Are you thinking of going self employed? If so then follow our tips for starting a business below. Courtesy of Victoria Atherstone, Founder & CEO of Love2scoot Ltd. She’s still developing her business but she has learned a lot in the process!
Here are her top tips for starting a business:
Tip One: Don’t run before you can walk
Sometimes it really does feel like I’ve been in the start-up phase for a lifetime. Well to be exact it’s been four exciting, stressful, skint, confidence gaining and many other describing word years. However better to start when you’re really ready rather than launch too soon and fail.
So my light bulb moment happened in China back in 2006 while I was on vacation visiting my father; I was amazed to see for the first time in my life electric (Vespa like) scooters zipping around everywhere. A quick Google search when I got back home confirmed that I hadn’t been walking around with my eyes closed. We really didn’t have any back here in Blighty.
I should also mention that on the plane journey out I watched Al Gore’s documentary: ‘An Inconvenient Truth’. I was sucked in! So there you have it, a consumer need and a product to service it. Happy days. That’s Tip One.
However even though I was completely sold on this idea unfortunately I wasn’t in a position to start straight away.
Tip Two: Ensure you have some savings to fund your start-up
Not many (if any) investors will put money where your mouth is, if you haven’t first.
I was very fortunate enough to be a property owner at the age of 26. That’s when the idea came to light. However I still had one year left on a three year mortgage tie-in. I knew that I had no experience in the electric scooter market. Nor did anyone else in the UK for that matter.
So I was going to have to carry out a lot of research. And put a big chunk of my time aside in order to achieve it. So one year later I sold my flat for a handsome profit. I then left my job in London and moved back home to the sticks.
I spent five months pretty much in isolation putting the nuts and bolts together that would form my business. To date I have invested over £20,000 of my own money that I can accrue for in receipts. I know that investors have taken me far more seriously because of that.
The good news is that when I do actually launch I’ll make a profit. You see this money will be paid back to me as a Directors Loan. In my eyes, coming off the property ladder wasn’t a risk. In fact, it enabled me to educate myself in a specific area and to follow my dream.
Tip Three: Carry out your research
All investors are going to want to see a business plan, detailed research that will support your idea. My biggest concern was the quality and cost of the product. Could I import this product and actually make a profit?
Would it be feasible to purchase and import the stock? Pay the duty and VAT, store and distribute weekly to a head office location? Not to mention pay for a retail unit, employ staff, market the business, find consumers. Then still have money left in the pot to make it a viable model. Well the answer to that was actually yes.
But how did I get there?
Tip Four: Don’t overestimate your financials – be REALISTIC
All investors / banks / grant applications will want to see your profit and loss forecast. Draw a line through the middle of an A4 page, then list all incomings, below the line all outgoings. Then work your financials out on a monthly basis and then over a three year period.
If your model is similar to mine your list of outgoings will be far longer than your incomings. Originally I was working with two products in the range. With extra income from ‘on the road’ costs and commission from insurance companies.
My outgoings consisted of items such as, value of stock and associated freight, marketing communications, telephone calls, staff salaries, stationery and post, heating & electricity, solicitor and accountancy fees, corporate branding and photography, travel and accommodation, corporation tax and on and on.
Once you’re happy with your P&L make sure you can really deliver on your sales. Don’t be too hard on yourself, as its far better to over achieve then under achieve.
A good exercise is to turn your P&L forecast into three different scenarios; low sales, mid sales and fast growth sales. Be realistic with each one. Then you can ascertain that if it all goes Pete Tong (low sales scenario) will you go under?
Tip Five: Mentors rock – make sure you have one
Now if you’re really savvy you’ll attend lots of free business events. Introduce yourself to many high calibre speakers and secure yourself a celebrity mentor. Just because someone might run their own business it doesn’t mean they’ll be a good mentor.
It’s also a good idea to secure a handful of different mentors – I was lucky enough to introduce myself to former BBC2 Dragon Doug Richard at one of his School for Startups events in Edinburgh. I didn’t ask him for money, I just explained my business model in a sentence and asked for advice. You see I didn’t appear needy or desperate. And because he liked my idea I was lucky enough to secure a first meeting.
But remember to be resilient; it took about five emails and numerous phone calls before I actually got that first meeting in the diary. I also wanted advice from a women being a female entrepreneur so after attending various start-up networking drinks and dinners.
I was fortunate enough to be introduced to a young successful business lady called Susanna Simpson, Founder of Limelight PR. It was great to get advice from Susanna on more personal matters. Mentors will keep you strong when the going gets tough and remember they have all been there once before too.
Closing statement – don’t lose faith!
If you’re passionate about your business idea. If the idea has real legs. And you have the tenacity and will to make it happen, then keep it up!
We hope you found Victoria’s tips for starting a business helpful. To learn more about funding a new business read our article here.