Rex Lambert, Editor of The Listener, wrote in 1936, 'Television won't matter in your...

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•Rex Lambert, Editor of The Listener, wrote in 1936, 'Television won't matter in your lifetime or mine.'

•John Langdon-Davies, fellow of the Royal Anthropological Institute opined in 1936, 'By 1960 work will be limited to three hours a day.'

•Sir Richard Woolley was the British Astronomer-Royal who declared in 1956 that, 'Space travel is utter bilge.'

•Don Rowe was the director of Decca Records who turned down the Beatles. He said to their promoter, Brian Epstein, 'We don't like your boys' sound. Groups of guitarists are on the way out.'

•Frank Sinatra in 1957 stated, 'Rock and Roll is phony. It's sung, written and played by cretinous goons.'

•Ken Olson, CEO of DEC said in 1977, 'There is no reason anyone would want a computer in their home.'

•Bill Gates stated in 1981, '640k ought to be enough for anybody.'

Don't be put off – go for it!

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Start up Issues

.......And how to avoid them

Peter Doggett – Vistage International

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I have an idea..........

• Write and paint your dream• Find something you really believe in• Keep it simple• Surround yourself with honest and positive

people• Be realistic about your time and cash• Review Review Review

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So where should you start..?

• Start with WHY• Then with WHAT• Then with HOW

• Too many businesses fail because they start with what and how before considering why. What’s your why?

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Start UpIssues

Skills and experience

Time & passion

Support

Partners

Planning

£££££Pricing

Marketing

Selling

Growing

Ideas

YOU ARE HERE

end

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TIME

• The issues– Not enough time– Poor time planning/utilisation

• The cures– Proper planning – be realistic– Don’t underestimate– Take breaks– Ask for help

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You - your skills, passion and commitment

• What are the issues?– Commitment– Time– Get bored/distracted– Discouraged– Scared

• The cures– Who are you?

• Are you the right person?– Why do you want to start a business?

• Are they good reasons?– Personal SWOT

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Confidence

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SKILLS AND EXPERIENCEAlways 4 Sometimes 3 Occasionally 2 Never 1 Possible consequences

Can you work long hours with persistence & stamina?

Can you balance work:family & friends?

Is £ a big motivator for you?

Can you deal with criticism and failure?

Do you prefer excitement and risk over stability?

Do you treat problems as a challenge?

Do you find it easy to talk to new people?

Can you persuade people?

Do you find it easy to ask for help?

Are you self confident and independent?

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NOTE:CRISIS,OPPORTUNITY&THREATSHAVE SIMILAR CHINESE ROOTS

STRENGTHSWhat are you really good at/talented at ?

WEAKNESSESWhat do find difficult-what are you not very good at?What do you need help with?

OPPORTUNITIES Zone of Riches ACTIONS = S +O Wannabe Zone ACTIONS= W+O

Current opportunities – personal and business challenges.

What are you good at? What should you focus on to give easy and significant ‘wins’?

What special action do you need to take to compensate for your areas of weakness to turn them into positive results?Who could help you?

THREATS Get tough Zone ACTIONS = S+T Hazard Zone ACTIONS = W +T

What threatens your success in your role?

What will happen if you don’t use these strengths to address the threats-what’s stopping you?

What will happen to these threats if you don’t recognise and address your weaknesses – what do you need to do?.

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The Idea

• The issue– No ideas/limited ideas– Don’t know how to get started

• The cure– What do you love doing that somebody might pay

you for?– Who could you talk to who could help?– What is unique/needed/you can do better than

others?

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The Big Idea

• How do you decide?– Something you like/are good at– An existing product – but yours is better– A new market or product/service– An existing market or service– Where’s your niche?

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Create something that is unique … If you set up a company selling widgets like the bloke down the road and the only difference is that yours are cheaper, you’ll make a living, but that is all you’ll achieve. If you can be truly differentiated and unique, then you’ve really got something.

Martyn Dawes, founder of Coffee Nation

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The Support

• The issue– Who can help me?

• The cure?– Ask people you trust & who are positive – not too

emotionally attached.– Beware of strangers bearing gifts– Network with purpose– Get a mentor and be very honest.

