Starting a Business?
5 Top Tips from Our Interviewees
In the two months since Founder Facts launched, we have shared interviews from over forty founders. They exist in a range of industries from food & drink to artificial intelligence. In this article, we share the tips and advice that have been mentioned most frequently by our founders.
- Focus on cash flow when starting up. Cash flow is the life-blood of a small business. Look at the balance sheet of any business. You will soon realise that cash flow is a dynamic and often unpredictable part of business life. Start-ups and small businesses are especially vulnerable to cash flow problems at the beginning. However, it is not always wise to make securing investment your first goal. If possible, draw in support from friends and family and work hard to ensure the brand grows organically.
Tomas Mesa and David Ventura, Co-Founders of Mister Free’d said:
“To allow us the chance to have an impact on the market, we raised some money with friends and family. Then, in 2017, we secured funding from an angel investment round. Funding is never easy, especially when in the early stages and we faced many challenges initially. We used those funds to push the product rather than our brand because we had little time to market it ourselves and didn’t have the budget to hire marketing and PR agencies.”
Equally, you want to leave yourself enough money to spend on branding. Zoe Harrison, Founder of Butterbelle said:
“If I were starting out today, the only thing I would do differently is spend more time and money on my branding”.
Beyond a memorable logo, good branding represents trust and authenticity. It tells the story of the brand, allowing customers to connect with what they are purchasing. Fundamentally, a lack of funds should not deter you from starting a business. It is certainly possible to start a business with no money. However, a small monetary investment and time spent on building a good brand will give you a head start.
- Recognise the upside of competition. At its simplest, competition in business is when two or more companies compete for the same thing. Similar to two colleagues competing for a promotion within the same company. If you open a business, you are most likely going to have competition. As Amy Moring, co-founder of Hunter & Gather states:
“Competition can be a challenge, but there are not many ideas that are new. You just need to find something and put your spin on it.”
It’s very important to understand the market you operate in and your competition. Don’t be deterred from starting a business because the idea already exists. The fact there is an existing market means that the demand for your service/product already exists. In effect, competition means that much of the market research you will undertake already exists too. If you offer something different and avoid the ‘but it’s all been done before’ rhetoric, competition won’t matter.
The key takeaway here is one of balance. Pay attention to businesses in your industry, but do not make focusing on them your priority.
- Don’t fear stepping into the unknown. Humans are programmed to be wary of change. When we face a change, our brains automatically calculate the risk/reward involved in order to determine whether something is worth doing or not. This is no different in business. The unknown will certainly lead to change – it might lead to success, but could just as easily lead to failure. When Founder Facts interviewed Jessy Kauldhar, Founder of L’atelier Kauldhar, a luxury design studio incorporating holistic therapies, Jessy referenced a great Greek Mythological saying “The Phoenix rises from the ashes.”
If you are not sure whether starting a business is the right thing to do or whether you can pursue entrepreneurship full time, step into the unknown, if the first attempt fails, get perspective and learn what not to do next time – it is only when we embrace the unknown that you can really develop as an entrepreneur.
- Keep your existing customers happy: Great customer service should never be underestimated – as we often hear, a satisfied customer is the best business strategy of all. Whatever experience a customer has with your business, they will be sure to spread the word.
The difference between companies that grow quickly and those that don’t is customer retention. Demba Lehrer, founder of the Dutch Online Farmer’s Market, Farmed Today said:
“If your existing customers are not happy, then it is hard to attract new ones because it will make it harder to scale your business efficiently. Worry about your existing customers first.”
In a nutshell, prioritise customer service. The investment in generating new customers far exceeds investment in retention. This leads us to the fifth and final tip.
- Utilise the power of word-of-mouth marketing: Changing consumer behaviours and trends, and the vast array of advertising methods means your business can now end up anywhere: Facebook, the top page of Google, the first 10 seconds of a YouTube Video and the list goes on. Digital marketing can certainly be a minefield for those starting out. Weighing out the options offered on social media platforms, using Google ads or knowing where to spend that initial £50 can be overwhelming.
In lots of our interviews, founders have said that word-of-mouth marketing has been the most effective approach. Caitlin Halbersdat, founder of Zeal Living said:
“The most successful advertising for me has been word of mouth in the form of social media, in-person markets, and my customers spreading the word about my business.”
Customers trust the opinions of other customers and the experiences they report. Hearing first-hand from a friend or a consumer about a product or brand, means they are more likely to buy. It comes as no surprise, therefore, that Mention Me’s third annual report into customer advocacy and referral trends (2020), revealed that 51% of UK consumers trust their friends or partners recommendations more than any other brand advertising!