Category Archives: Business Ideas

The 5 key things you must do before revealing your great idea

Business secretI often get calls from members who are looking for a Business Partner or Investor but are concerned about how much they can reveal of their business idea.

It is a conundrum; because on one hand you need to tell something of your business idea in order to attract a partner or funding, but too much and surely the idea will just be stolen. In my experience this is the 5 actions you must do before telling all:

  1. Determine if your idea is patentable. Generally patents relate to new inventions that are not obvious to anyone with knowledge of the subject and can be used in some sort of industry.

    You may need to employ a patent agent in order to see if your idea is patentable. We have more about patent agents in our resource pages.

    If it is patentable, you should not tell anyone about it until you have applied for the patent, otherwise the idea could be considered in the public domain.

  2. If it is not patentable, can the design of your product or brand be registered?

    Design registration applies to the shape, colour and style of products that aren’t in themselves new ideas but protect your particular design.Again we have an article on our resource pages on this, see Design Registration.

  3. Think about protecting your brand. This is your logo, product names or packaging and any distinguishing ways you have of representing yourself. See How Trademarks Work and this resource has information on Copyrights.
  4. Spotted a gap in the market? Have a novel way of doing business?

    Unfortunately there’s no registration that will protect ways of doing business or addressing a new market area.

    If you are concerned about discussing your original idea for a business with a potential partner or Investor you could ask them to sign a Non-disclosure Agreement. You can see a NDA example here.

  5. Finally, get first mover advantage. If your great business idea really is good, eventually others will start to copy you. This is inevitable, but by being the first to market you will already have captured some customer’s loyalty and will be ahead of the competition in terms of understanding the market and developing your product or service.

    To grab that first mover advantage you must move fast and when you have launched keep innovating, don’t rest on your laurels.

To give a bit of reassurance, in all the time that I have been advising and helping  people with business plans and bringing business partners and Investors together I’ve seen no cases where an idea has been stolen.

Generally it is the implementation of the business idea rather than the idea itself which counts. There are a lot of good ideas, but most never get off the drawing board and the ones that are successful are those that are not only acted upon, but are executed brilliantly.

 

Top 8 mistakes when seeking Investment

Investor reading business planAt Company Partners we talk to a lot of Investors and we often get the same observations about what Investors like and don’t like.

Although I normally try and accentuate the positives to be learned, there are valuable lessons from the goofs to be avoided, here’s my top 8 mistakes when seeking an Investor:

 

  1. You know it all, any advice about your product, strategy or sales projections is actually criticism and must be defended.
  2. The most important thing is to talk in detail about your product or service, you haven’t got figures but the market is begging for it and the sales will be enormous.
  3. There isn’t a business plan, that’s not your expertise, you just want to get in front of an Investor and they will jump at the opportunity.
  4. Mails and any communication with Investors are perfectly all right with typos and all in lower case or “text speak”, it’s your idea not your spelling they should be interested in.
  5. No work has been done to prove the concept, you’ve not the money, expertise or contacts to do so, that’s why you want an Investor.
  6. Although the business hasn’t started yet and has no revenue you want £100k for 20% of the business.
  7. Good news you’ve found a potential Investor, but his demands of equity are unrealistic, after all it’s your baby we’re talking about.
  8. You don’t have any idea how much investment you need, or what it will be used for, you just know you need someone to invest.

Let’s face it, it’s hard to know what is needed or what to avoid when you are seeking investment for the first time and we shouldn’t diminish the hard work entrepreneurs do in looking to grow their business. It helps to learn from others mistakes though.

 

Case study – finding a business partner

Case study Funding Secure

 

With Peer-2-Peer lending growing in popularity, Norman Akram realised that there was an opportunity for a company whose business model protects lenders against bad debt (most Peer-2-Peer loans are unsecured).

A well tried model already existed in the form of pawnbroking and Norman set about developing a website platform for lenders and borrowers to interact with one another, allowing loans to be secured by suitably valued goods.

Although Norman had the concept, he required partners with complimentary skills such as finance, management and marketing.

Having tried other places he turned to Company Partners and joined as a member to look for either a business partner or an Investor for his start-up.

That’s where Richard Luxmore came in. Richard had joined Company Partners as an Investor and had a background in accountancy and management, but was looking for a new and interesting challenge.

After finding each other on the site, they progressed through emails and then Norman and Richard agreed to meet up and look at how they could work together.

