By David Dickson
David Dickson is an experienced business person involved in a number of partnerships in both the public and private sectors, at regional and national levels. He is a non-executive director in a number of mainly family businesses. A chartered accountant by profession, he now gives general advice on business, succession, fundraising as well as mentoring entrepreneurs.
It’s important to work out exactly why you want to start a business. Becoming an entrepreneur is a life changing experience that requires real commitment. Whilst there are many advantages, there are also a number of potential pitfalls that need to be understood in order to be successful.
It may simply be that you want to work for yourself and be master of your own time. Most entrepreneurs don’t make loads of money but still have a great life and can change the world around them. That’s great. However, if you want more, the next stage of growth requires more money and more risk. The rewards can be great, but so are the risks, in terms of both finance and time.
Rather than developing a business plan, I advise people to develop a personal plan which might include your business. For instance, if you’re a young person and you want to become an entrepreneur, your plan would include:
- Why being an entrepreneur is good for you - the down sides and the good sides.
- Have you got a business idea that has value, that people want to buy and you can make a return on?
- What skills do you have? How will you fill any gaps in knowledge?
- Do a business plan. Put it in a drawer for a week. Then find a valued friend and ask ‘Is this me or have I made this up?’
- Accept their honesty, whether it’s ‘Yes’ or ‘No’. They may highlight what you should really be focusing on!
- Raising money can be incredibly difficult and it really depends on how much you want and what you want to buy. It’s also important for entrepreneurs to understand that business grants are not the panacea for financing their entire operation, but they are part of the overall scheme.
- There aren’t that many business grants around anymore, but those that are available are more attuned to providing part of the finance. They are especially good for training and buying equipment. A good starting point is to see what your local authority and your Local Enterprise Partnership (LEP) have on offer.
- When applying for a grant, go in looking for small amounts of money so that you can try out the idea first.
- Most businesses don’t need you to own property or machinery, so hire or borrow in the first instance and test the market out. You don’t know how good your ideas and products are until you test them. If it works, you can invest in your own property/machinery later.
Realistically, most of the money you will use to fund your business will be your own. That’s why your family needs to buy into the hassle, concern and stress that goes with you being an entrepreneur, so when the money is not there or it’s slow to come through, they understand that it’s going to take time. However, if it still hasn’t happened after four years, then you need to have another look and change your focus.
Remember, running your own business is high risk and for those with families and children, you are potentially putting their futures at risk by taking the step of no longer relying on a regular salary. It’s not a decision to be taken lightly.
Essential tips for business success
- Develop a support network. Having a business is like a series of traps. Those who get around the traps succeed. You don’t have to have the best idea but you do need good people around you. Having a supportive family and friends is essential for success.
- Be prepared to pick yourself up when things go wrong and have mechanisms in place to support you and to help you move forward.
- Be aware that you will fail at some point and that failure is part of life and success.
- Always keep everyone informed so there are no surprises. This is the best way to maintain good relationships with your bank, customers, suppliers and workers. If there’s a problem, tell them what it is. Working together in a team solves the problem so much quicker.
- Be trustworthy and stick to your word.
- Growing your team. While profit might have been the only motive 20-30 years ago, it doesn’t work now. People want to see shared values, a lower carbon footprint and career progression, incentives and a real living wage.
- Work hard and reward people. This is so important for team camaraderie rather than having a ‘me, me, me’ culture.
About the author
David Dickson is the Chair of St Leonard's Hospice, York, one of 4 charities he is heavily involved in. He is Deputy Chair of the North Yorkshire LEP and sits on the Northern Powerhouse Investment Fund (NPIF) advisory board.
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