7 ways to improve your chances of business success

23/11/11

Johnny is an enthusiastic educator and communicator who loves demystifying and explaining business finance. He is a British Library partner and passionately promotes financial understanding at his workshop Essential business finance. Here are Johnny’s top tips on some ways to improve your chances…

1. Be very clear exactly what it is you do – customers and investors alike need to be able to put you in a category in their mind e.g. “ah Johnny – he explains numbers to entrepreneurs”. This level of focus and clarity is essential, especially in your business plan otherwise busy investors won’t get what it is you do. This is a very common reason for rejection.

2. Partnerships - When you start, avoid going into business in a 50:50 relationship – the business world is littered with broken partnerships. Someone needs to be in charge. It may be reassuring when you start to have a partner, but inevitably one of you will outgrow the other.

3. Documentation – Make sure you document agreements – after a meeting send an email confirming what has been agreed. This is not a substitute for legal agreements, but given legal agreements cost at least £700 a pop, it is better than nothing.

4. Sales forecasts – most business plans unravel because the sales target is unrealistic – usually not in the level of sales but how quickly it is assumed the business will ramp up. Now there is no magic wand to get it right, but look at the rate of growth of similar businesses or businesses selling related products or with related customers. How long did it take them to build up? And never ever describe your sales forecast as conservative in your business plan – red rag to investors.

5. IP – virtually every business is now dependent on its IP for competitive advantage – make sure you understand how this area works. Investors certainly will. There are some great resources and workshops at the Business & IP Centre.

6. Marketing – getting noticed, creating the bridge to your customers (as the business schools call it) is crucial. Whether it's JCB painting their tractors yellow or Everbuild putting a pink dye in the impact adhesive, there is no point having a better mouse trap if people haven’t heard of you or noticed you. This is also why investors pay such attention to the marketing section of your business plan – its not enough to just say £15,000 on PR and social media.

7. Taking too long on the Plan – I meet so many people who have been working on their business plan for YEARS! In today’s internet world the only certainty is other people are thinking about your idea too. You need to plan – but get started!

And of course after you have started, always remember Siddhartha Guatama, the spiritual teacher who founded Buddhism, who said: "There are two mistakes one can make along the road to truth. Not starting and not going all the way."

There’s no value until you finish.

For more information and to book a place on Johnny's workshop Essential business finance.