How did that meeting go? Well the proof is in the launch now of one of the most innovative and fast growing businesses I’ve seen for awhile; Fundingsecure.com .

There are some lessons to be had from this success.

  • Do your research upfront. Norman had already gathered accurate statistics and information on competition and the market. When he met Richard, he could present the facts, not just a hopeful idea.
  • Have a vision of what you want to create. Then when inevitably you have to be flexible in altering aspects of the business you can refer back to that vision to ensure you make the right changes.
  • Start with a partnership heads of agreement or get something down in writing of how you will work with your business partner, but be prepared to be flexible in changing it as you discover what works.
  • Build a team of good people around you, be flexible (that word again) with your infrastructure in order to maximise each person’s contribution and to accommodate those good people.
  • Don’t have high fixed costs, such as premises or cars and do as much as you can yourself. Preparing some external work like web site design before the programmers start and preparing legal documents that the lawyers could then review all help precious start-up funds go further.
  • For those thinking of a web based business, be aware that offshore web development may seem cheaper, but in a start-up you need to be able to sit down and talk with your developers, Fundingsecure changed from an offshore developer to a local one to ensure communications worked.

If you want to find a business partner like Norman and Richard, have a look at what Company Partners does for its members.

 

Want to get into business? We look at the options

Business choicesIf you’ve got past the headline then you obviously have a hankering to be your own boss. The arguments for going into business are well rehearsed – you can make your own decisions, choose who you work with, enjoy the fruits of your success and so on – but, arguably, the paths into entrepreneurialism are less well documented.

Mention entrepreneurship and many people will think of starting their own enterprise and base their decision on whether to become an entrepreneur on the merits and risks associated with starting your own business.

But there are, of course, two other ways into business: buying an established business and buying a franchise. Each option has pros and cons and will suit different attributes, skills and circumstances.

To get you thinking about which option is right for you, here’s a rough outline of the three choices, their attractions and drawbacks, potential rewards and risks. There’s also a suggestion of the type of people they might suit – though by no means do we want to be prescriptive about this.

Starting a business

Starting a business from scratch is far from easy, but affords the entrepreneur the freedom to generate a business idea and build it as he or she sees fit. It’s tough in the first couple of years, where the owner acquires and fits out premises, fulfils any regulatory requirements, begins to build a team and starts marketing the new brand to its market.

Advantages

  • Creative: generate the business idea yourself, develop the products and services and your marketing strategy
  • Freedom of choice: choose your premises and location, your own team and build the business as you see fit
  • Satisfying: any success is truly your success

Drawbacks

  • Risk of failure – especially compared to buying a business or franchise
  • Formative period is often stressful and time-consuming, as you establish a foothold in the market with few staff, few customers and little brand-name recognition.
  • Expect to work long hours in the first 1-2 years
  • Difficult to raise finance, especially in competitive markets or for novel ideas, particularly in current climate

Suits

An “ideas person” will enjoy generating new ideas that gain an edge in existing markets or break the mould and forge a new niche. You could argue that starting a business suits people who can afford to fail – the childless, or those wealthy or young enough to move on and try something else if it doesn’t work out.

Buying a business

Businesses are sold for a variety of reasons, including retirement, illness, a desire to change sectors, a perception that the value has peaked. Although the business buyer is skipping the challenging start-up phase, the business buying process itself can be difficult, and must be conducted with care. Failure to research the market and conduct proper due diligence can result in paying over the odds or buying the wrong business.

Advantages

  • Providing you choose wisely, you could be profitable with a strong market presence from the moment you take over
  • Arguably also less demanding than starting a business for the same reason
  • Possibly easier to raise finance; banks keener to lend to businesses with track record of profitability as opposed to an idea that only exists in a business plan

Drawbacks

  • Can be expensive buying ready made profitability or floundering business requiring further investment
  • Buying process can be protracted and deals can collapse at last minute
  • Change of ownership poses problems – staff alienation from new regime, customers deserting you because they liked previous owner, can be difficult to steer business in fresh direction

Suits

If you’re cash-rich the dearth of credit means there are plenty of bargains on the market. If you’re excited by the challenge of turning round a failing business, and like to be in full control but don’t fancy a stressful start-up period – perhaps you’ve been there, done that – then buying an established business will suit you.

