with them.
22. Innovate or die
Remember Polaroid?
To compete today and be relevant tomorrow you must strategically, aggressively and consistently invest time and resources into research and development.
23. Don’t expand too early
Develop traction and authority in a given niche or sector first.
For as long as you can, grow organically or at least until your product is proven and you have acquired the skill, experience and capability to support it as it scales.
When ready to expand, start with experienced customers and local partners. Get help!
24. Know your ABC - Always Be Closing
A colleague once said to me, “It’s not a business until you have a customer”.
While there are exceptions to this given different business models and circumstances, the statement remains valid. Aim to get to a paying customer as realistically fast as possible.
To keep existing, you must generate revenue (or financing for the capital intensive project). Continuously build your sales pipeline - Always Be Closing!
25. It all boils down to follow-through and execution
No matter how well funded or thought out a project is, who’s backing it or the hype around it, if poorly executed it will eventually fail.
All these tips are useless if execution and follow-through are poor.
Bonus tips
Finally, don’t forget to reward yourself and the team for achieving your milestones!
Godspeed to all the new and recently started entrepreneurs.
What are the most important lessons you have learnt as an entrepreneur? I’d love to hear from you.
In the fourth instalment of the 25 things I wish I had known before setting up my first business series, I’ll be talking about investing, focusing and delegation among others.
16. You cannot patent ideas
Anyone can have a good idea, it takes implementation for it to be worth something.
Don’t get fixated on perfecting an idea or concept. After a reasonable amount of time studying, reflecting and planning, act! Then iterate. It does not have to be perfect.
Among other downsides, putting off implementation puts you at risk of losing first-mover advantage and competitive edge or enjoying low barriers to entry while available.
17. Sow seeds
Part of building a successful business is putting together a good network and a stable sales pipeline which require investment of time, resources and energy.
I believe one of the best forms of investment is in giving a portion of your time, resources and skill to help others without expecting any direct form of compensation or return. Therefore, within reason:
Very few things excite me more than helping people and organisations achieve challenging objectives.
It is also important to invest in extending the product portfolio, exploring new markets and in securing new partners. These can unlock hidden value in a business, create new revenue streams and attract top talent among other benefits.
18. Don’t be a jack of all trades
Successful entrepreneurs, executives and professionals excel at being extremely proficient and skilled in a small set of activities and tools while having a good appreciation for the wider aspects of their trade.
This appreciation helps build an understanding of gaps in knowledge or experience and uncovers potential partners and collaborators.
Delegating and outsourcing effectively frees you up to do what you do best.
19. Multitasking is a damned lie!
It is widely written that the downsides of multitasking include killing efficiency, impeding attention to detail, distorting focus and in some cases anxiety.
Effectively scheduling time and resources allows you to deal appropriately with one issue at a time, giving it due consideration.
20. Be focused ( but not inattentive)
Focus channels time, energy and skill into flawless execution.
Set S-M-A-R-T goals, pay attention to the milestones and have a system in place to give summaries of essential metrics in an “at a glance” perspective to keep you on track.
That said, change is constant within the organisation, it’s stakeholders and operating environment. Put measures in place to keep abreast of and respond to the trends, insights and analysis of what is going on around you.
11. Aim to under promise and over deliver
Honesty is the best policy. Manage customer expectations with candour and consistency.
With care and precaution, under promising and over delivering can be an effective strategy for new and small businesses to establish a loyal and repeat customer base.
The trap however is that this can quickly evolve into customers always expecting engagements to be under budget and delivered ahead of time.
The ideal place to be is where you are delivering a superior value proposition at performance-based cost to the customer. You now have the freedom to “wow” the customer with anything you do over and above this baseline.
Don’t break the bank or the team trying to please everyone. Manage expectations.
12. Reputation is the ultimate pillar
Reputation is perhaps the most valuable form of currency in business.
Among other benefits, a good reputation:
Invest in effective reputation management and monitoring the proliferation of your brand.
13. Network like your life depends on it!
Networking is essential to building a sustainable sales pipeline for new and small businesses.
One of my most valuable business connections came from an executive I first encountered in an elevator. Having had an engaging chat comparing technology gadgets, he asked if I could go by his office to speak some more. The rest as they say, is history.
Some of the ways I started out and currently network include:
I tend to approach networking from a perspective of “Where can we learn from each other?” and “How can I be of assistance?”.
Regardless, it’s important to be sufficiently prepared with a good elevator pitch, appropriate etiquette and a subtle way to take notes.
14. Exceptional talent is the key to success
Hire smart and motivate competitively.
Give your talent the best development opportunities you can afford.
Encourage, recognize and reward intellectual and entrepreneurial curiosity.
15. Fight to remain quick and nimble
To be effective today and relevant tomorrow, an organisation needs to be able to adapt.
Create a management and operational structure that enables you to anticipate and efficiently respond to change.
I like the saying “Think big, act small”.
