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Being an entrepreneur and working on your first business can be lonely, especially in the early years, so how do you stay focused and on track to achieving your goal of success?
In my experience what most people don’t realise when they give up their job to work on their business full time is that they are losing a network around them. While you might have a spouse or partner cheering you on from the side-lines or working with you, loneliness is one of the biggest issues many entrepreneurs face because the time they need to dedicate to the business leaves little time for other people.
It’s also tempting to start comparing yourself with others, especially those on social media platforms – something which should be avoided. Every business and every business owner’s journey are different.
Where to start
Having the right team of advisors around you at the beginning is an investment in your business and it’s important for many reasons. They will have already been on the journey with different businesses and they understand exactly what you are going to need at the different stages in the life cycle. Setting up a business in the right way can help avoid serious issues further down the line.
First thing to get right is to structure the business in the most effective way so that tax savings can be optimised such as R&D credits in the early years and in the longer-term capital gains tax allowances when exiting the business.
The business needs to be compliant, and it needs to build systems and processes which can be scaled up and brought in-house over time. Day-to-day accounts, payroll and cashflow forecasts can be done virtually, making use of AI accounting software to save time, office space and money especially at the beginning, when you have little time and as the business grows with more suppliers and staff to pay.
Whilst succession planning might seem premature at this early stage it is important to build a business that isn’t overly reliant on one individual which in the longer term, will make it more attractive to investors and ultimately to buyers.
Cashflow
We all know cashflow is king, but you need to have plans in place to get your business to the stage where it is generating sufficient income to expand or to hit milestones for the next round of funding.
Money isn’t cheap anymore and it’s more challenging and expensive to borrow money. We have also seen a slowing down in private equity investment for several reasons but be mindful that this caution may continue as a general election here in the UK gets closer.
Some entrepreneurs just aren’t as business minded as they need to be. They haven’t thought through all the aspects of running a business and discipline is needed to keep a control on costs along with the systems and processes to manage it. In my experience, some entrepreneurs find some of the details of running a business a bit boring – they like coming up with the big idea, but the key to success often lies in paying attention to the detail.
Future proofing
And this is the key point really – none of us really know what is around the corner. You may know your own strengths but it’s important to recognise your weaknesses and collaborate with like-minded advisors who you can bounce ideas off. Good advisors will be there to help smooth out the bumps in the road on your business journey. The key is finding someone who you like and can build a good relationship with and who is interested in your business success.
I’m always interested to meet new entrepreneurs, especially those who can explain their business succinctly as I know they have already done a lot of the hard work to understand there is a gap in the market and what their business can deliver to fill it. Whilst I can’t run the business for them, I can be there to fill in the gaps and to identify the blind spots that will inevitably come up.
