Stephen Hemmings – Partner
Transforming a groundbreaking idea into a successful business proposition is the ultimate goal for many entrepreneurs and breaking away from the protective environment offered by incubators and accelerator programmes is a tempting pathway to success.
Nevertheless, in the early days it is important for entrepreneurs to temper their enthusiasm with a sound foundation of business management knowledge. Here are 10 key steps to running a successful business for go-it-alone entrepreneurs.
Advice for Entrepreneurs
Step 1 – Have a plan
A three-year business plan and a clear strategy are essential for every entrepreneur. A good plan can be helpful in measuring whether the business is on track, along with identifying any potential opportunities or threats which should be acted on. Allowing the management team to have a comprehensive view of all aspects of the organisation is vital for the growth and protection of the business and its interests.
Step 2 – Use robust forecasts
Transforming an idea into a successful business proposition with longevity depends on having robust forecasts in place. Controlling spend in the early days of the business and preparing for future growth, especially in terms of people and resource, will help to ensure that the business doesn’t over-stretch itself in the future.
Step 3 – Lock in talent
In the crucial early stages of developing a business, retaining talent is important. With many entrepreneurs unable to offer large cash incentives to employees, business owners must think of other ways to attract and retain the right people. Attractive workplace cultures and business identities, along with employee ownership schemes, such as an Enterprise Management Incentive (EMI) scheme, can help reward key staff members in a tax-efficient way.
Step 4 – Plan for overseas trading
Overseas trading can offer a potentially-lucrative, untapped market for entrepreneurs. Seeking advice from organisations with international reach and planning for import and export operations are both useful proactive activities for new businesses. It is important to consider the practical and financial logistics of overseas trading – will a separate trading entity need to be set up? Or a new branch office opened? Are there any intellectual property implications? Should national tax regimes or licensing arrangements be taken into account?
Step 5 – Choose the right business structure
Adopting the right business structure can be beneficial for businesses in a number of ways. Internally, it allows management teams a greater amount of visibility and control over their organisation and to potential external investors, it gives the venture a degree of credibility and shows that an entrepreneur has control over their business.
Step 6 – Think of time as a resource
Many entrepreneurs want to do everything themselves, but is this the best way to spend their time? Would they be better off adding value to the business in other ways? For example, tasks such as pulling together cash flow and balance sheets can be outsourced to accountants for a fairly modest fee, freeing up time for entrepreneurs to work on more important matters; pushing sales or securing investment.
Step 7 – Keep an eye on costs
Managing cash is important for all small businesses and keeping the books in good order from the start is fundamental. Solid in-house accountancy practices not only allow accurate forecasting, but also mean budgeting for areas of extra spend, such as sales and marketing, can be well planned from the start.
Step 8 – Keep investors close
Entrepreneurs need to demonstrate to potential investors that they are in control of their business and that they offer a credible investment opportunity. Presenting a clear business plan and accurate financials can help reassure investors that the business is capable of hitting its targets.
Step 9 – Keep suppliers closer
Fostering strong relationships with suppliers is an essential part of growing a business. Having the right supply partners in place allows entrepreneurs to react rapidly to market changes and move quickly to act on opportunities that could benefit both parties.
Step 10 – Risk assessment
All entrepreneurs should carry out a risk assessment of their business model. Data protection and cyber security are two areas which could be at risk. Smaller companies often hold a large amount of data, making them targets for ‘spear-phishing’ activity. An annual ‘cyber essentials’ health check is a good way to minimise risk and also potentially reduce commercial insurance costs.