How-to-start-a-business-with no funding and succeed by enolisme

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									Setting up a buSineSS with no inveStment
Tips and insight into key factors to consider when starting.



                                       Author Profile: Jamie Riddell

                                       A passionate music enthusiast, Jamie
                                       Riddell made his name as the far-sighted,
                                       entrepreneurial co-founder of UK Digital
                                       Marketing Agency Cheeze Ltd. Jamie now
                                       writes and consults across a broad range
                                       of interests, including web 2.0 and beyond,
                                       corporate strategy, branding, technological
                                       uptake and adoption, markets, the wise use
                                       of social networks, postcards and Pink Floyd.

                                       Jamie is listed in Who’s Who of Young
                                       British Entrepreneurs.
Background                                                          sure they share your vision. If you are starting with no
                                                                    investment then you will have to be prepared to make
In 1999, My partner [now wife] Katherine Jerman                     personal sacrifices. The large salary, company car and
and I set up a digital direct marketing agency called               expense account may have to wait. Sometimes the
Cheeze. It was started in the spare room of our                     salary may have to wait. If you believe in the business
cottage in Suffolk with a £5,000 overdraft. Back                    you have to give it your all, are you sure your partners
then there was no ADSL – The ISDN line was the                      understand that? Look for people with complimen-
first in the village. I had left a perfectly good job at            tary skills to widen the business’s capabilities. If you
one of the UK’s leading digital agencies in London                  are good at ideas and networking then you will need
and we had a five-month-old daughter.                               someone to focus on the detail. If you are the quiet
                                                                    detail merchant you may want a ‘front of house’ person.
From this humble beginning we grew the agency to be                 Each business and its requirements will be different.
one of the UK’s leading digital agencies, listed twice
in the Sunday Times Tech Track 100 Fastest Growing                  2. The Buck Stops Here – Get used to it.
Companies. In 2007, less than 8 years after founding                If you have come from another job, perhaps a large
the agency it was acquired for £10m to become a key                 company it may be a shock to realise that you have
part of the Digital Marketing Group plc. now the one                to do everything. If you start with no staff, you will
of the UK’s largest digital marketing groups.                       be making the tea, answering the phone, running the
                                                                    promotions and doing the work. There is no one else
Katherine and I have now left the agency to focus on                to do it so get used to it. Nothing can be beneath you,
fulfilling other ambitions. I took the opportunity to present       and nothing can ever be too much if you wish to succeed.
at Social Media Camp and decided to talk about setting
up a business with no investment. The current market we             3. Spend as much time planning for the unforeseen
are in, despite the credit crunch, seems very similar [dare I       problems as you do the ’sexy bits’.
say, reminiscent] of the dotcom boom & bust. The Internet           When starting a business there is excitement about
is the best of times, the economy is the worst of times. There      what you are going to do. You are going to change the
is great excitement about the possibilities of the Internet [this   world, make it a better place – become the biggest,
time with proper revenue streams] and this will no doubt            the best – there is a fair amount of dreaming when you
feel like the right time to set up a business but with markets      start a business which is invaluable. BUT the positive
still in turmoil will there be so much funding around?              stuff is the easy bit – so focus on the unforseen’s – the
                                                                    bits you don’t like doing. On the business plan, spend
So, with Katherine’s input I share ten tips for starting a          more time on the harder bits – what happens if we
business without the seeking external investment. These             don’t get paid on time; where is the next contract
ideas are borne from experience, which we hope can be               coming from? If you can be realistic, think and plan
taken on for others to learn from. We have included some            for the worst scenario as much as you do for the best.
insights that may help you understand our experience                Spending this time will help you deal with the bumps
and why we make these suggestions.                                  in the road before they become potholes.

