Category Archives: Free lunch start-up tips

Are experts overrated?

In my work with young people who are thinking about setting up their own business, I constantly stress the importance of honesty. I mean honesty with themselves as much as with anything else. Being self-aware and having the confidence to share personal weaknesses, as well as strengths, can be very powerful in our famous-for-15-minutes-for-doing-nothing society.

Of course, we’re taught to ‘present our best side’ at job interviews and on CVs and a certain amount of ‘embellishment of the facts’ is almost expected. But I tell young entrepreneurs when it comes to business plans, it’s best to be realistic but positive. Business pitches with sky-high sales expectations and false claims about relevant skills (‘extensive experience in market gardening’ was how one young man described his two-week work placement) will be found out and can ruin reputations.

Which is not to say we have to spend all our time telling others why we’re a liability rather than an asset – that’s not the way to make friends and influence people.

In a previous advisory role I worked with charities and social enterprises and, at a first meeting, I’d say “tell me a bit about your organisation”. I still remember the Chief Officer who said “we’re good at this, this and this, we need to get better at this, this and this”. Here was someone I could work with – he knew what he didn’t know (if that doesn’t sound too Donald Rumsfeld). Not surprisingly I’ve forgotten those who, at that first meeting, denied they had any areas for improvement (in which case, why was I being brought in to support them?)

Readers of earlier blogs will know of my love of language and my loathing of carelessly used abbreviations, jargon, and red-rag words such as ‘deliver’ and ‘engage’ which are so vague as to be meaningless. It’s a lexicon for self-styled experts, so insecure in their knowledge and status that they feel the need to dispense wheelbarrow loads of bullshit.

Whenever I doubt my own knowledge (more often than not!) I tell myself that a real expert is prepared to admit their ignorance. Many years ago I was at a public meeting with the then Chairman of the Forestry Commission. He was asked an apparently very straight forward questions by a lad in his early teens. Lord Taylor (the ‘tree expert’) paused for a moment then said, “you won’t believe this, but I don’t know the answer to that… but I’ll find out and let you know.

And even if you are an expert – with certificates, letters after your name, and all the associated bells and whistles to prove it – don’t think you can sit back and bask in the glory. There’s something else to keep you awake at night – the ‘impostor syndrome’. Also known as the fraud syndrome, the term was coined as recently as 1978 by clinical psychologists Pauline Clance and Suzanne Imes. It afflicts high-achieving individuals who are unable to acknowledge and accept their accomplishments and, as a result, they have a persistent fear of being exposed as a fraud’.

So maybe bullshitting has its appeal after all…

What makes a great business plan?

There’s no right and wrong way to write a business plan. It’s about getting the job done – which is probably to make the best case to readers (investors, collaborators, potential customers) to persuade them to support you and your business idea.

Below are 10 questions that most business plans should aim to answer…

  1. Why are you the right person to be setting up in business? What’s your personal and professional situation – relevant life experience/ relevant training and work experience. What are your interests outside of work but relevant to your business success? 
  1. Why is this business particularly attractive to you? What’s the source of your passion – personal and professional? Why you will put in the extra effort and time to succeed when the going gets tough?
  1. Who will buy your products or services? Define your target market/s in a meaningful way (their demographics, attitudes, behaviours)
  1. Why will people want to buy your products/services? What ‘needs’ do your product/ service meet? And what ‘wants’ will you satisfy such that people will buy from you rather than your competitors?  
  1. How do you know that there is demand for your products and services? Explain your market research – show real, meaningful evidence of there being enough people willing to pay for your product/service. The views of your friends and family don’t count! The best market research is test-trading
  1. How will your business plan show the figures add up (with more income than expenditure)? This is your best estimate to show there are enough people willing to spend enough money to allow you to pay your bills (use your market research and cost/sales estimates to make the case ) 
  1. What is ‘plan B’ if things don’t turn out as planned? Will you … Scale down? Slow down? Do something slightly different? Do something completely different?  
  1. How do you know the overall business idea is realistic? Can you point to others doing the same thing successfully? How self-aware are you about your strengths and ways to compensate for your weaknesses? 
  1. How will you monitor the performance of your business? How will you know how well you’re doing? This is about more than just money – the ‘bottom line’. Will you set targets and milestones, identify relevant measures – outputs and outcomes – over the short/medium/long term.
  1. What will success look like? Imagine yourself in 12 months – what will a typical day / week look like? What‘s your vision for the period covered by your business plan?

