Of all the statistics I read in business, one that makes my heart sink the most is the fact that, on average, almost 20 per cent fail in the first year.
That’s one in five: and equates to tens of thousands across the UK.
These businesses won’t necessarily be bad businesses. They could have amazing staff. They might well be selling a product or a service people love. They could be generating high levels of revenue. But they will be doing something which is fundamentally wrong and which is setting themselves up for failure.
By the way, failure shouldn’t always be seen as a negative. As some of the most successful entrepreneurs have shown, failure can happen and often, the lessons learned from a failed business will help pave the way to success in the future.
However, with the current economic climate anyone setting up in business will pay a high price if a new business fails quickly after launch.
Over the past 20 years I’ve specialised in working with other Entrepreneurs from Start up, through scale up to large Cap Private Equity and IPO’s.
And as a fellow of the City of London Company of Entrepreneurs and a Freeman of the City of London I’ve seen, first hand the challenges which exist for anyone trying to launch a new enterprise in the City.
With this in mind, here are some things I’d advise anyone thinking of setting up in the City of London to consider.
Make sure that your business offering is innovative, unique and stands out. Ensure that your USP’s are genuinely “Unique” and that it is in an area that would materially benefit from your inclusion.”
Most businesses go business because they run out of cash NOT because they are not good, profitable businesses. Therefore, you need to ensure that you have a clear “runway” ahead of you that will serve the foreseeable future, not just tomorrow.
You can’t do everything yourself, so work out what you are best out and find others with more skill / experience than you to do the other elements.
Don’t be the best kept secret. You need to understand who your target audience(s) are and then create a clear plan to reach and influence them. Remember, it will take a number of engagements before they will understand and consider utilising your offering.
It takes trust to commit to a purchase and trust has to be earned. If you are new or innovative, then it will take even more for them to understand it, as it is not something they would have bought used before.
Keep it focused and simple
Your audience will probably give you five seconds of their attention at any one time, so ensure that you are clear and easy to understand. It has taken years of blood, sweat and tears to launch an overnight success. So don’t expect an easy, overnight success – you have to be dedicated and focused in your efforts to build anything from scratch.
Data and insights
Businesses are built around people, and people are often illogical. Don’t ignore data and insights but be aware that you can drown yourself in them. If they affirm what you’re doing or vice versa that’s great to know, but in business it’s good to use gut instinct and get behind an idea which you genuinely believe in.
Focus on what you can do well personally and find experts in each area to handle everything else. You can only do so much, and you can’t be the best at everything. Whether you outsource or hire people for internal roles, you need a strong team around you that is ready to handle any area of work needed for your business.
Entrepreneur and growth specialist Matthew Hayes is the MD of Champions UK plc