If you like this work, please visit the blog at www.                 4. Seek a point of difference for your business/
jamieriddell.net for an extended version of this document           service/product.
with personal insight behind the suggestions.                       Seek a point of difference for your site now matter
                                                                    how small. Given the number of start-ups these days,
                                                                    there is a strong chance someone is doing something
                                                                    very similar to you. There must be an initial point of
12 tips to consider when                                            difference when you set out the business (please nod
starting with no investment                                         your head) – but what else sets you apart? Are you the
                                                                    fastest growing in your sector? This is when entering
1. Choose your partners carefully.                                  awards becomes important -no matter how small the
If you do plan on starting with other partners, make                award is, you can become the ‘award winning’ – can
you get an award or recognition to put on your site/          going to be claiming poverty and seeking a discount.
brand? Something that has greater brand equity than           So offer them a discount that has an incentive for
your new business? Adding such logos and associations         both parties. With bank interest almost negligible at
adds perceived weight to your company and will help           the moment, why not offer a discount incentive on
with the trust and credibility of your brand especially       prepayment – “Its better than keeping it in the bank”.
in those early days.                                          Prepayment reduces your risk of not getting paid,
                                                              so there is a value in having that up front, even if
5. Get the cash flowing.                                      you have had to tighten the price a little.
Cash flow, or lack of, is one of the largest killers of
small businesses in the first two years of life, so you       6. Get it in Writing. Always.
need to find ways to generate cash flow as quickly as         If you are doing anything for money, make sure you
possible. An option can be bank loans or factoring but        have the terms of the deal in writing and agreed
both of those will ultimately cut into the bottom line        [signed] by both parties. You need a contract to work
– no one will give you cash for free. Why don’t you           and make sure it is your own, not theirs. Investing in a
incentivise up front payment [at least partially] for your    decent legal contract that is tailored for your business
product or services? We are still in a recession and if you   is an essential start up cost. Don’t settle for a website
are in a service industry, no doubt your customers are        template version – it is cheap for a reason.
A contract between two parties states who is doing          your business are a great way of demonstrating your
what, for how much, what is expected and by when.           skills and at the same time growing audience the
This immediately removes any issues that may arise          audience of potential customers. It is no accident
from mis-communication or unfulfilled expectation.          that this document will appear in various formats on
It also serves as a legal basis to get paid. If someone     Scribd, Slideshare, the blog (www.jamieriddell.net)
does not want to sign a piece of paper, then you have       and also presented live. Each version will be slightly
to ask yourselves why. If they “don’t usually sign          different to target the different audience and require-
contracts” then you should already be walking in the        ments of each channel.
other direction.
                                                            10. Look for ways to ‘make money while you sleep’.
7. Look after the pennies.                                  A business can really grow if there are revenue
Look after the pennies and the pounds will look after       streams available when you are sleeping. Whether that
themselves. Pay attention to every invoice. Is the sum      is selling an online product 24/7 or generating revenue
right, does it have the correct currency? It is shocking    from clicks in the middle of the night, the businesses
how many invoices are incorrect or not clear. Query         that can grow revenue away from time and materials
them – send them back. Make sure you are only paying        will have the chance to grow quicker. If the core of
the invoices when they are correct for both parties. This   your business is based on service based hours then
is not the same as ’sit on your invoices’ – an efficient    look for ancillary products or solutions that can be
accounts department/person is possibly the most valuable    offered. Can you write guides for your industry?
asset a business can have. Paying bills on time and         Can you sell them online?
communicating with other accounts departments when
bills are not correct will help you maintain a good         11. Find a mentor.
credit period and credit rating which will become           It can be a lonely place running a business. Whether
important for cash flow. Dragging your heels with           you are the sole founder or you have a number of
invoices will just lead to losing your credit status.       people in at the start, you often feel like you are
                                                            re-inventing the wheel. Finding a mentor who can
8. Act with Confidence.                                     help offer a perspective on the overall business, the
If you are starting your business with no investment        wider market and what you are experiencing will
you may be small for a while – you may have small           greatly help you gain perspective on the situation.
offices, you may not have many staff. None of these         A mentor could be a non-executive director who
things are to be ashamed. Yes, there may be larger          works on a more formal basis (but will expect some
competitors out there but don’t let any of that diminish    form of remuneration) or an informal mentor who
your confidence. The business is you, and maybe a           is at the end of the line for a chat.
few others. You have to act with confidence in everything
you do. If people ask how things are going they need        12. Don’t forget Lady Luck.
to hear a positive story even if you aren’t feeling too     Sometimes luck or fate will have a role to play.
good. These are not lies, just a positive spin on the       You can’t plan for that but you should accept it will
situation – remember others won’t be as ‘close to it’ as    happen. Sometimes it will be bad luck other times
you are so they don’t need to hear about the problems.      it will be good luck. Roll with it.

9. Promote what you know, not just who you are.             Writing this has been really enjoyable, running your
The opportunities presented by social media and             own business can be exhilarating. It can be tough, make
search give young businesses a great opportunity to         no mistake, but we look back with fond memories.
demonstrate their knowledge. What we used to call           Trying to whittle down the ‘first ten’ points was tough.
‘PR’ has expanded into a much larger landscape of           So much so we left a lot out. If you liked this,
information and knowledge sharing. The tools in which       let us know – leave a comment on the blog at
one can share knowledge now range from Twitter to           www.jamieriddell.net, connect with me on Twitter
YouTube, Linkedin to Slideshare and Scribd. Success         @jamieriddell or email me Jamie@channeljamie.com
in this arena relies on you sharing what you know, not
just who you are. White Papers on a relevant topic to       Thanks for reading.

								
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