Xanthe Vaughan Williams, director, Fourth Day PR
Many of us working in the middle layers of large organisations dream about the day when we will break free and set up on our own.
The entrepreneurial dream has been nurtured by tales of internet startups that turned into Facebook and Google, and it has been drawn into the public eye by TV shows such as Dragons Den and The Apprentice.
The reality is less glamorous. According to Forbes, nine out of ten startups will end in failure and many entrepreneurs finally find success only after a series of collapsed businesses or even bankruptcy – just look at Donald Trump.
But don’t let that put you off! Running your own business is hard, but it’s also hugely rewarding. It gives you the scope to explore your ideas, choose who you work with and to truly take responsibility for your own career. Just make sure that a few things are right first.
What type of business are you going to build?
Are you going solo or entering into business with a partner? Deciding the rough shape of your new organisation is a good place to start so give it a lot of thought. A limited company may be the right option if your shareholders are unlikely to change significantly, but a partnership or even sole trader status may work better if you are setting up as a group of individual fee earners. The government provides a lot of useful advice on this subject on the www.gov.uk site.
How much are you prepared to risk?
Contrary to the hype, entrepreneurialism isn’t all about taking daring risks. Set yourself realistic income targets and keep your costs as low as possible when you start. If you know you have ridiculously high targets to hit, you’ll find winning business much harder! And don’t borrow money from friends and family without a rock solid business plan.
Do you need an office?
“Co-working” spaces are popping up in cities everywhere so you don’t need to spend a fortune to secure a desk in a working environment. For a monthly fee you can have access to a desk, Wi-Fi and some storage space. Many co-working organisations also provide networking events so you can meet other startups and/or potential clients. Just search on “co-working” in your area.
Do a pre-nup
If a group of you are setting up together, draw up an agreement about what will happen if one of you leaves. Who will own their share of the company? What if you can’t afford to buy them out? Even when break-ups happen on the best of terms, it’s far easier if you’ve agreed all the basics already.
Talk to your customers
Whether you are offering a completely new product or service, or whether you’re doing what you did before for an employer, you are offering something you believe to be special. What matters, however, is that your customers think it is special – so talk to them! Give them free trials, let them try samples and be ready to change if you’ve got it wrong.
Having said all this, don’t spend months agonising about the terms of your shareholders’ agreement and planning every detail of how you will re-invest your profits in two years’ time. Follow the points above and lay down some solid foundations, then get out there and do it!!
About the author
Xanthe Vaughan Williams is one of the directors at Fourth Day, an independent PR agency with offices in London, Manchester, Paris, Casablanca and Berlin