Buying a franchise

Buying a franchise is a more formulaic route into business ownership, where you follow tried-and-tested systems and the risk of failure is generally low. In return for an initial franchise fee, and often ongoing monthly management fees or percentage of your revenue/profit, you operate under the name of an established brand, selling its goods or services, with support and training from the franchisor.

Advantages

  • Providing you buy into a successful brand – McDonald’s or WSI being prime examples – the risk of failure is negligible, and failure at the application stage at least entails no financial loss.
  • Following a proven formula, it’s arguably less challenging than the alternatives
  • Also buying brand recognition and training and support – meaning you’re in business for yourself, but not by yourself

Drawbacks

  • Following a rigid formula you rarely have leeway to tinker with product, prices, decor or any other aspect of the business
  • Generally pay monthly management fee or proportion of revenue/profits to franchisor
  • Must pass rigorous application process, particularly for the biggest, most successful brands like Subway

Suits

Someone who wants to be their own boss but doesn’t mind following a rigid formula, and who wishes to keep risk to a minimum. With a number of home-based, part-time franchise opportunities available for a modest investment, franchises are also popular with parents of young children.

This article was contributed by BusinessesForSale.com, the directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.com

Start or grow your business now – what’s holding you back?

Start and grow your business

Start and grow your business in 2013

It’s a New Year and the entrepreneurial juices are flowing. It’s time to start the business that you’ve been talking about for years. What’s stopping you?

Or maybe you’ve already got a business but it’s not growing as fast as you had thought, what has to happen to make this year the year it doubles its revenue?

I’ve talked to thousands of prospective entrepreneurs and small businesses over the years and surprisingly it’s not always lack of funding that is the biggest hurdle. It’s fear of the unknown.

Whether you are dreaming of starting a business or hoping that this year your business is going to somehow take off, it is much more comfortable to continue dreaming than to do something about it. The dream is warm and cosy; we can lie in bed and feel comforted that our lives can change for the better at any time. But if we take action, what if it doesn’t work out? There’s no longer a dream just trouble.

When I started Company Partners, one of the key drivers was to allow people to find a business partner with complementary skills and a like-mind. Having a partner will motivate and encourage anyone starting a new business. It’s quite daunting by yourself.

For existing businesses, sometimes it’s not a new (expensive) employee that you need but someone else with ideas and energy that could join as a risk (and reward) taking partner to grow the business.

Yes having the funds to start or grow a business is also important and that’s why we have such a strong Investor community on Company Partners, but the first thing is to stop dreaming and do it.

There are things you can do to get the ball rolling. Write down your ideas for a business, or the way that you would like to grow, think what you need to do in order to make this happen. Dare I say, join Company Partners and search for a business partner, or Investor.

The key is to get started. Don’t wait, have drive, energy builds on energy.

 

How to find more customers – the top 5

How to find customers1. Get free PR

If there was an unlimited amount of money to spend, advertising would be easy, but normally there isn’t. So what can you do? Well this is where free PR comes in. PR is of course short for Public Relations and was the remit of large corporations, but has now become a valuable tool for gaining public recognition of your business and products as well as building your image.

In many ways it’s the best form of advertising, because it doesn’t use sales techniques that customers are suspicious of, instead it promotes a positive message about your business that can develop customer loyalty and encourage new customers to find out more about your services or products.

You can hire a PR company to do all this for you, but that’s not cheap, so why not do it yourself. The media have to fill their papers and their broadcasts with content every day. The key is to make it interesting and have a human interest angle, not just the history of your company or latest product.

For our full members we have a comprehensive write-up on getting free PR (btw if you are a full member you also get access to business partners, mentors and business angels investors) – How to get free PR

2. Make marketing work

Marketing is the overall term for PR, advertising, branding, pricing and identifying the products that your customers want. It therefore looks at the big picture. Each business should have a marketing plan, which pulls all this together and makes sure that you have not missed an important step that will grow your business.

The main key though in making marketing work is to segment your market into bite size pieces. That way you can get your messages tailored exactly right for your potential customer. I wrote a blog on that which may help – How to market smarter

If you’re thinking of writing a marketing plan for your business, you may be interested in a deal we put together with Palo Alto to get a free copy of Marketing Plan Pro software with each copy of Business Plan Pro bought from them, you can see more here – Sales and marketing plan

3. Using a web site to generate new business

Nearly every business has a web site nowadays and if you haven’t you really must get one, it isn’t expensive and I can’t think of any business that can do without it. The first thing will be finding a domain name that meets your business needs.