 General advice:

  • Show development stages in your business plan. Targets for month 3, month 6, and month 12 perhaps
  • Make your plan sound certain (be positive but realistic and honest) even if some elements are not very fixed
  • Keep it simple – write for a 12 year old with no knowledge of you/ your business Quality is more important than quantity
  • Know where your figures come from (and explain the main assumptions in your plan)
  • Add other materials, such as photos, at the end if it helps the reader get a better grasp of you and your business idea.

Further reading:  https://enterpriseessentials.wordpress.com/2017/04/28/the-business-plan-paradox/

Get real

Reviewing Create Special – a new book on entrepreneurship

Writing a book for would-be entrepreneurs is not easy if you care about the people with the business ideas more than your reputation as a writer.

It’s easy to write a book along the lines of ‘if you care enough and want it enough you’ll get there’ and bookshop shelves show that many do – no doubt reflecting the famous-for-15-minutes-talent-show-con that pervades our TVs (ably assisted by series like The Apprentice)

It’s harder to write a book about the reality of starting a business – with all the pain that can inflict – because you risk putting off the very readers you hope will be inspired by your writing to rise above the barriers, reach for the stars, and be the best they can be (see, I’m getting carried away with that sort of bullshit myself).

Yes – passion and self-belief are important ingredients in any business start-up (why else would you put in the necessary slog to give your enterprise the best chance of success?) but it’s certainly not enough.

I come to be writing this review of Create Special by Jim Duffy though my day-job helping young people explore the world of enterprise and to start their own businesses if that’s the route they chose to take. I should declare an interest here – author Jim Duffy founded Entrepreneurial Spark – a network of business start-up incubators powered by [as they say] NatWest Bank around the UK, and I’m pleased and grateful to have access to one of those incubators, in Milton Keynes, for working with some of the young people who may become business owners of the future.

Ultimately, I feel it’s a disservice to anyone with a business idea to pretend that everyone can be successful if they try hard enough. There are able and less able people out there, and there are certainly good and bad business ideas. Even the best people with the best ideas can fail for very good reasons. For young people who lead complicated lives and have more obstacles than most to achieving business success, it’s dangerous to set them up to fail. Equally it’s also unhelpful to dismiss their abilities, as many authority figures have probably done already in their short lives.

So, in reviewing Create Special, I have a particular interest in assessing how well Jim Duffy has walked that tightrope – to balance inspiration and information – and whether this is a book for young people whom the system has failed and sent to the back of the queue.

I’ve already mentioned business bullshit and I think Jim Duffy scores pretty well on that (by which I mean low). As a lifelong bull-fighter against lazy language, I have my ‘red rag words’ – like ‘engage’ and ‘deliver’ which are meaningless without more detail (that then makes them redundant). Another, newer ‘d’ word I dislike is ‘disruptive’ – I think it’s often used to make something (or someone) sound more interesting than it/he/she is – like ‘new’ and ‘exciting’.

Jim Duffy gets as far as page 9 before using ‘disrupt’. I know lots of disruptive young people but you wouldn’t want them behaving like that in your business incubator! Yes – I’m the first to admit I’m a grumpy old pedant when it comes to language and communication.

Another bugbear of mine is the image surrounding entrepreneurs (particularly social entrepreneurs – about whom I’ve written in earlier blogs).  Awards, and not a few TV programmes with self-promoting, young (and often male) presenters are designed to give entrepreneurship (not quite the oldest profession… but one of them) an edgy and, dare I say it, ‘disruptive’ feel. While this is great for attracting young and young-at-heart entrepreneurs to give it a go, we need to guard against raising those false expectations.

