Tag Archives: collaboration

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).

An A – Z of social entrepreneurship: A – D

As a contribution to Global Entrepreneurship Week (17 – 23 November) Chris Lee blogs his personal and highly selective reflections on what increases the effectiveness of social entrepreneurship to mobilise resources of all kinds for positive change and social impact in and beyond local communities.

A – Accountability

Even when you’re spending your own money you’re not truly free to behave as you might wish. You have a responsibility to guard against your actions having a negative impact and to be aware that a poorly executed plan may harm the credibility of those who follow you. When you’re working with vulnerable people, as clients or employees, their welfare should also be your concern.

 B – Balance

Rarely are there right and wrong ways of doings things, even when applying a proven model in a new situation. For all the online advice and training manuals, social entrepreneurship is about testing new and different ways to bring positive change in society and seeing ever obstacle as a new opportunity. Ultimately the ‘right way’ is likely to be a compromise – balancing conflicting needs and interests.

 C – Collaboration

It’s too easy to stereotype entrepreneurship as being competitive (and aggressive if you believe ‘The Apprentice’…) and social entrepreneurship as being about collaboration. In reality, entrepreneurs of all varieties know the value of networking and building mutually-beneficial alliances with others. Indeed, with growing need and shrinking resources, partnership may be the only answer in some cases!

 D – Decision-making and democracy

When asked, four years on, why he’d not consulted the community when setting up a (very successful) social enterprise, the entrepreneur replied “They’d still be trying to decide what to call it if I had.”  

Consultation and involvement are our watchwords, but they can make decision-making more cumbersome. Business decision-making tends to be more streamlined. But, ultimately, which brings better decisions?

Enterprise essential – collaborate to compete

In the social economy, successful collaboration is as likely to sustain your enterprise in difficult times as is successful competition. Partnerships and consortia are a growing trend for bidding or contracts. But don’t over-estimate the potential savings from scaling-up your enterprise – particularly when you are selling services rather than products.

 

Learning about Earning: lessons 7 and 8 from a social enterprise start-up

Top down vs bottom up

I have a problem with reconciling the character of many entrepreneurs (energetic, impatient and confident, even to the point of arrogance) with the idea of a social enterprise as a cooperative and collaborative enterprise. To my mind, users should be involved, as far as possible, in the design of the business (co-production) but this, of course, takes time and patience.

But I also accept that the entrepreneur is the one with the vision to mobilise resources and take the idea to a stage where (hopefully) others can take over – leading from behind. This frees up the entrepreneur to move on with a new idea (or new location if replication is the name of the game). Starters are not always good finishers…

Further related reading: 20 social enterprise leadership tips http://bit.ly/1rpFhQD Do you have the character of a social entrepreneur? http://bit.ly/ZdJ1hH Can you take people with you/ sell the vision? http://bit.ly/1BkU9qJ Are you accountable to others – even when you’re spending your own money? http://bit.ly/1nAA8Yx

 Cash in hand vs gifts in kind

“In year 1 you pay the business, in year 2 the business pays itself, in year 3 the business pays you”

 Whatever kind of business you’re starting (unless you’ve got a ready-made cohort of paying customers from day one) you’re likely to need a couple of year’s support before the business takes off. The social enterprise model is not an easy route to go down so you may need longer.

Traditionally, start-up support comes from ‘family, friends and fools’ and in the social enterprise sector there’s a growing supply of social investment (although there currently seems to be a mismatch between supply and demand). But alongside the need for some cash (you can’t run a business entirely on fresh air and goodwill) there’s a generous supply of free, non-cash support.

Alongside what’s available online…

  • Social Enterprise Start-up support – School for Social Entrepreneurs in Ipswich, Wenta Business Incubation in Herts and Beds (free for first three months), Social Incubator East in Cambridge, Inspire 2 Enterprise, and UnLtd.
  • Partners that are willing to help if there’s minimal direct cost to the organisation (Community Action Dacorum and Sunnyside Rural Trust in the case of The Repair Shed)
  • Company sponsorship – Triton Tools as official supplier of tools to the UK Men’s Sheds Association. More on The Repair Shed funding mix at http://bit.ly/1wdmgp3

If you’re interested in exploring ways to turn ideas into action, join Chris Lee for a day-long workshop on December 4 in Chelmsford Details at www.voluntarysectortraining.org.uk/courses/event/70/Ideas-Into-Action