Here are some facts.
• One in 11 people in Britain is running or starting a business.
• Of 18-64 year olds, 8.6% are involved in start-ups, compared with 7.3% in 2013, according to research by Barclays and the Business Growth Fund (BGF).
• Active companies in the UK rose 3.9% in the six months to June 2014 to 3.14 million in December 2014, according to Barclays and the BGF’s biennial Entrepreneurs Index.
Still feeling good – let us continue. It has never been easier or cheaper to launch a company in the hothouse of ambition, money and software that stretches from here to Australia. But the way start-ups are portrayed, everything seems to be an overnight success but sadly the reality is somewhat different. Most start-ups fail! However many entrepreneurs still overestimate the chances of success – and the cost of failure. With estimates of start-up failure as high as 90% you just do not want the death throes of your new sparkly thing to go on and on interminably. If it’s going to die let death be swift, unremitting but mercifully quick – and we can all get on with building the next bigger, faster mousetrap. And here is my two-pennarth of advice – if you have tried as hard as you can, if you have strived until the tank is empty, if you have cashed in the remains of your pension to keep it going a bit longer, if you can meet with Triumph and Disaster and treat those two impostors just the same (sorry Rudyard) – nobody can ask any more of you. Just put it down and go and lie down in a darkened room for a bit and come back fighting. No one will think any the worst of – perhaps not all of your investors but at least some.
The main thing when you do get back on that horse is to learn the lessons of why and how you failed in the first place and obviously not repeat your mistakes of your first sisyphean effort and what are you going to do to mitigate risk next time. Here is my checklist of dos
1. Start your business for the right reasons. If you want want more time and money I can promise you it will not happen overnight. However if you have energy, drive, focus and the mental toughness required for the fight these are good reasons why you may succeed.
2. Get your self a good management team – people that have been there and done it will increase your chances of success no end and good management is always appreciated by investors. Try to be a good leader and don’t ask anyone to do anything you cannot. Only a wimp asks the intern to cold call when he/she is terrified of picking up the phone
3. Make sure you have enough cash. Do not underestimate how hard or long this process is. The best thing to do is never stop raising cash in the first place because once you stop you will only have to start again and then it will be twice as hard. You need to spend enough time on a detailed cash flow to convince everybody that you are going to make it. Nobody minds subsequent rounds of investment but only if it is planned. Just make sure that you don’t underestimate
4. Make sure your innovation is future proofed – don’t bring out a time machine if time travel is going to be out-lawed. Or do as I did and bring out a wizzy smart phone application just before Apple releases the iPhone.
5. Make a plan for everything – not just a business plan but all the operational ones as well. If you don’t have a plan you will fail.
6. Keep your emotions in check and don’t try to be Google overnight. A poorly executed merger or acquisition could be disastrous and will suck all the cash and energy out of the business. Slow and steady wins the race
7. Keep Current – stay on top of the trends. A non-existent digital marketing strategy or 15-year-old web site is a no-no and you will be judged by your lack of forethought
8. Don’t give up because it’s too hard – no one loves a quitter not even their mother.