While I think Jim Duffy comes close to presenting entrepreneurs as somehow super-human, he redeems himself by suggesting that creativity can be nurtured as well as being bestowed by nature and Channel 4. Also, that once developed, creative skills can be a real asset for navigating life in general as well as the world of business start-ups. I always say that a failed business start-up and the problem-solving skills it develops, can be a great springboard for later life.

In the world of entrepreneurship, case studies abound with the true tales of people who have overcome all sorts of physical and mental disadvantages to achieve business success (often defined as being wealthy beyond belief). And I’m not knocking them; such stories of success in the face of adversity make good copy and give hope to us all.

But whether you measure achievement in £-s-d or in some other way, I suspect that most successful businesses start from positions of relative privilege –  in university settings, in families where business is in the blood, in households where friends and family support – with contacts if not cash – in the early years.

A generalisation perhaps, but when working with young people who have an overlay of disadvantages such that turning up to a business advice session at an agreed time is itself an achievement, that starting point is important. In a section on focus, Jim Duffy suggests readers  could ‘lock yourself away in a remote cottage’ as one way to avoid distractions. Since even having a quiet space at home in which to write a business plan is on a wish-list for some of the young people I know, I’m delighted that Duffy also suggests you can shut the door to your study [or bedroom, or kitchen?] He also makes the case for having a notebook (and not necessarily one of the Mac variety…)  in which to write the right kind of #GoDo to-do lists; high-tech is not always best.

They say that parents should give their children ‘roots to grow and wings to fly’ and I think that in Create Special Jim Duffy just about gets the right balance between information for growing and inspiration for flying.  I regret that I came to entrepreneurship, and the creativity and problem-solving skills that places like Jim Duffy and NatWest’s Entrepreneurial Spark can unlock, relatively late in life. But it’s never too late to start – go create!

If you order a copy of Create Special online from Hive, you also support high street bookshops… http://www.hive.co.uk/Product/Jim-Duffy/Create-Special–Think-and-Act-Like-an-Entrepreneur-to-Change-Your-Life/20820428

On social entrepreneurs  https://enterpriseessentials.wordpress.com/2013/12/21/slowing-the-spin-about-social-entrepreneurs

The business plan paradox

“If you don’t have a plan, you can’t change it”

In my work with young entrepreneurs, we set great store by them developing a business plan for each would-be enterprise. I describe it as the key that unlocks further support – including a start-up loan and a business mentor. And it can. That’s the carrot for young people hoping to start their own businesses and the stick is… well… it’s me giving them feedback on their various drafts at 1-2-1 meetings. It has to be  their business plan and after each encounter, I  hope they won’t give up; no one is going to force them to stay the course. Of course, many end up ‘doing their own thing’ and we lose touch.

But then I have mixed feelings about business plans. They are, at best, an informed estimate about how things might turn out. We know they’re out of date the minute the ink dries on the page and they can be knocked sideways, backwards, and forwards by unforeseen opportunities and obstacles in the weeks following. Business plans chart 12 months ahead in a linear, orderly fashion (with words and figures hopefully describing parallel journeys) but we know that real life – personal and professional twists and turns – mean that’s unlikely to happen. We say that the business plan should be a ‘living document’ – dynamic and being constantly updated – but I wonder how many really are…

Then there’s my guilty secret – in the three years I spent setting up The Repair Shed (a social enterprise in Hemel Hempstead) my business plan lay unopened,  unloved, and out-of-date on the shelf. In fairness, I did have a 12-month project plan for the funders and I spent a lot of time explaining why things didn’t turn out quite like I said they would.

And yet… and yet …

Young people starting a business plan, and progressing it from one draft to another, shows learning in action, and achievement – massive achievement is some cases – that is credit-worthy in itself. Transferring ideas from inside heads on to paper helps make thinking tangible and, can often clarify issues and gaps in knowledge. A written business plan can share understanding between strangers about the young entrepreneur and their new venture. Even if the business plan is abandoned, it can be retrieved at a later date – a lifeline if the business is floundering, a leg up if the business was never started. And there’s proof that the author of a well-worked business plan can become much more employable as a result of that planning exercise alone.