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Partners• Key to your success or...• A major part of your failure

– Chose carefully• Complimentary skills• Same passion• Same ethics• Do you trust them implicitly• Do the have similar ambitions?• Families are not always the best

• Above all – create an agreement very early on in your growth

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Cash £££• The issue

– I’m no good with money– I don’t understand

• The cure– Keep it and systems simple– Watch the cash at all times especiallY

• Bank• Breakeven• Key numbers that drive your sales

– Be honest– Keep good but simple records

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Where can I get financial help?What will I need?

• Before doing anything – Business Plan – honest and realistic• Establish how much you can put in yourself• You’ll need

– Setting up funds – e.g. Premises/equipment/IT etc– Working Capital – funding the gap between paying for materials and receiving money from your suppliers

• Funding options (sole trader)Cost Security Risks/implications

– Self £ Nil Overspending– Families & friends £ Nil Relationships– Partners £ Nil Will want a share– Banks – overdrafts £££ YES Withdrawal– Banks – long term loans ££ YES Limited– Foundations £ Nil Low– Some government agencies £ Some Low– Business Angels ££ Some Will want return

• The more risk they take the more they’ll want you to contribute, provide security and a payback

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Items sold @£10) 25 50 75 100 125 150 175 200 225 250

Sales £ 250 500 750 1000 1250 1500 1750 2000 2250 2500

Cost of sales 100 200 300 400 500 600 700 800 900 1000

Gross profit 150 300 450 600 750 900 1050 1200 1350 1500

Expenses 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Op profit -850 -700 -550 -600 -450 -300 -150 -200 -50 100

Break even 1667 1667 1667 2000 2000 2000 2000 2333 2333 2333Expenses & Cost of sales 1100 1200 1300 1600 1700 1800 1900 2200 2300 2400

25 50 75 100 125 150 175 200 225 2500

500

1000

1500

2000

2500

3000

Sales £

Break even

Expenses & Cost of sales

£

Units sold

IMPORTANT NOTE

Small increase in sales price rapidly reduces break even

Even small discounts increase the break even considerably

BREAK EVEN

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Plan Plan Plan

• Keep it simple– Spread sheet

• Review– Keep a score– Define what will drive

sales– Work out your break

even – how much do you need to sell to make a profit?

£

Selling price £10

Number of sales 250

Total sales £2500

Cost of Sales £1000

Gross profit (%) £1500

Expenses £1000

Net Profit £ 500

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Marketing

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Planning – the development process

Concep

t

Feasibility

Develop

Trials

Launch

ReviewReview Review Review

IdeasSketchesModels

Business planPrototypesCustomer feedbackResearchFunding

Finalise plansMarketing sales strategyDevelop final productSystems

Test real products with real peopleReview and change

MarketingCustomer feedbackMeasureControl

REVIEW = YES or No or modify

COST OF STOPPING

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Pricing

• Key to your success– Market research– Decide where you will focus sales– Don’t confuse the market– Care with discounts– Don’t fiddle your business plan by using un

realistic prices which you cant achieve

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Marketing

• Who are you trying to reach?• Where are they?• What do the do now?• What do you want them to do?• What do they read, watch, listen to?

• SOCIAL MEDIA?

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Method Response

Radio 0.1%

TV 0.04%

Bought data lists 5%

Direct Mail 0.5-3%

Newspapers 0.13%

Telemarketing 6%

Texts 13%

Inserts in magazines Up to 2%

Blackberry etc 10-20%

Online banner ads 1-2% click through

Online adverts 2-20%

Your website ?

PPC Up to 2%

Door drops Up to 4%

BUTACTIVE CUSTOMER MAILING RESPONSE 12.5%

WITH PERSONAL FOLLOW UP CAN BE 40%

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“What you dospeaks so loudly that I do not hear what you say”

Ralph Waldo Emerson

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Selling

• How?• Where?– Location– Marketplace– Internet

• Who – you or....?• Costs?

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Change is criticalto Success

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Go forth and multiply!

• Write and paint your dream• Find something you really believe in• Keep it simple• Surround yourself with honest and positive

people• Be realistic about your time and cash• Review Review Review