Starting a new business is a bold step. There are many risks and uncertainties but also great opportunities and rewards. If you are currently an employee of another company, then starting your own as an entrepreneur is a lifestyle change. Don’t make the mistake of assuming it is a way to get rich quick, or an escape from all problems. Starting a business is hard work, requires a lot of determination and learning, and only pays off in the long term. Take an honest look at yourself before leaping. If you are desperate to get out of an existing role, you may just be lurching into entrepreneurship, only to find it more stressful and unsatisfying. People who feel competent but unsatisfied or bored in their current job make better entrepreneurs than people who feel overworked, under-appreciated, and over-stressed. As a startup founder, remember that the buck always stops with you. There is no room for the blame game. Contributing factors aside, most startups fail because they just give up, not because they run out of money or time.
Having left the comfort of the big corporate life to start our own venture, we can definitely say it has been a rollercoaster of a journey, but we do not regret it a single day. In order to avoid some of the pitfalls and obstacles along this path, careful planning is necessary. Below are our Top Ten Tips for the new entrepreneur:
- Don’t be afraid to talk about your idea. If you keep your idea a secret and don’t consult with anyone, you will find it very difficult to progress your idea. Listening to various opinions will help in validating your idea as well as giving you further “food for thought”.
- Research the market. Make sure you thoroughly study and familiarise yourself with your target market, whether it is a new territory, a niche industry sector or a specific population segment. Conduct market surveys, use focus groups and read relevant literature.
- Know your competition. Familiarise yourself with both direct and indirect competitors in the marketplace. Understand the strengths of their products/services and their customer base to be able to identify your core competitive advantage and position yourself at the leading edge of the competition.
- Consult with professional service providers (lawyers, accountants, tax advisors etc). While their advice may be costly, it may often give you the best value for money, as well the ability to tap to their network of contacts and learn from their experience. It will also help you structure your business in the most effective way, thereby saving you greatly once your business matures.
- Prepare a business plan. Having prepared and read hundreds of business plans throughout our career, we can definitely say no business plan is like the other. While you are most likely to be asked for a business plan at one stage or another (by the bank, investors, regulator, or others), preparing a business plan is your opportunity to set out for yourself the objectives and goals for your business, as well as the process by which you will execute your plan and the financial forecast you expect to attain. Such business plan should be reviewed and updated as your business progress. Lacking a business plan is one of the main factors why some start-up fail, and seeking professional advice to write it is the best way to ensure you end up with a document that is fit for purpose.
- Don’t accept just any investor. Raising funds for your new business may be perhaps one of the biggest challenges you may face, but don’t be tempted to accept just anyone’s money. Funds from family and friends may be easier to raise but in case of a business failure may cost you your most precious relationships. By taking “stupid money” from unprofessional individuals, you may find yourself stuck with partners who have no added value to your business, yet have the power to control your business decisions.
- Protect your IP. If your business is based on some Intellectual Property, make sure you take the relevant actions to protect these intellectual assets as early as possible, such as applying for patents, registering trademarks and copyrights, and look after your key employees.
- Hire only the best. While employees are often the biggest business cost, they are also its biggest asset. No matter how good your product may be, people do business with people and it is this human interaction that will determine the success of your business. Hence, don’t compromise on the quality of your employees and don’t be afraid to let go of anyone who doesn’t measure up to your expectations.
- Try to obtain free money. There are various grants, sponsorships, interest-free loans, tax breaks and other aid funds earmarked for new businesses. Make sure you explore these opportunities and learn how to obtain them. It may often be easier than you think…
- Use social media to get exposure. In the internet era you don’t necessarily need to spend huge amounts on expensive advertising. Word of mouth and viral marketing over social media sites have become a powerful, yet cost effective way to potentially reach millions of customers.
Gibraltar is an ideal place for entrepreneurs and start-up businesses as it offers a business-friendly environment characterised by low bureaucratic obstacles, low taxation, various financial assistance programs, and numerous professional associations.
The biggest excuse why people do not start their own business is because of the fear of failure. So many people SAY they want to ‘take risks’ and ‘start a business’ for years but never act. Why? They’re afraid of failing. Which really means they’re afraid at what people will think of them for failing. The most successful people I know have the most failures. Because they take the most chances. It’s not IF you will fail. It’s WHEN and what you do about it. The faster you can accept this paradigm the faster you can get over excuses like these and onto FINALLY starting your own business.