Starting a Business

© Ann Holman 2009

All rights reserved. Except for the quotation of short passages for the purposes of criticism and review, no reproduction, copy or 

transmission of this publication may be made without written permission. Any person who does any unauthorised act in relation to 

this publication may be liable to public prosecution and civil claims for damages.

!"#$%&'"($)*$+,,$-)./0,$()$1#$&2#,(&3#2$04$("#$05(")%$)*$("&4$6)%7$"04$1##,$044#%(#2$&,$088)%20,8#$6&("$("#$9):;%&'"(<$=#4&',4$and Patents Act 1988.

First published in 2009 by

+,,$-)./0,$9)/:0,;>>$=;#%4$9)5%(9)//#%8&0.$?)02

Exeter

@AB$C=DUnited Kingdom

666E0,,")./0,E8)E570,,F0,,")./0,E8)E57

1. Has your business idea got a beating heart? It’s a blinding flash of the obvious but have you got a great idea that you can actually innovate with. If the market is flooded (and it probably is) with what you have to offer, you are going to have to think damn hard and creatively about how you communicate a better customer experience and invent more sophisticated marketing than your competitors.

Where do you sit? Where are you positioned in the market place? Are you cheap? Are you expensive? If you are neither what are you? Be very, very clear about what your offering is. If you are not cheaper than everyone else then you need to be different!

Remember, if the products and services are the same, people will buy on price. If they are different, they will buy on experience. You have to ensure you are wholeheartedly in love with what you do. If you’re not, you, or the product offering will burn out and quickly. Motivation in business over a sustained period is hard in any start up, particularly during the rough times. Being in love with what you do certainly helps, actually, its seriously critical.

2. Gain customers at an impressive pace

To be honest it’s not really about sales revenue, it’s actually about acquiring great customers. Customers, who don’t waste your time, love what you do and acknowledge your expertise or product for what it is. Trust me you will save yourself a lot of time and money if you grow your business through each customer rather than chasing turnover.

Adding customers comes in two stages; customer acquisition and customer retention. Have a small, simple strategy for both using the following tactics:­ Get your marketing right. Don’t chase head long down blind alleys only to rock up at a customer you don’t want. You’ll have spent time and money on not getting a result. Be very, very focused. (Get more insights in The Marketing Rule Book.)­ Recruit the right customers. Set a criteria that identifies your perfect prospect, then go and get them.­ Don’t just sell products and solutions; add value to each customer too.­ Use the customer experience they have with you to boost your credibility and reputation.­ Ask each customer for at least two referrals each.

Never, ever forget that getting customers is one of the most expensive things you will do, do not lose them. Each time you recruit a new customer, consider ways to engage better with them and then bond them to your brand.

go and get them..

3. Build up your credibility then communicate it

In a crowded business world where business is scrapping for attention, it’s easy to succumb to the lust to capture customers no matter what in a hyper competitive marketplace. It takes time to build a reputation but it needs to be on your mind right from go. Customers only have a desire to discover the truth and place reputation ahead of the features and benefits of your products and services.

Credibility fosters trust so how relevant is your credibility beyond your core product offering? Positioning yourself in your industry sector as an innovator or specialist allows you to influence and comment on trends and issues as well as showing there is a ‘real person’ behind the gloss of your marketing materials. In addition try these ideas:­ Utilise customers – those that will publicly swear by you.­ Engage in appropriate, high profile media relations.­ Write articles.­ Conduct seminars.­ Achieve recognition through gaining awards.

On top of this, the best way to build a credible brand fast is to be associated with a trusted third party influencer. ‘Piggy back’ their reputation, develop a great joint business/project experience with them and use that to boast about and boost each other’s credibility.

scrapping for attention..

4. Focus your efforts on adding value

Please do this. It will stop you getting in trouble later and it will free up your time to spend where it can add most value. It never ceases to amaze me how many people do their own books when it can cost as little as $75 per month to get someone better qualified than you to do it. It’s a no brainer…they know what they are doing and understand it better than you. Leave it to them and your focus is on gaining customers and sales. Outsource the boring repetitive stuff, leave the exciting, innovative stuff to you.

