Starting out and scaling up

By Alison Cork MBE

Every business starts with an idea, but a great idea alone will not be enough to sustain you through the demands of starting out and scaling up.

Around 20% of businesses in the UK fail in their first year. That’s not because the idea behind them was flawed, or that the founder lacked passion, resilience or common sense. It’s because the business idea collides with fiscal reality: high living costs, energy bills, business rates, stubborn inflation, and access to start-up finance, which all prevent a business from launching, growing and surviving.

However, becoming your boss and realising your passion project is not an impossible task. In the US 4.7 million businesses are launched every year, with the pandemic inspiring more people to live the dream. From 2022-23, there were approximately 801,000 new UK businesses. That’s an increase of 6.4% from the previous year. To give yourself the best chance of success follow these steps.

Know the market

You must be a student of the markets. Ask yourself why is there a need for your product or service, Don’t just assume there is a gap in the market, know there is. Ask yourself: who exactly will buy your product, where, how, and why should they buy it from you? Don’t just assume you know your customer, but research their demographic, their spending choices and needs. Often customers will be more pragmatic than you think. In my experience, they may stroke pink sofas but buy beige ones. Keep it simple. Create a product or service that responds to the practical needs of the market, and maintain a laser focus on your customers, mindful of the fact their preferences may change over time. You need ongoing, real-time awareness of your market to stay in the game. Ask yourself: who are my customers? What do they want? Why? How can I respond to them? You cannot know your customers well enough.

Make a plan

The success of your business will depend on having a clear business plan. This plan must incorporate your market research, your financial position and your vision for how the business can expand. It must cover your objectives, strategies, sales, marketing and financial forecasts. Ask a mentor to interrogate the plan. A former boss or colleague can be really useful here. Encourage them to be critical. They may spot holes in your business proposition and give you great new ideas. Then draw a growth diagram and project it forward, even if you don’t always know how every idea will turn out it will help you to keep the bigger picture in mind. The most effective plans will clarify your business ideas, spot potential problems, set out your goals and measure your progress. A solid plan will also help to convince customers, suppliers potential employees and investors to support you.

Know your numbers inside and out

There’s no way around this one. If you didn’t like maths at school or don’t have ‘a head for figures’ then get comfortable with numbers. You must know how you can fund your business, and how to track your spending, your income, and your investments. This means being organised and having a clear picture of the business’s financial position at all times. You will be regularly tested with your grasp of the liquidity underpinning your business. This can happen in a pitch meeting, negotiating with a supplier, or when talking to an investor. Even a friendly chat over coffee with a business partner can have serious implications if they think you’re in a muddle about money. Thankfully there are excellent accountants and accountancy platforms out there to organise your finances and give you a clear, topline view of the business’s financial situation. It’s worth investing in these for the perspective and confidence to propel your business forward.

Be agile

It’s better to try something quickly and fail rather than waste time persisting with an idea which isn’t working. As important as it is to have a vision for your business, do be open to this idea changing. There is an element of trial and error when starting a business and that’s a good thing. Only through experience, through testing your idea in the market can you know the way ahead. The advantage of being a small business is that you can quickly adopt a new strategy if the old one isn’t working. You will make plenty of mistakes along the way, but mistakes can help you grow. Your first few businesses may fail, but through these failures, you can come back with better ideas to last the distance.

Pace yourself

Starting a business is a marathon, not a sprint. It will be mentally and physically demanding. The highs and lows come quickly. It’s important to remain even-minded during these moments. You can also find yourself working far too many hours. Do give yourself evenings and weekends off to recharge, just as you would with a normal 9-5 and understand building a business happens over time, not overnight. Making sure you look after your physical health and mental wellbeing is also vital if you want to perform well in business.

As an entrepreneur, your best tax-free asset is your imagination. So give yourself time and space to imagine and visualise for your business. You can do this at the gym, on a walk or even at the shops, and by allowing yourself to switch off from the business, you can come back stronger the next day with better ideas.

Confidence

Only one in four businesses in the UK is owned or led by a woman. Believing in yourself is an essential building block to success, however, a complex system of stereotypes, biases, cultural norms and social expectations can often be a barrier for women. As a result, not only do women suffer, but so does the economy at large.

Research from Sapio, published as part of National Women’s Enterprise Week, found that more than half of women (53%) lack confidence in setting up and running their women. While 51% of women stated they had the interest and desire to launch their own business, it was someone aside from themselves that gave them the self-belief that they could do it. As more women search for autonomy over their careers, mentorship programmes and community support networks are crucial in ensuring women feel prepared and empowered to make that leap. Women shouldn’t feel ashamed or embarrassed to seek out support throughout their business journey. There are many business networks which offer free business advice for both start-ups and scale-ups, such as the Business & IP Centre Network. By reaching out to other small business owners, women can connect with people who understand the challenges they’re facing and provide guidance on how to overcome them to flourish.

Women and their backers, many of them male, need to have confidence in the qualities that women can bring to businesses and leadership. Anita Roddick, Sophie Mirman, Debbie, Moore, Karen Millen and Charlotte Tilbury, just to name a few, have all shown the way. Get out there and start that business.

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