I’m going to devote the next few articles to the subject of starting and growing a small business because I think that 2021 is a good time to start a business, especially in the online space and working from home.
There are a lot of opportunities out there if you look for them and you don’t have to go all-in and start a business, you can operate one as a side-line or side hustle if you prefer the term, to test the water and your own aptitude for business and entrepreneurship.
But there is a lot of misinformation out there and it is easy to fall for the advertising promises of living a dream life, working from your phone/
laptop while the money flows effortlessly into your bank account. There are many people out there eager to part you from your money with those kind of promises, just as there are always a ton of January fitness experts and diet gurus promising you the latest miracle weight loss cure, with a new machine you can purchase with 3 easy payments!
Weight loss and improving your fitness go hand-in-hand with hard work, effort and discipline…the same basic qualities that are required to start and grow a small business.
Please don’t fall for the scams and especially if you are new to and plan to operate in the online world.
You may be wondering if 2021 is the right time to start a business and I can tell you from personal experience that there really is no such thing as a right or wrong time to start your company. You will always face challenges and you will always have to deal with some form of competition.
I started two companies in two different recessions – my main business, a telecom staffing company in the early nineties, was started in the IT recession from the living room of my South London apartment, financed with a credit card.
Around ten-years later and during the dot.com tech crash, I co-founded a technology software and services company in the same industry.
Both recessions had created different sets of business problems and in the case of the staffing industry, there was a growing need for interim or contract staff to scale projects on a demand basis as opposed to hiring permanent employees. On the software front, we were addressing specific technical planning issues that would improve efficiency and optimize spending.
But in both cases, I faced fierce competition simply because there were other entrepreneurs and existing companies with the same ideas and customers were far more cautious when it came down to spending money…getting a sale was one thing, but actually receiving the cash was another matter!
Starting a business requires a huge amount of time, effort and self-discipline, not to mention the money you need to survive the first year, which is the time-frame of when most companies fail, simply because they don’t generate enough cash…or they are generating sales but are not able to collect the cash.
It’s the same end-result either way and I am going to cover both sales and cash-flow in a future article.
Self-discipline is hugely important, especially when working from home. The hardest step for me to take was to get out of bed and walk into the living room to start work; there were many days where I simply didn’t have the desire to do anything.
My days involved cold-calling companies to try to find opportunities for the engineers I was representing. There are only so many rejections you can face before you get totally demoralized; it’s not as if I was an inexperienced salesperson, because I wasn’t. It was just a lonely process to go through at the time and with very little support.
Thankfully I re-connected with the discipline I had gained through martial arts, which I was practising at the time and to give myself a sense of purpose, I first took a cold shower to firmly wake myself up each morning and then I reminded myself that I had a commitment to the engineers I was trying to find opportunities for and I was letting them down by not trying my hardest.
It worked and slowly I would start to make headway…but I came close to giving up on many occasions.
When people ask me if there is any one thing that determines success in business, I always say it comes down to having the right mindset. When you start a business, you are going to be tested in many ways and you need to be resilient, to remain calm under pressure and to keep going no matter what.
Preparation and planning are areas that so many people fail to address, including me in my early business career.
My first technology staffing business failed, and I had started the business with four colleagues in the “power 80s” that were all about image, fast cars, success…and debt!
At best, all of us were excellent salespeople, building up a revenue of six million pounds in a couple of years, but we lacked the basic skills to run a business.
With inflated egos, wardrobes of nice clothes, German sports cars and a few hundred thousand pounds of debt, we succumbed to the inevitable as the “bust” period that follows the “boom” arrives and the banks had the audacity to demand we pay back their money!
It was a short, sharp lesson that forced me to go back to the drawing board and actually learn what is involved in running a business, to start by researching the industry I was operating in and to make sure I that I knew it backwards. Then I had to familiarize myself with basic book-keeping and accounting skills to keep track of the money. I was lucky from the sales and marketing perspective, because that was my background.
You simply cannot do enough research, and this is the first step to take before you even consider writing your business plan and certainly before you start trading. It doesn’t matter if you are starting a landscape gardening business, or an e-commerce store, you have to understand the dynamics of the industry in general and your customers.
Think like an investor, because you are one…you are going to invest your time and money into your own company for a return and before you invest, you must know the conditions of the overall market and then the problems and challenges you are going to solve for your specific customers.
Also, bear in mind that you don’t need to re-invent the wheel – too many people agonize over how to differentiate – when I started my telecom agency I was up against some big, established companies, but I managed to take market share from them by giving customers a much more personalized and transparent service.
Many of my competitors operated around a veil of secrecy when it came down to discussing their operating margins with clients, I decided to operate under an open book policy where I fully disclosed what I was making, and it worked well with customers who loved the transparency.
I am currently working with a start-up real estate brokerage in the US and in an industry that is looking to maximize technology, the young entrepreneur who I am helping is going back to good old-fashioned customer service as his differentiator. He believes people are crying out for real and meaningful conversations as well as honest guidance through what is likely to be one of the most significant purchases of their lives.
So far, it’s working well.
Whatever business you decide to launch and no matter what industry you are operating in, make sure you don’t skip or rush the research phase and also remember to keep your research up-to-date – your goal is to gain enough knowledge to be able to accurately predict trends in your industry and this will help you get ahead of your competition and start to anticipate the needs of your customers.
Next month I am going to talk about putting the research into action by producing the dreaded business plan!