Four entrepreneurs share their lessons on how to avoid making rookie mistakes
9 min read
19 November 2015
The saying "you live and learn" is a common one, but when you’re starting your own business, every decision matters. The decisions you make could have a direct impact on customer or vendor relationships, employees and ultimately on your bottom line.
Therefore, ensuring the right decision is made at the outset or having the ability to quickly bounce-back and adapt when the first move wasn’t the right one, puts a lot of pressure on entrepreneurs.
The pressure is further increased when just under half (45 per cent) of SMEs survive more than five years and competition from larger, or even international, counterparts is fierce.
How then, in today’s fast paced business world – where over 40 per cent of SMEs are fearful or worried that they will not be able to keep up with the growth of digital technology over the next five years – can smaller businesses quickly identify, learn from and move on from their mistakes?
One way is learning from the experiences of their peers. Here are insights from leading entrepreneurs across the UK that Vodafone is currently working with. These individuals have shared what they have learned from their mistakes and are offering their top tips to others in similar scenarios.
(1) Don’t get stuck in the “here and now” if you want to grow. Plan for the future
By Guy Blaskey, founder of Pooch & Mutt
“My biggest mistake is not aiming big enough, early enough. For our first few years we were a very niche company selling premium pet health supplements via online, specialised pet stores and ‘enlightened’ vets who look for medication alternatives.
“While we had a great reputation, we were slow at growing. We weren’t making mass-market products and didn’t understand how to sell via supermarkets and retail chain stores.
“Over the last four years however, we’ve grown massively and now have an even better reputation. We also have far more products, and are helping more dogs lead happy, healthy lives with our foods, treats and supplements.
“The ‘early years’ definitely gave us a great foundation, which are key to our success now, but I do question where we would be now if we did long term planning earlier, versus focussing on the ‘here and now.’
What supported our recent growth spike – and the best thing we ever did – was working with a business coach through the Government’s Growth Accelerator programme.
They helped us by looking at where we wanted to be in the next five years then plan backwards for how to get there. This seems very easy and obvious, but surprisingly few people (me included at that time) actually take the time to do it properly.”
(2) Don’t let your price point underestimate the value and experience you offer customers
By Jenn Patient, founder of Mini Masterchefs
“One of my mistakes when starting out was setting my price point. Being a startup, I was apprehensive about pricing myself out of the market by being too expensive and how I’d stack-up against what my competitors are offering.
“So, my advice would be to understand your market and comparable pricing in your area, but also be confident about the value of your offering.
“If people want your product or service, see the value and are happy with their overall experience with you and your company, they will be willing to pay.”
What happens if you want to stay a small, niche company? How important is your digital presence? Continue reading on page two to discover more tips.
(3) If staying small and niche is your plan, make it your selling point
By Lucinda Johnson, company director of Movindaal Interiors
“The biggest mistake we’ve made since starting Movindaal Interiors was in not wholly focusing on our niche, unique selling point (USP) – our company. We felt pressured to explore a more mass market offering.
“However, luckily we realised relatively early that we do in fact have a niche USP which is our bespoke and luxury interiors and finishes, based on a team of exceptionally skilled artisans, representing the essence of our business. The key to our success is in staying true to that, working with a core group of clients, and absolutely focusing all efforts on the quality (rather than quantity) of our work.
“Although it’s incredibly tempting to focus on scale in the early days, it may not be the most sensible or lucrative path to market for your company. Be brave enough to remain niche and exclusive.”
(4) A website says it all
By Kuljit Thiaray, founder of Desi High Street
“Desi High Street is the first online marketplace for UK retailers of ethnic goods. Establishing an online marketplace, joining retailers and customers, however, is known to be tricky. You need to simultaneously get businesses to agree to sell on your marketplace and drive customer traffic to the site.
“While we had a comprehensive business plan and a clear strategy, we still managed to make some rookie mistakes. For instance, we were actively recruiting UK retailers when the website was still being built. Eventually, it became evident that the retailers needed to see something tangible regardless of how good our launch offer was.
“What we had failed to recognise was that we needed to build a non-functioning mock-up of the website to show retailers how Desi High Street would eventually look.
“We learned very quickly that we needed to be much more aware of the factors involved in the retailer’s decision making process, and the appearance of our website was a key one. Building-up a solid base of selling partners prior to launch would have been much easier if we had created a mock-up of Desi High Street.
“Now that we are live, retailers can see how Desi High Street looks and feels and as a consequence we have seen our sign ups increase since the website has become accessible to them.
“The tip we would give is put yourself in the position of a customer and imagine looking at your business with no prior knowledge of it and scope out the customer journey.”
While the experiences of these entrepreneurs vary, one thing they all have in common is the understanding of the importance of digital technology: having a website is seen as fundamental to their business.
This may sound simple or even an obvious first step however almost a third of SMEs in the UK do not have an online presence at all, placing them at risk of missing out on sales opportunities and the chance to compete in a bigger market.
However this is just the first step for entrepreneurs in today’s digital era. The speed at which the market, workplace and customer expectations are changing means businesses need to be able to adapt more quickly while protecting the bottom line.
One way to be ready for what the future throws at you to is make the most of digital. In fact, nine out ten SMEs say the use of digital technology is essential to their business’ overall success.
Today’s entrepreneur cannot ignore the importance and role of digital technology if they are to quickly recover from mistakes, grow their business and keep pace with change.
Phil Mottram is enterprise director of Vodafone UK.