As part of Business News Wales ongoing series, we asked our panel to give their advice to start-up companies and how to stay ahead and become a success.
Mike Hayden, Head of SME banking
Some people like having a boss – others like being the boss. Running your own business can be exhilarating and terrifying in equal measure but more and more individuals want to go it alone.
So, what do you need to do before taking the plunge and going out on your own? Preparation, preparation, preparation!
Of course, you don’t need to be expert at everything when starting a business, but there are certain personal qualities that will stand you in good stead. You should be self-sufficient, have plenty of initiative, be determined and resilient, be responsible, have a bit of imagination and be prepared to ask for help when you need it.
Get advice from as many people as possible including your Accountant, Bank Manager, local Enterprise Agency, friends, families, other business people etc. It is a fact that businesses that seek advice are more likely to survive longer and grow quicker.
Matt Sutton | Director
Having the right people in your team from the outset can be the difference between success and failure with start-up businesses. Make sure you take on people who share your drive and enthusiasm for your brand and who will work together as a team to grow the business. Equally it is of vital importance to ensure you have a strong legal team behind you to walk you through the basics, which could include everything from setting up the company, putting together a partnership or shareholders agreement, and protecting your intellectual property rights. When starting a new businesses many people make the mistake of trying to do everything by themselves to save costs, and legal advice is often seen as an unnecessary expense in what is already a costly venture. However, getting the right legal framework will undoubtedly save your business time and money in the long run, especially if things don’t go exactly to plan.
Jayne Kendall, Product Marketing Manager
Once online, a common hurdle faced by many small businesses is being visible and driving people to their website. Making potential customers aware your business is online can be a challenge for everyone; from start-ups to established businesses, both e-commerce and general information sites. How can you get seen online? Here are some ideas to get you started.
- Make sure users have a good experience on your site
Before sending customers to your website you need to make sure it’s optimised to be quick and work on different devices. You don’t want to put in the work driving people to your site for them to press the back button straight away because they had to zoom on their mobile or wait a long time for a page to load. Google offers a free Mobile-Friendly Test where you can enter your website address and get a grade for how well your site performs on mobile devices. Google also offer PageSpeed Insights; a tool to test your website’s speed that even gives you some areas you need to improve on. Not only does your website’s mobile optimisation and loading time affect how you appear in search engines, by improving the customer journey you’ll be encouraging potential customers not only to visit your website but to spend longer online.
- Create and share content
Create a content hub to engage customers and share your content to drive traffic to your website. You should aim to post new blogs or other content pieces, such as ‘How To Guides’, that appeal to your target audience frequently (try for one post a week). Optimise each content piece by utilising keyword research to improve where your content appears on search engine results and remember to include social sharing icons to encourage customers to share your content. Make sure you dedicate some time to think about the title of your content pieces to make sure they are compelling enough to get customers to click through to your website to continue reading.
- Think about SEO
It’s been reported that websites on the first page of search engine Google receive 91.5% of traffic while only 4.8% of traffic goes to the second search page. This goes to show the higher your website appears in relevant search engine results the more visible it becomes to customers. Keywords, content creation and link-building are all key factors to improving your search ranking. Why not start by researching relevant keywords to your business and industry using Google’s Keyword Tool?
- Get active on social media
Social media allows you to send an interested and engaged audience straight to your website and can be a valuable tool. Some opportunities you can explore to make the most of your social channels include sharing blog posts, promoting your products or services and showcasing your website link in a prominent location. Set aside some time to spend on social media and actively engage with relevant conversations and your potential customers. It’s worth checking that your website link is in all your business social media bios too.
- Investigate guest blogging
If you enjoy writing about your knowledge and industry you could investigate guest blogging, where you write exclusive content for other blogs, and by including a link to your website you could potentially grab traffic from this source. You can search for websites and blogs who are looking for guest contributors by searching for terms such as [“write for us: (industry)] e.g. [“write for us” travel]
- Set up social ads
There are many online advertising formats and platforms that can drive traffic to your website, including paid search and social media advertising. For example, PPC (pay-per-click) advertising on Google displays your advert at the top of the search results by bidding to appear for relevant keywords. And social media advertising displays your advert to targeted audiences. Just make sure you optimise your adverts for link clicks in the set-up process as well as including a clear call to action and your website address.