There’s a much-quoted saying “no business plan survives first contact with customers” but I’d be happy with that – it says our young entrepreneurs have actually started trading!

Coming soon – 10 questions your business plan should answer  

Risky business

They say that entrepreneurs are risk-takers and it’s fair to say that, like most things in life, it takes an element of personal and/or professional risk to make things happen. This is not to say you can only succeed in business by being reckless, but being willing to get outside your comfort zone is pretty much essential. So, what are the main risks for the entrepreneur starting a new business? Here are six ‘Cs’ to consider:

Can’t do – Much of the talk these days is about a ‘can-do’ attitude – as if positive thinking is enough to make things happen! In reality, self-awareness about what you can’t do is probably more important – so that you can work out how to overcome your shortcomings eg filling skills gaps by training or co-opting someone else.

Competition – With a new business one of the first considerations should be the competition (direct = others doing something similar, indirect = everything that’s going to stop your would-be customers buying your product or service). If there’s no competition, you might ask yourself why not, if there’s loads of competition you need to know why people should choose you. A serious assessment of the competition can reduce the risk of failure – try to learn from other people’s mistakes. That said, I’m a firm believer that you can gain more from cooperation/collaboration than competition.

Cash (flow) – The single biggest reason that businesses fail is running out of cash. There may be lots of money tied up in the business but none available in a liquid form – cash – to cover immediate costs such as salaries and daily expenses. Not for nothing do people like me repeat the quote Turnover is vanity, profit is sanity, but cash is reality.” Keeping a close eye on the money coming in and going out of your business bank account – your cashflow – will reduce the nasty surprises.

Capacity – So your start-up is doing well and you want/ need to grow; the biggest limiting factors at this stage are time and space. You only have so many hours in the day and, if your business involves face-to-face customer services, you’ll need to be looking for people to bring in to help out (in effect, to increase the hours in the day). You may also need more space to accommodate the extra people knocking at your door. If you’re selling products, you’ll likely need extra space for production, storing stock and materials, and maybe for increased packing and distribution.

Contingency – They say that the best business people are not so bright that they keep asking ‘what if?’ all the time. But, it would be bright to do at least some contingency planning around you and your business along the lines of … What if I’m off sick for 4 weeks?  What if my mobile phone or laptop was stolen? What if a massive order comes in next week?

Coordination – Business seems so easy when you see it in terms of ‘selling the right products/services to the right people at the right price’ (whatever we mean by ‘right’). But the problems arise because real life rarely provides an easy route from A to B. Coordination – having a realistic map of your route to a clearly defined destination, and systems for coping if/when things go wrong (breakdown recovery etc), will help make the ride less bumpy.

Ultimately, the best entrepreneurs manage risk rather than letting it stifle progress – they take risks when they can afford to fail. David Robinson, former Chief Officer of Community Links in East London, makes the case for risk-taking. “If we don’t fail it means we’re not taking risks. If we’re not taking risks it means we’re not trying to do things differently, and if we’re not trying to do things differently, why are we here?”

The power of networking

Many years ago I went to a talk in Cambridge by Hilton Catt, co-author of The Power of Networking. I don’t know whether the publicity was ambiguous or what but, it being Cambridge, there was a digital divide within the audience – one half thought it would be about virtual networks, the other half thought it would be about ‘real’ human networks.

I’m pleased to say it was about the power of the face-to-face – in Hilton Catt’s case, for job-hunting. I was unemployed at the time and, while the evening didn’t result in my immediate employment, it reinforced what I’d been told by other jobhunters and confirmed my belief in the benefit of seeking and nurturing contacts for both professional and personal progression.

