You’re ready to take the leap and start up your new business. But how do you make sure it will be a success? With thousands of new businesses failing each year, starting out on your own can be a risky step, so it makes sense to do as much research and get the best advice you can.
Start-up accelerator MassChallenge UK, which launched here in February after much success in the US, helps start-up businesses by connecting them with mentors and investors. The four-month programme is open for applications until 1st April and £500,000 in prize money is up for grabs for the lucky winners.
Here are some great tips from the accelerator’s alumni entrepreneurs, supporters and sponsors to help you ensure you get the best start you need as an entrepreneur.
1. Get on with it!
Starting a new venture is a nerve-wracking business and it can be tempting to keep telling yourself that it’s just not the right time yet. Maybe all the stars will truly align for you next year, but if you're serious abuot starting your own business, it's better just to grasp the nettle and get on with it.
“There’s never a 'perfect' time to start your business or build your product,” said Linda Henry, managing director of the Boston Globe, film and TV producer, and director of youth engagement at Liverpool FC.
“The best time to start is today, the next best was yesterday but the worst time is tomorrow. If you wait for the perfect storm of circumstances you’ll never even start, so just go out and do the best you can right now.”
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2. Find your niche
Deciding who to design your products for can be a daunting task, but it’s better to have a niche group of keen customers than to spread yourself too thinly.
“You can’t please everyone,” said John Harthorne, MassChallenge founder and CEO. “If you try to make a product that makes everybody happy, more often than not you end up making nobody happy. A small group of very dedicated users is far better than a large group of indifferent users. ”
3. Understand the market
You may be convinced you have the world’s greatest product but do you understand your market?
“You're either starting with a market looking for a solution, or a solution looking for a market,” explained Ted Acworth, founder of Artaic and a MassChallenge winner in 2011. “If you're a technology entrepreneur like me, you probably have a solution looking for a market.
“While this can lead to a disruptive or revolutionary breakthrough, you may run the risk of wandering in the wilderness trying to find a customer niche, learning the market's inner dynamics, and developing a functional go-to-market organisation that generates sales... all while burning valuable start-up time and cash.
“Find a co-founder who understands the market as well as you understand the technology.”
4. Accept every meeting that comes your way
When you’re starting out in business, it’s a good idea to embrace every meeting you’re offered. Make sure you chase down every lead that comes your way, says Adam Carrigan, chief operating officer at Real Life Analytics.
“When you are a young company you need to chase every lead, and meet with everyone who will meet with you," he said. "You never know where it might get you."
5. Consider bringing on board angel investors
Angel investors are experienced business people who, as well as injecting finance into your company, can providing mentoring help. It’s worth deciding whether having one by your side as you launch your business could make all the difference, says Jenny Tooth, chief executive of the UK Business Angels Association.
“Angel investors bring not only much needed early stage finance, but also business skills and contacts that can be very valuable to helping businesses successfully grow and scale-up, generally offering between £50k and £500k first round,” she said.
“Angels are looking for competent and passionate entrepreneurs that can offer new disruptive products and services in the market and the potential to scale and bring a ten times return.”
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6. Decide whose advice is worth listening to... and ignore everyone else
Everyone and their dog will happily tell you how to run your business but one of the most difficult things is deciding whose advice is worth taking, says Minhaj Chowdhury, founder of Drinkwell and winner of MassChallenge’s 2014 $100,000 prize.
“From your co-founder to your mother, everyone will have an opinion on how you are running your business,” he said. “Ultimately though, it is up to you to decide who to listen to when making a certain decision.
“Knowing who to listen to when you’re in a specific bind is the hardest part of entrepreneurship, so be mindful of what decision point you bring up to a certain person.”
7. Fail as quickly and cheaply as you can
Failure is a sad fact of business life. Products and services don’t always work, but when things go wrong it’s better to accept that they have failed and move on rather than keep banging your head against a brick wall, says Jeremy Basset, global marketing strategy director at Unilever.
“If your product is going to fail, it’s going to fail,” he said. “The best thing you can possibly do is to fail as quickly, and as cheaply, as possible so you can get building on the right path.
“Too often people grind and grind and grind, spending tens of thousands or hundreds of thousands of pounds even to get traction when what they should really be doing is going back to the drawing board completely. It’s ok to pivot and start again.”
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8. Don’t just take the money and run
If you’re considering exiting your company, it can be tempting to sell out to the first buyer who comes along. But take your time and don’t take less than your venture is worth, says Leonide Saad, founder of Alkeus Pharmaceuticals and MassChallenge’s 2012, $100K Diamond Winner.
"Never undersell your company. Resist the temptation of "fast" money. There's no such thing. Instead, slow down a bit and pick wisely a small set of smart investors who value your business just as much as you value yours."