Posted on Nov 01, 2012 by | 0 Comments
The free events (held at the Business School) are designed to give everyone with an interest in entrepreneurship the opportunity to listen and learn directly from a number of successful entrepreneurs as they share their own personal experiences of the entrepreneurial journey.
PJ is a great example of a charismatic entrepreneur who was clear from a very early stage that he wanted to build his own venture - even if the business idea itself wasn’t set in stone from day one. The audience clearly appreciated his honesty about both the challenges and highlights of building a business from scratch within a competitive utilities industry so I thought it might be useful for me to note down a few key comments from the talk for anyone who wasn’t able to make it along:
- Whilst it obviously won’t apply to all entrepreneurs, don’t make the mistake of forgetting to sell the vision of setting up a business to your first and most important investor - your spouse. PJ was full of praise for his wife who had as he put it, agreed to follow a Canadian all the way to the Scottish Borders! Interestingly, I came across a similar post on this topic earlier this week on Brad Feld’s Startup Revolution (‘Your Spouse Is Your First Investor’). It’s well worth a read for any budding entrepreneurs out there.
- One way to find opportunities for creating a new business is to look for well-established, profitable markets where the entrenched big players are using a ‘one-size-fits-all’ model. If that’s the case, there will always be a gap which is under-served. Clearly identify that 1% who are being overlooked by the incumbents and concentrate your focus exclusively on catering to this niche.
- Failure is not unusual in entrepreneurship. PJ mentioned statistics which show that entrepreneurs tend not to be successful until their sixth business on average. So, to paraphrase Warren Buffett - start early! This gives you far more time to be successful over the longer term.
- As most people are aware, there are many ways to finance a business in the early stages - via equity, debt, grants, customers, suppliers etc. Spark Energy is unusual in many ways as it has been successful in securing almost the full suite of available options to fund its continued growth (with the exception of crowdfunding). Never forget that no matter how good your idea is, or how great the potential is, you are dead in the water unless you secure the necessary funds to run the business. The old adage has stayed constant across the years - turnover is vanity, profit is sanity and cashflow is reality.
- Thankfully for us (!), PJ recommended getting the best lawyers and accountants on board for your business as soon as possible in order to avoid making early mistakes that will only be far more costly down the line. Work hard to build relationships with other business mentors also who will generally be happy to give you the benefit of their expertise, to avoid you making unnecessary mistakes.
- Start any new business as you mean to go on. Your people will invariably be the most important asset you possess moving forwards so this means hiring the best people in the market to do the jobs that you need done. Don’t cut any corners. In the early days, you’re unlikely to have the time or the money to run any form of dedicated HR function. Don’t expect to simply replace people easily as the company grows. Also, don’t shy away from telling people the worst things possible about your company during recruitment - if they’re still keen to join, these are the people you want on your team.
- It's stating the obvious that starting a new business is risky. But this doesn't mean that you should be consciously looking to minimise all risks wherever possible. PJ is also a strong advocate of buying business planning software. It won’t give you the answers to your problems but it will force you to confront certain difficult questions about scenarios that may arise - minimising the risk of the so-called ‘Rumsfeldian unknowns’.
- Whilst the majority of entrepreneurs will be focused on achieving some sort of personal financial reward from building a business, the size of that goal will vary significantly between each individual. However, it was clear from PJ’s talk that the real driving force in his case comes from embracing the challenge of building a sustainable, profitable business.
An interesting night and a great Q&A session following the talk. If you’d like to attend the next Meet The Entrepreneur talks, please do sign upas I expect these to be popular.
In the meantime, I’m sure I’ll see many of you at the next event that we’re running at Business School on Thursday 15th November (‘An Independent Scotland: What Do The Entrepreneurs Think?').