To this day, I still think you can’t beat close encounters of the personal kind – even in our tech-rich, time-poor working lives – and more so in an age of faux online friends, false news, and reality TV shows that suggest that, in business, someone has to lose for you to win.

Call me old-fashioned, but my experience of working with small business start-ups for more than a decade is that they have far more to gain by sharing their ideas (rather than protecting them) and seeking partners for mutually beneficial relationships. I’m not starry-eyed about collaboration and co-operation (as opposed to competition) but I recommend it daily, and will do so until someone convinces me there’s a better way.

In my day-job I support young people in their efforts to turn business ideas into viable and hopefully sustainable enterprises. Entrepreneurship can be a lonely road to take, so I encourage then to seek out like-minded people – even the competition – for advice about mistakes made, lessons learnt, and what works well.

The young entrepreneurs are constantly astonished and delighted by the helpfulness of others (people who remember when they were starting out maybe) with no expectation of a payback. I also pull in my own personal and professional contacts when I can. In the last six months, I’ve fixed a fence erector up with a van, I’ve arranged a would-be photographer’s night at a music awards ceremony in London as professional snapper’s assistant, I’ve unearthed (pun intended) a garden designer to pass judgement on a newbie designer’s work, and I’ve steered others towards potential collaborators, including business networks.

The day that ‘who you know’ becomes less important than ‘what you know’ and online communications make face-to-face connections unnecessary, I think I’ll pack up and head for the hills (preferably somewhere there’s no broadband).

Small card, big message

In my day job I work with young would-be entrepreneurs to support them in setting up in business if they have an idea they want to pursue. As most people know, writing a business plan is a good place to start – to get the ideas out of heads and on to paper where it can be developed, adapted and, if need be, rejected.

When it gets to the publicity section I’m always intrigued that, in an age of social media and worldwide online communication, when asked how they plan to promote their business, nearly every young person writes ‘business cards’. How do they even know about business cards?!

I think the attachment to this humble handout is a combination of it being tangible (unlike things like ‘brand’ ‘values’ ‘and ‘social media’). It’s also cheap – most people know companies that will hook you in with an offer of your first 50 business cards free. Then there’s the comfort of conforming – ‘me too’ – everybody talks about business cards and seems to have then, so why don’t I?

This is not to knock the potential value of professionally produced business cards but, as money is always short, I tend to design and print my own (certainly when I’m paying for them) because I use so few. But then maybe, after 35 years in marketing, I’m missing a trick…?

A business card can, and should, say a lot about you and your business – your quality, character, professionalism, and quirkiness if that’s the business you’re in. Above all, it should be the ‘calling card’ that convinces your target customers that it’s worth making that phone call.

I’m someone with an interest in clear and concise communication in all its forms, so I find the business card an interesting challenge. Like most publicity pieces, it can be both ephemeral – one of many gathered at an event soon to be ‘filed and forgotten’, or essential for safe storage (in my case in a pile on my desk) for easy retrieval when the time is right. Surprisingly often I reach for one I know is in there somewhere, but the beauty of the business card for me is in the use of the limited space (in seconds and centimetres) for grabbing attention.

I’m a sucker for gimmicks so I’m usually more attracted to the design than the content. I’ve been working with a young person who plans to offer soft and hard garden landscaping services. We’re currently trying to produce a business card that grows using paper embedded with seeds. We’ve got the paper from my friends at the Frogmore Paper Mill.  Now it’s a matter of working out how to create the cards so they sprout and grow when watered carefully on an office desk – watch this space…

 

Last week in Bristol I was attracted to a slightly-larger-than-standard business card from a local company – Florentina & Chalky. What you can’t tell from the photo is that the card has a unique feel – like chalkboard – so they go one better than the company that ‘does what it says on the tin’!

What next – a scratch and sniff business card for a cheese shop?

http://florentinaandchalky.blogspot.co.uk 

http://www.thepapertrail.org.uk

PS – a re-use tip: If you’ve gathered a pile of business cards with blank backs and you don’t want them, you can use then as a deck of cue cards for your next talk – a handy-sized pack of prompts.