- Email your customers
A customer database is a list of engaged customers who have displayed an interest in your business before, so why not send them useful and interesting content? Just remember to include links to your website, where relevant, so that you can drive traffic to your site. Although it can be daunting to start building an email list from scratch, even simple additions such as placing a newsletter sign up on your website, investing in some social media advertising or exploring how to collect emails offline can be a great place to start.
- Don’t forget about offline
Are you promoting your website offline? It’s an easy area to forget but promoting your online presence via offline activities can not only increase traffic to your site but can help raise general brand awareness too. Start by making sure your website address is included on all printed material – such as brochures and leaflets – and advertise your website within your physical store (if applicable), so you can tell both new and loyal customers you’re online.
- Show you can be trusted online
- Be generous
Can your business offer a free product or service? Giveaways have the potential to generate a buzz, which you can supplement using advertising and offline promotion, which can attract customers and drive them to your website. Once you know the nature of your offer why not start by promoting it on your blog, social media and offline materials (where you can)? Who knows, you might be pleasantly surprised by the response you get.
- Keep track
Although not a direct source of traffic in itself, Google Analytics can provide you with a host of useful data about your website including where your traffic is coming from. By monitoring the results regularly you’ll be able to see what platforms and strategies are working best at getting traffic to your site. You can invest more time, energy and resources into these campaigns to increase the amount of traffic coming to your site. You can also gain insights into what pages on your site are performing the best, your visitor’s demographics and the highest performing content pieces, all which can inform your future strategies.
Don’t be afraid to try different ways of getting traffic to your website, different tactics will work for different businesses and websites. For example, businesses with e-commerce functions may find it easier to provide offers to customers, while those with a blog may find it easier to guest contribute and get their website in front a larger audience that way. You don’t just have to pick one way to drive traffic to your website either, it could be that a mixture of these methods work well for your business.
Douglas Haig, Vice chairman
I’ll keep it simple, understand your market need, your numbers and stay focused:
Market Need – Understand what market you are going into and what you are doing to differentiate yourself. Very often someone will simply say cost; that they will be cheaper. Whilst this is tempting, it’s not always sustainable if you are trying to grow a business and sometimes the belief you can do it cheaper is down to the fact that not all of the costs are apparent at the outset. Really understand why others will come to you in the market over your competitors.
Numbers – Understand your numbers from the beginning. Really understand the costs, nail them down and make sure you know your cash flow especially if you are going through rapid growth and to the point you are slowing down. It’s been said before, because it’s true, many profitable companies have gone bust because they thought they understood their cash flow and didn’t.
Focus – Keep to one thing and do it really, really well, especially in professional services. I’m the worst to say it but focus on one thing and make it amazing. It’s so easy to become distracted, over time, the ability to do things better than other people in your industry will ensure you have better quality clients that pay you more.
Leon Window, Owner/Director
Starting up in business is a daunting task. Be patient. Success does not happen over night. You need to work at it.
My advice is simple; just do it! Pile in, work 70,80,90 hours per week, make mistakes, take chances, and keep smiling.
Starting out is full of promise and uncertainty. Create structure by setting out clear and manageable objectives. Don’t be afraid to make mistakes, as you will learn a lot from the process, that you can apply to your next endeavour.
Keep a close watch on your finances, and don’t run before you can walk.
Ultimately, building a business from a start-up is a matter of controlling your business processes, maximising opportunities, and surrounding yourself with good people.
Seek advice and put the effort in; the rewards are there for those who are prepared to really give it a go.
Just remember that you are doing something that many others won’t do!
Smart Anchor Solutions
Mark Hindmarsh, Director
While the sources vary, it’s often stated that most new businesses will fail within the first 18 months. The number one reason why I think so many businesses fail so quickly is because the founders don’t realize how hard it is, how “all in” you have to be, and how much talent it takes to be a successful entrepreneur.
