Do you need it or do you want it? (Business start up tips)

Tips for a business start-up

As a SFEDI mentor; SFEDI is a UK government run recognised business mentorship programme for start-ups to get advice for free from established business owners and experts, I often find myself, when looking at some start-ups, in a position where I want to say “What the hell are you doing?” but I have to use the skills taught to me to get the new mentee to realise what may be going wrong for themselves.

A massive mistake I often see is young businesses is over stretching themselves, and going for appearance over quality, like getting themselves an office, a new branded van, or paying a fortune to be in an exhibition and lots of unnecessary purchases.

Nothing stifles creativity more than stress to pay the bills for things you probably don’t need

A mistake I made when I started was registering for a limited company in the UK, I wanted to protect the Netmediauk name, and it sounded glamorous, and made me seem bigger than I actually was. So limited sounded like the right choice, only ten months down the line and £600 spent on accountant’s fees which could have been much better spent on more networking events or more online marketing for my UK set up. I should have gone sole trader and done my own Tax returns, having an accountant does not mean they do your day to day receipts, they are not bookkeepers, I still had to do all those and that took me a good few hours every week.

Often I get to meet would be start-ups who are hobbyists, who want to turn their craft into a business, this one comes with major alarms to me, very few indeed make this into a profitable reality, they suddenly realise after a few weeks that turning their pastime into a business every day loses the relaxing appeal it once had. I mean I love doing crosswords in my spare time, but if I had to do 5 a day for a living I would soon hate them! They then realise that all the branding and all the office costs are a massive waste of time and they become another statistic.

When I was a young lad I begged my Mum to pay for me to go to Karate Lessons and I wanted the full white suit and all the gear before I went, Mum in her wisdom said if you manage to stay a month, sure, so I turned up in for my first lesson in my shorts and T shirt, and ten minutes later after being felled to the floor by a girl!  I realised that it was never going to be for me, and I returned home to see my Mum hiding her giggles and smugness after I quit after just one hour!

To start a business from scratch I feel the best way is to always take it as far as you can go before moving to the next level where you have to pay for staff or new premises. Operate on minimum overheads basis at all times and the least amount of Investment to pay it forward to yourself with time, because that’s what a new start-up has ample of.

 Ask yourself, can I do this from home, in my garage or the spare room? Can I start selling a few first to friends and family and perhaps local businesses, before I go and pay to make it legal? It feels really good when you can pay for your company registration out of the profits from what you have sold already, making your business totally self-sufficient. All receipts before you register your company are taken into consideration as pre-start-up costs so even the tax man knows you have to reach a certain point before you can go legit.

Don’t think people are going to think any less of you because you don’t have a business card yet, or have a swanky office with a dedicated phone line, think positive, the potential client may see it as a plus, that you will be very reasonably priced as you are a start-up, everyone was a start-up once!

Remember Apple computers started in a garage! 

Being totally honest with people from the beginning is always a plus;

“Mr Jones, I know you are probably looking at a few companies who have been established a lot longer than us, but rest assured our price does not reflect executive cars and shareholders bonuses, and we will not be passing on our overheads to you in our quote, we are basing our service purely on quality and our ability to provide you with the correct solution at the best price, and we need to do a good job for your referral to help us grow” Is quite a persuasive close!

Robert Kiyosaki the author of ‘Rich Dad Poor Dad’ range of bestselling business bibles, tells us that most ordinary people have no wealth training  whatsoever, for example ask most people when asked what they would do if they won the lottery, and they say; buy a big house, well in most cases this is a big mistake and actually becomes a liability, because when you are working in a job, buying property is a good decision because you will probably stay there for over ten years and that’s when property historically starts to make money, but lottery winners with some knowledge of finance would rent , because they know they will probably move sooner than ten years, and they can probably make the money work harder in Interest rates and business investment! So business people need to learn about money as much as they do about running their own little business start-up.

Ask yourself the question every time you make a business purchasing decision; do you want it, for vanity reasons or it will boost your ego and will it actually make us money? Or do you need it and it becomes an absolute necessary expenditure to grow the business?

Dedicated to all the dreamers out there!

Alan owner of the Biz-find directory franchise that started in my Mum’s granny flat in the box room! and moved to swanky offices in a studio Condo in Bangkok