Here are the insights from our breakfast with small business owners
Starting a business at any time is challenging, but the economic climate of the last few years has made it even more difficult for fledgling firms to get off the ground.
Yet last year saw more new start-ups than ever before – some 500,000. And the total number of businesses in the UK is now around five million. That’s because, despite the challenges, there has never been more support for start-ups and entrepreneurs.
The rewards of starting and growing your own business can eclipse the challenges, according to the small business owners who came to our Dynamic Roundtable on 29 May, in partnership with RBS.
We invited a diverse cross-section of London start-ups to the panoramic roof of the Park Plaza Westminster Bridge to talk about their experiences of starting and growing their small businesses and the share their insights into problem-solving in the early days.
Advice and help
Almost all of the entrepreneurs on the panel said they had some kind of mentor to help with running and planning the business. Mentors were an “invaluable” resource for some, helping the entrepreneur have structure and focus – even just setting time aside to reflect, plan and talk about the business was helpful.
Some panellists had more than one mentor to help with the different aspects of running their own business. “Different mentors have different strengths,” said one entrepreneur, while another said having a mentor from another industry was more useful than one in the same area, as she knew her own industry well.
The internet was also a huge resource for everyone on the panel. They recommended:
- Watching TED talks
- Reading and watching interviews with leading entrepreneurs
- Use book summary services, such as getabstract, instead of reading a whole business book. They can be surprisingly useful and accurate, according to one panellist
- Keeping up with industry news
- Talking to similar businesses about problems – for example joining closed Facebook groups with start-ups in the same industry.
- Talking candidly about issues with people who had very similar businesses in other parts of the country helped one panellist overcome common problems
- Talking to professional advisors and your bank manager
- For entrepreneurs with children at home, a good way of rationalising problems is by asking a child what they would do, according to one advisor. Explaining the problem to the child helps simplify it, and you often get a straightforward answer
The panel found time management as a new start-up owner one of the biggest issues they had to grapple with. In starting a business from scratch, an entrepreneur is forced to do almost everything themselves, even though they might get help from friends and family. One of the challenges is balancing the day-to-day running of the business with the planning and administrative side. But there were also answers to these problems. For example, one entrepreneur said they spent a lot of time driving to visit clients, so it became necessary to find ways to multi-task while on the road.
Ways to deal with this:
- Outsource and delegate to people you trust
- Have a balance between employees and consultants/advisors, as the latter can offer greater flexibility and expertise to suit a varying workflow
- The panel also thought it was important to be able to have a stress outlet, whether this was exercise, talking to friends or a bottle of red wine.
One of the most common – and underestimated – challenges of starting up is getting the business’ name out there. Many entrepreneurs are busy concentrating on getting the product or service right and hope that customers will automatically be attracted, which isn’t the case.
However, many of the panel found good ways of dealing with this challenge:
- Social networking was seen as a helpful tool, but even tech-savvy people didn’t always know how to use social media for marketing. Entrepreneurs also neglect to take into account the cost of spending time on social media. It can help with B2C businesses, but might not suit B2B
- Ask your customers to provide testimonials in exchange for something free, as they help engage potential customers. “The most valuable customers aren’t always the ones that spend the most money with us,” said one business owner.
- Encourage reviews of what you do on sites like Trustpilot
- Get referrals to other businesses from your customers/suppliers
- Understand how your customers communicate so you can target your marketing, rather than using a scattergun approach. Talk to them!
- If you want press coverage, a personal approach is essential. Follow and talk to journalists on Twitter, try handwritten letters rather than emails, and send them free samples of your products
- Enter awards – no matter what stage you are at. “You’re never too young, or too small,” said one panellist
There are very few businesses without some form of financial concern, whether that’s cashflow or how to finance growth. For example, one panellist talked about how her business was doing well in the first year – until she started taking a salary, then it became more difficult.
Cashflow problems are the biggest killer of small businesses – particularly start-ups. Some of the panellists found ways of reducing pressure on cashflow:
- Get customers to pay in advance if you can. If you haven’t thought about doing this, you may be surprised how readily customers are happy to accept upfront payment terms
- Offer deals to encourage recurring business
- Provide discounts for speedy payment
- Create good relationships with your suppliers and ask for credit. One business owner was able to pay 25% in arrears, working on trust
- Financing growth at different stages can be a challenge too. But there are plenty of options for entrepreneurs who have realistic, accurate and up-to-date business plans:
- The government’s Start-Up Loans scheme
- Partnerships with suppliers
- Talk to your bank early. RBS are always keen to help – find out more here
- Grants, particularly if you’re under 30
- Consider a personal guarantee
- Some people are finding success with crowd funding
Next stage and exit strategy
When you’ve been trading a while, it’s natural to start thinking about the next stages of the business, where you might want to take a step back, or the possibility of selling it.
Key to the next stage is getting the right talent in place to take over the business or manage parts of it. Many entrepreneurs don’t consider franchising but it’s a great option for letting the reins go.
If you’re looking to sell the business, don’t approach just one buyer. Consider who might be interested in buying it, such an expanding company or a competitor, and get a few potential buyers interested to create competition and so up your prices.
With thanks to our panel:
Safwan Adam, Franchise Owner, CeX
Tom Bannister, Head of Communications, British Franchise Association
Ben Blomerley, Founder, AskHerFriends.com
Mike Bokaie, Chief Executive, Casis Media
Zoe Brown, Business Manager, Bright Ideas Trust
Claire Burrows, Owner, Air and Grace London
Ian Carlier, Enterprise Director, learndirect
Simon Eggleton, Director, Auditel
Helen Gallon, Founder, Dog Smart Grooming
Harriet Green, Founder and Director, Sweet Hangovers Bakery
Charlotte Hintzen, Co-Founder, By Hand London
John McLaren Stewart, Managing Director, ATA Corporate Risks
Giles Mitchell, Co-Founder, Our Honest Foods
Daniela Miteva, Founder and CEO, HUB42
Nigel Phelps, Managing Director, Catalysts Ltd
Lily Rice, Founder, Lexie Sport
Mike Ruffles, Head of Content & Social Media, Virgin Startup
Chris Simpson, Franchise Owner, Business Doctors
Curtis Thompson, Owner, Local Honey Man LTD
Paul Whitford FLC, Director, Branch Business Banking – RBS England & Wales
David Williams QFP, Director, Franchising – RBS England & Wales and NatWest Scotland
Thank you again to RBS for supporting this event.
Thanks also to the Park Plaza at Westminster Bridge for accommodating us.
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