I’m not promising that the following advice for first time founders will guarantee they will survive the first year, but without these considerations they’re not setting themselves up for success.
BE PRACTICAL ABOUT YOUR MONEY – Cash is king or more specifically cash is oxygen. How much money do you have to stay afloat and for how long? Ideally you should have at least 9 months worth of operating overhead. No matter the situation, starting a new business, particularly one that requires an upfront financial investment and not just your time, drains money. You need to understand financially what it takes in order to pay for necessities like rent, supplies, staff wages and inventory and (that doesn’t even include your own personal expenses).
BUILDING A BUSINESS IS A HUGE TIME COMMITMENT – By starting a business, you have made a decision that in reality will consume a majority of your time, especially in your first year. Be well prepared before you make the leap as substantial sacrifices will likely need to be made and as such considerations must be given, especially if you have family commitments.
EXPAND YOUR HORIZONS – Surround yourself with the best Advisors and Mentors you can find. Individuals who have been there, done it and who have the t-shirt. Learn as much as you can about your industry immediately, become an expert in that industry and build contacts within it.
RECRUIT WELL – Create the right culture to attract the team you want. Find the right co-founders and first employees. As tempting as it may be to staff your new business with friends and relatives, this is likely to be a mistake. If they don’t work out, asking them to leave will be very tough.
STAY COMMERCIALLY FOCUSED – Put most of your energy into creating product/market fit and knowing who your customers are and what they want. Create or offer a product or service that people adopt very quickly, or that you can reliably sell repeatedly. Aim to generate recurring revenues as fast as possible and don’t take your eyes off that prize.
David G Thomas, Manager
Starting up a business is a scary but exciting opportunity. My best advice is to plan what you are in business for, know your market and get all your ducks lined up i.e. have a business plan – but be flexible in business don’t be too slavish in adherence to methodology and don’t ignore an opportunity if it isn’t in your original plan. Do the basics i.e. get your bank accounts sorted, get your book keeping sorted and get your business registered in whatever form you are going to run it – partnership, sole trader, ltd company etc. Consider attending a business start up workshop, such as those run by Business Wales this is a real top tip. These workshops are full of really good quality information giving top tips and information on potential pit falls. One thing that I would suggest is keep your eye on the cash flow. So many businesses fail because they don’t manage their cash flow and essentially run out of money, so make sure that there is a plan b! Plan your expenditure and make sure that your income is on track, and if that means chasing up debtors then chase them, you simply cannot give your products or services away for free. If you can find a mentor and meet regularly with them that really helps too. Finally be innovative, keep looking at the next opportunity and plan for it, but don’t chase idle fancies that have no place in the market.
Graham Leslie Morgan, Managing Director
Whilst the longer sunnier days maybe a welcome arrival against a dark dismal winter the consideration that goes into starting a business should not change from one season to the next. The core principle is truly understanding who is going to purchase the product or service you are convinced you can sell.
The area I often find have not been fully though through are:
- Why do you want to go into business? What is your true motivation and are you prepared to work extremely hard and over long hours during the early years to get yourself established? Going into business if not for the faint hearted and you really need to challenge the why you want to do it. Certainly, it is not an easy alternative to full time employment as you get yourself moving forward.
- What are the products and services you feel you can sell? Why is your provision different to anything already in the market and most importantly who will be buying your wares? I would always recommend you utilise the services of an independent emotionally detached expert who can independently assess what you say and feel are correct. It is very easy to see everything slinging to your views when in essence they do not. ‘Rose tinted glasses’ concept!
- What does your pricing structure look like? Is there a niche aspect to your market or is there a differentiated approach that command value. Entering the market as the cheapest is never a good option unless you have significant scale! Setting a price that reflects the quality or uniqueness of what you provide from the start is essential. You cannot have top quality provision at lowest price. Consumer smell a rat!