The five things you should get someone else to do:­ Understand management accounts but get someone else to do them.­ IT Support.­ The design of your logo, stationery, brochure, website.­ The marketing of your business particularly online.­ Telephone answering.

I’m not saying you shouldn’t know anything about these things, just don’t get bogged down with doing them. It’s all about being professional, you are not ‘gifted’ in all the above areas. The ‘jack of all trades’ mentality died years ago. Concentrate on what you are good at and get others to do the stuff you are not an expert in. Simple really!

free up your time..

5. Who is your caddie?

Or, the person who is there to mentor and coach you! I’m guessing you have a particular talent in your field and line of business whether it’s design, software development, making jewellery, a tree surgeon or an architect. If you were an elite sportsperson, the first thing you would do is hire a coach and put a team around you that could help you achieve your goals. So why don’t people starting their own business do that?

Seriously, this is one of your first moves. I’m not talking about your technical support, the accountant, banker, solicitor, although they are important. I’m talking about someone who has run their own business, has been through start up and growth and have the necessary business (note BUSINESS) experience to coach you through the ups and downs. Here are a few tips:

­ Research who can work executively with you. Life coaches are great but it’s important your coach has business focus.­ Be open­minded. I haven’t spoken to one person running his or her own business who has regretted hiring a coach.­ Identify what role you want them to play. Be clear about what you are going to get out of it and ensure they agree with that.

The most successful business people did not achieve what they did on their own despite what the media may sell you.

who is your caddie?..

6. Hold your nerve

It’s the best piece of advice I’ve ever been given. When things look bad, motivation is low, you have a difficult customer, or, things are not going as well as you had planned. HOLD YOUR NERVE!

It’s as sure as life changes, things are not going to go as well as you had thought. Initial growth will be slower in most cases and if you think it’s going to happen quickly, it isn’t, unless you’re very lucky. Any schedule, budget or plan you set, always double it and, if you can, treble it. Despite what people think you are a start up business for the first 5 years. Then you can catch your breath but, only for a moment.

Never underestimate how tough and emotional it’s going to be. There are highs and lows, steep learning curves and being able to deal with them is one of the most important weapons you will have if you want sustained business growth. It’s often the difference between people growing and those that chuck it in. See why you have to love what you do?

Persistence is incompatible with failure. Holding your nerve is an essential business skill you have to develop.

hold your nerve..

7. Chase cash and profit not turnover

And chase them in that order. Too many start up businesses chase the turnover and okay it’s got to come in at the front end to drop out the bottom as they say! But too many businesses turnover lots and make sod all. Even worse they may be making a profit but cash flow stinks.

There are some fundamental learning points here:

­ Choose your customers carefully.­ Manage the cash flow like a hawk watches its prey.­ Cash is different than profit…know the key differences.­ Chase debtors religiously.­ Always ask for a deposit up front 25% ­ 30% if it’s appropriate.

When you can, set up a business reserve account. Put spare cash (I know would be great if you had some) in there and save for a rainy day because inevitably there will be one and when you are least likely to expect it. The ones who did it are now saying ‘what economic crisis?’

save for a rainy day..

8. The things you need to avoid…or learn to manage

These are the pitfalls, the things the other business start up books don’t talk about but they are real, very real, and avoiding them or learning how to manage them is critical to your business surviving those first few years and growing in the way you want it to. They are based on ‘coal face’ experience and what other small business owners have said:

­ The biggest barriers to growth are internal (in your head) not external (the market.)­ Grow your business customer by customer.­ Don’t run before you can walk. The Aston Martin will have to wait!­ It’s about leveraging your knowledge not necessarily your products.­ Customer experience is really your only competitive advantage.­ Embrace change or be consumed by it.­ Learn how to hold your nerve.­ You aren’t going to get rich quick and neither should you want to.­ Stay away from people giving you advice that haven’t been there, had the sleepless nights or gone bust. Running your own business is a unique experience; those that haven’t done it just don’t understand the ride.

embrace change..

For more of Ann’s ideas and thinking go to www.annholman.co.uk where you’ll find free stuff, a blog and information about Ann’s seminars.