Ideally the domain name would contain the key words that people will search to find your product or service, such as “bestsheds” or “berkshireaccountants”. It doesn’t have to be your company name.

Using your company name is also okay and allows you to keep your products and services unrestricted by the web site name, but the site will be harder to find on search engines for your products, so you will need to do more work on its visibility. If someone already knows your business name it will come up, but you want to be found by people who don’t know you and are searching for what you can provide.

There are plenty of very inexpensive web site packages around. Choose one that allows you to easily make changes to it, because the worst thing is seeing a site that hasn’t been updated for 2 years. Have several new items, testimonials or articles that show that it is up-to-date.

If possible get a local web designer to produce the site, again not too expensive an option. Pick one whose work is attractive to you. He can help you optimise it so it can be found on search engines like Google.

Don’t get sucked in though by all those emails from companies wanting to provide SEO (search engine optimisation). If you can afford it pick a well trusted digital marketing business, but it won’t be cheap. You can do it yourself, have a look at Perfecting a business web site .

4. Don’t use a free email address

Using gmail, hotmail or any of the free email addresses looks amateur if you are running a business. It’s okay for private use, but when you are trying to show that your business is worth buying from or investing in, then it looks shoddy.

If you already have a domain name, adding email on to it is cheap. If you haven’t a domain name for your business, get one. Then use that for email.

Put your name, contact details and a sentence saying what your business does at the bottom of your mails (as a “signature”).

5. Communicate and Network

If you have a website, offer a free incentive (such as a downloadable useful information sheet) and keep in touch with those people (make sure they have ticked a box to allow you to keep in touch).

Regularly contact existing and old customers, with special deals or just helpful information. It’s easier & cheaper than finding brand new customers.

Not everyone is comfortable with the concept of networking. It’s been over used as a term, but has been around for hundreds of years. It needn’t be hard or daunting. Just as computers talk to one another over a network and spread messages, so can us humans. The idea is that your message will pass from one person to another. A network should be more than just a list of people you talk to. It should work for you.

Thought of that way, find rememberable messages and sound-bites that you can give people you meet about your business that may cause them to mention it to someone else. On Company Partners for instance, I talk about it being like a “dating site”.

Depending on your industry and market, there will be opportunities to pass these messages on to either customers themselves, or to people who meet and influence your customers. There are thousands of organised events, choose one that best fits your market and give it a go.

Networking can also find you partners to collaborate with and ideas to try.

The old adage of invent a better mousetrap and the world will beat a path to your door, doesn’t work any more. You’ve got to tell the world about your mousetrap and show them how to get to your door.

 

Can Olympics inspire new start-ups?

Business revolutionI was lucky enough to go to the dress rehearsal of the Olympic Games opening ceremony and was hugely impressed by the hard work, energy and enthusiasm of the volunteer dancers and actors.

When the full version of the opening ceremony was shown on Friday the overall story became clearer. Much of the ceremony was celebrating the industry and innovation that Britain has displayed over the years. From the Industrial Revolution to Tim Berners-Lee and the world-wide web.

I was left wondering how many of the passionate volunteers and cheering audience would take up the mantle of our industrious and inventive predecessors?

There is no lack of enthusiasm for the use of social networking and technology, but the effort of developing the tools that make it work and starting the businesses that employ workers to drive the economy seems restricted to a few small pockets of activity.

There must be a way of capturing the vigour that was displayed on Friday night. It showed that if someone is enthused then they will put their soul into making what they are doing a success. Danny Boyle and the Olympics provided that inspiration, what can we do to inspire a generation to create products, services and businesses that generates wealth and full employment once again?

To a certain extent, youth is jaded by business, the banks and ever revealing scandals of top director’s greed. Yet there are thousands of small, well run and ethical companies out there, giving their founders a satisfying and decent living.

We need more publicity on these owner run businesses and the fulfilling life that can be had, than the continued bleak exposure of banks and big business wrongs.

 

Make IT compulsory – get more start-ups.

Young high-tech start-up businessesI must admit this blog sounds a bit as though I’m standing on a soap-box, but a recent comment by Google’s chairman, Eric Schmidt, rang true with me. He said:

“I was flabbergasted to learn that today computer science isn’t even taught as standard in UK schools,” he said. “Your IT curriculum focuses on teaching how to use software, but gives no insight into how it’s made.”