- It always takes much longer to establish customers that you expect! Be prepared for 6 to 9 months where you may not be able to draw income from your business. How will you meet your normal living costs?
- Have a clear plan on event aspect of your business model prepared in conjunction with an expert. The plan keeps you on track and identifies efficiency. It also means any significant investment in IT, Marketing and Business Development are clearly set out at the start and you are not persuaded to spend much more than is necessary.
- Make sure your finance and funding package has some contingency for the unexpected. Bankers in particular do not welcome and early request for more funding due to your cash flow plan being weakly constructed.
- Keep all activity going as planned. Do not stop doing something that was considered important due to it not generating quick results. Networking is a good example of this. Its takes time to go through the know, like and trust cycle before folks want to deal with you.
- Confidence is king! You must not let the challenges of running a business reflect in the way you present yourself! Great actors needed!
Along the way it is a good investment to have an independent advisor who meets you monthly during the first year at least to challenge you and act as a supportive sounding board that helps you see the wood for the trees.
Most importantly have fun!!
Grapevine Event Management | Founder
Starting a business is the most exciting and, at the same time, the most terrifying thing someone can do. Luckily there is a huge amount of free advice readily available for start-ups. When I started my business 6 years ago I contacted Business in Focus and they put me on to the Business Wales courses. These provided some great beginners advice from business plans to marketing and they were free to attend.
Networking is key to building your contacts and Linked in is a great tool for this. As I was new to the Cardiff Business Scene I joined a few relevant linked in groups and asked for recommendations for networking groups, the invites and suggestions came flooding in. Whilst the business was slowly getting started I had time to network and met some great contacts.
The big learning curve for me was not being afraid to ask for help. Realising people are willing to help with genuine offers of expertise and advice along the way, has really helped Grapevine to succeed.
Managing Director, CPS Group
Starting a business is a daunting, yet exciting prospect. Creating a business from nothing is so rewarding. Having gone through this process, I have learnt a number of things about me and the business world.
Only employ and keep people on who live your company’s values. Having the right people around you is crucial to the success of your business. Also, their behaviour will mould the future of your business and its perception in the market.
You must know what good is. When you are doing well, understand the reasons for this and ensure you ingrain these in the way your company operates.
Always learn from your mistakes. You will make many of them, as making mistakes is a natural process for learning. You will benefit from mistakes as long as you understand where you went wrong and how to improve next time.
Walk away from low value business. Not only does it make you work hard for less return, it reduces the opportunity for you to win more profitable work and can potentially devalue your brand.
Communications Advisor | FSB Wales
Starting a business can feel daunting. It often feels as though there is both too much information and not enough.
Key things to remember are that successful new businesses have a plan and have the confidence to follow it through. Planning from the beginning can help identify key priorities and issues that will determine your ability to grow your business. Thinking about these issues at the beginning of the process will put you in a much better position later on.
It is also important to take advantage of advice on things such as business and budgetary planning, marketing, premises, and tax and accounting to ensure that things start up in the best way possible. There are portals in Wales offering advice from organisations such as Business Wales and many others.
It is also important to be clear from the beginning about what your brand is and what it says about you. A powerful brand will remain in the mind of a customer after they have left – bringing them back again, and ensuring that they recommend you to friends. It is also your first impression on a prospective customer. A good brand offers the opportunity to be entirely unique and set apart from your competitors. So what should it say about you and your new business?
Also, think about how you are going to communicate with your audience; do you need to start up a website, social media channels, or other ways of keeping in touch with customers and consumers? Ensure that your communications look professional and are kept up to date.
FSB offers new businesses a tailored package of support under the “Business Creation” category which allows members access to advice on starting up a business and entering a new market, financial support such as business banking and card terminals, and other assistance by offering networking events and a voice at government level by the FSB Wales Policy and Public Affairs team.
Overall, it is important to remember that you started a business because you had the vision and passion to deliver something new and exciting to the market place. Small businesses hire local people and spend money locally; they are the centre of a local economy and contribute hugely to their communities we need to see successful small businesses for a successful economy. Good luck with your new venture!