Moving from a director-level position to entrepreneur is a step into unknown terrain that can bring great success and satisfaction, but it’s not guaranteed. The potential reward outweighs the risk and spurs entrepreneurs on, but not without a degree of trepidation.
Having worked as an executive board director at a FTSE 250-listed recruitment company, I decided to start my own venture, Sonovate, so Ive experienced first-hand the mixed feelings of excitement and uncertainty. So for those aspiring to develop a successful new business but are unsure how to get started here are some important points of advice:
(1) Establish clear differentiation
Theres no sense in entering a competitive market with the same old, same old. For your business to be even stand a chance of succeeding, it needs clear differentiation.
In my case, the inspiration for a unique business idea came from almost two decades in the recruitment industry. This experience gave me an in-depth knowledge of the ongoing challenges and opportunities facing the contractor market. I spotted a gap for innovation, and launched Sonovate to alleviate the age-old but unresolved financial and administrative burdens recruitment agencies face when placing contract and interim staff.
Innovation and differentiation are integral to entrepreneurial success. So, too, is commitment. Make sure to hire staff who have clear commitment along the necessary skills and experience to helping you drive your vision.
(2) Secure funding
Getting a new business idea off the ground (and keeping it there) requires financial assistance and often a lot more than you think. There are many different options available, so you need to carefully consider which is best suited to your business. Dont knock on a hundred doors; rather, build a focused list of potential investors who are a match for your vision, and only contact them once you have a solid business plan in place.
Attracting capital investment takes a well-crafted action plan, and is ultimately won with a competitive go-to-market business strategy. Investors are often interested in long-term business returns: get your business off on the right foot and you could attract further important funding down the line.
Read more about alternative finance:
- Alternative finance for 2016: what are your options
- P2P finance exploded in 2015 as loans from Lending Works grew fourfold
- How UKs equity crowdfunding success will take tech investments to $8.2bn by 2020
(3) Be a leader but ask for help when you need it
Not even the most varied of careers can fully prepare you for starting your own company. As the founder, you will oversee IT, HR, marketing, finance, and sales all at the same time at least in the very beginning. Its a daunting job that calls for a level-headed temperament and an ability to juggle internal and external challenges on a daily basis.
Its your job to lead the business strategy, keep investors happy and employees engaged. Staying true to your company vision is essential to creating a healthy and productive company culture, and securing ongoing funding.
That being said, there is only so much one person can do, so always ask for help when you need it. The potential to learn from someone more experienced than you is invaluable, and will make you a better leader going forward.
(4) Use what you know
When embarking on a new venture, it’s easy to forget what you already know and miss how your experience in one area can be applied to another. Director-level experience in your chosen industry provides a strong foundation for building your business: nothing can negate the importance of strong business acumen, along with fundamental skills such as networking and negotiation.
Before starting Sonovate, my career in the recruitment industry gave me exposure to all levels of organisational development, from staff to client management, from business operations to strategic running costs. Your experience is incredibly valuable: make sure to use it to make informed decisions regarding key hires, and how to best allocate your resources.
Stepping out into an uncertain world as an entrepreneur is a bold move. Its not for the faint-hearted, but it can be done and the better prepared you are, the better your chance of success.
Richard Prime is co-CEO at Sonovate.
Capital is the lifeblood of a fast-growing business, whether this cash comes from customers, mergers, crowdfunding or venture capital. This puts a lot of pressure on the act of raising finance, so it’s no surprise that pitching for venture capital funding can be particularly stressful for founders.