Yes I thought, he’s right. We teach how to use software, not how to make it.

This made me think, would teaching Information Technology as standard make a difference to our ability to innovate in a high-tech world?

Innovation has always driven the economy. Just look back to the Industrial Revolution and the inventions that abounded, they were that time’s high-tech.

Today’s innovation tends to centre on software, electronics and biotech, all of which require not just a grasp, but actually a fairly good understanding of the principals behind these technologies. The sort of understanding that can then be used to develop new innovative businesses.

However, schools have increasingly concentrated on “soft” subjects and reduced the time spent on what is thought to be more difficult areas such as science, maths & technology.

I know that we are short of science and maths teachers and the need to meet higher and higher pass rates every year means that schools concentrate on courses that are not as exacting.

It doesn’t have to be this way; though it will require government willpower to change.

We’ve seen an enthusiasm for entrepreneurial activity, with programmes like Dragon’s Den and The Apprentice. Nearly all young people have a passion for the uses of technology, with Facebook and iPhone Apps.

So why not put a fresh emphasis on learning why an iPhone works and how to programme an application like Facebook, not just how to use them. Then we may be producing the future innovative entrepreneurs that the economy demands.

 

Identifying successful businesses

Identifying a successful business start-up
Every experienced Investor develops a sixth sense when looking at potential business opportunities, but even so it can sometimes be difficult to put your finger on what is the key ingredient in making a new venture successful.

Over the years of working with start-ups I’ve seen companies grow rapidly and then fall away, great businesses that not only grew but sustained their position and of course those that never made it.

In all of the great ventures they got 3 basic elements right and I’ve tried to show those essentials on our model of Start-up Success above.

Much of it is common sense, but like many simple things it can often be forgotten and the whole process of identifying a good high growth business made over complicated.

Firstly, yes you guessed it, is the founders of the venture. It’s said many times that the management team is key, but why? It is because they provide the drive, ambition and ultimate quality of the business.

Not only must they have the will to succeed but also the competence to implement the business successfully. The idea is important, but the excellence of implementation of the idea is critical.

Great entrepreneurs have a vision of what they want to achieve based on an insight to a market opportunity and the capability to pull together the resources to address it.

When you as an Investor look at prospects, or perhaps if you are an entrepreneur thinking through options for starting a business, it’s worth remembering the 3 key ingredients and how they interact for sustainable success.

 

Who needs a business partner?

Spot Bill GatesThere’s a common misconception of the typical entrepreneur being a charismatic individual business person, not needing or wanting a partner’s help in driving forward his all conquering venture.

Think Richard Branson, Bill Gates, or the latest film idol, Mark Zuckerberg of Facebook fame.

Yes they were the front men and there’s no doubt that they steered the ship, but each started their businesses with partners that had complimentary skills.

Branson always had a partner for each business he began. In the earliest years it was Jonny Gems (Student magazine), then Nik Powell (Student magazine and Virgin) adding Simon Draper (Virgin) for his music knowledge. These were share holding partners, not employees, although Branson certainly surrounded himself with a very capable workforce.

Bill Gates and Paul Allen started Microsoft together, while Zuckerberg’s Facebook was founded with his original partner Eduardo Saverin (now the subject of a film – The Social Network).

There must be exceptions, anyone aware of one; I’d be interested to know? As far as I can find out, almost every successful company had a partner helping it to grow.

Why? Well, it is almost impossible for one person to have all the capabilities and characteristics needed to develop a business. One may have the technical skills, the other the sales or business knowledge.

Between them they start to handle the PR and soon it’s clear that one is more comfortable in that environment and they agree that he will act as the front man.

Taking on the world yourself, with no one to bounce ideas off and to give mutual motivation is quite daunting. A strong team of employees will help fill out any skills or experience that the business needs and a mentor can be very helpful in acting as a sounding board, but there’s nothing as good as having a partner with the same skin and commitment in the game as you.

Of course choosing a partner must be done with open eyes and it is absolutely important to get the right legal and partnership agreements in place. See my guide to healthy partnerships: Business Partnerships .

It was to provide a “dating site” for people to find business partners that we started Company Partners, so I guess I am a bit prejudiced in favour of not going it alone. But it’s a hard old world by yourself.