After having started seven businesses over the last 10 years and as an Enterprise Ambassador for The Prince’s Trust youth charity, I have been fortunate to view startup businesses and entrepreneurs in a variety of contexts. Below are five lessons about starting up I have learned along the way.
Complete the ‘hard yard’, first.
It doesn’t matter how great an entrepreneur you are or will be. If you have a big pot of money up front, you’ll likely waste it. I know I wasted some of what I managed to pull together when I started my first business (printing too many copies, having an unfocused marketing plan, etc.), and if I had more I would have wasted more.
Instead, you need to complete the “hard yard” first. Get out there and test the concept with customers. Nothing ever works out as planned and there will be unexpected problems. Find them before you waste money on them. Once you’ve proven the concept and have a better understanding of how the business will work, then it’s time to raise capital.
Think big and plan backwards.
Ideas should be hugely ambitious from the beginning. Only after having proposed it should you then work your way backwards to determine whether or not it is feasible. I am only interested in ideas that sound a little crazy. That’s the time to get involved and create an achievable plan.
For example, we wanted to launch a scheme to get independent publishers and bookshops to work together across the country. To execute, we started off in London with ten bookshops and a select group of publishers. The scheme, called Exclusively Independent, grew into the UK’s largest project bringing independent companies together. While it might have seemed far-fetched from the beginning, we were able to break it down into feasible steps and go from there.
Implement the ‘double and half’ rule.
When you lock down your first projections, it is fair to assume that revenue will be half and the costs will be double. In my first projection, I proposed making a small profit. I saw myself owning an island by year three, as I increased production. Though these projections were completely unrealistic, they were the start of the learning process about forecasting. Keep working on your projections. When they stand up to your revenue and costs models, you’ll be that much closer to a sustainable plan.
Don’t mistake action with progress.
You have to throw everything in when you start a business. That energy is what will sustain you during the initial years. Yet, it is worth stopping to evaluate what you are achieving and whether it will provide a return on your time.
The moment I feel like I have been doing any task for a while, I make myself stop and consider whether it is the best use of my time. Time management and prioritization will become an increasingly vital skill as your business grows.
Stop the bad and scale the good.
Stopping when something isn’t working is a harder skill to learn than it sounds. I have always found it difficult to accept when an idea turns out not to work in practice.
As an entrepreneur, you have an innate drive not to give up and to turn a situation around. But learning to be honest with yourself and knowing the right time to stop is key. Conversely, you need to move fast as a small business. When something is working well, focus on how you can scale it quickly into something much bigger. If you’re given a window of opportunity, take advantage of it.
Always understand what you are getting into, and why, as well as what is required to be successful. Using these as starting points, a founder can wisely grow his or her business while learning valuable lessons along the way.
This article has been edited and condensed.
Tom Chalmers is the founder and Managing Director of seven publishing and publishing related companies (including IPR License). He set up the first in 2005 at age 25. He has been shortlisted for UK Young Entrepreneur of the Year, UK Young Publisher of the Year and UK Young Publishing Entrepreneur of the Year, and longlisted for the Enterprising Young Brit Awards. He also speaks regularly on publishing and business. Connect with @tom_chalmers on Twitter.
© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.