Here’s the good news. Eighty new companies launch every hour in the UK. Enterprise and entrepreneurialism should be and are at the heart of the UK economy. The bad news is that if you fast-forward five years, 40% of those companies will have already disappeared. The first few years of a company’s life are lessons in survival. The question is, how can you learn the lessons without the expense of your business?
Serial entrepreneur, Edward Relf is currently in the third year of his latest start-up, Laundrapp, which has experienced explosive growth since its inception in 2015. He shares his learnings.
Hiring the Right Talent
There is no doubt that in any business numbers are important, however it’s people who can truly make or break a business. Hiring is one of the most important decisions an entrepreneur will make. Many start-ups take the easy route with bums on seats to grow fast. This is a trap which must be avoided. Keeping a cool head and hiring the right person for the right role is vital. Don’t be fooled into thinking that doubling team size will mean doubling in speed, or efficiency. A bigger headcount means more processes, more management and can often initially slow rather than speed productivity. Make your people choices wisely as it is experience, not hands that makes a great business.
Keeping Great Staff
Peter Drucker says, “culture eats strategy for breakfast” and in growing a company, owners should remember that people work for people, not businesses. Start-ups must think about their culture, understand their values and behave in accordance with them. A great company culture is created by everyone, not just the CEO. Encourage the right behaviours and discourage the wrong ones and build your company culture organically.
Building the Best
Getting to a Minimal Viable Product (MVP) is often the first goal of a start-up, but all too often, time is wasted “down in the weeds” when only a basic product or offering is needed to get to market. This is where the benefits of agile development come into play. Looking back, it’s natural for a start-up to feel embarrassed about a first offering but that’s business. Reid Hoffman, LinkedIn founder, has openly admitted to finding version 1.0 of the network cringe worthy! Get it out, test and develop your product in the real world.
Be Clear on Metrics
There is nothing more true that the saying “Getting your ‘ducks in a row’. Understand the key metrics of the business model and line them up. Focus on the first metric, hit your KPIs and then move onto the next metric.
Market your Business One Step at a Time
No start-up can afford to burn through precious funds, and marketing can be a money pit. Start-ups shouldn’t jump the gun, but instead play the long game and align marketing with business metrics, and optimise to ensure any investment is working hard to generate the results requisred.
Think about how you build trust
For consumers, trust is now the second most important reason for choosing a retailer, after price. For Laundrapp, when looking after a customer’s most prized possessions, there is no margin for error. Brand trust is earned, not purchased, and therefore careful consideration must also be given to client or customer service, loyalty and recommendation. Once trust is earned, it’s like gold-dust. Start-ups should leverage this consumer trust and use it to drive referral and organic growth.
Finally failure. The most brilliant business minds in the world have failed. The reality is that market forces change and that sometimes failure is part of life. What is important however is that entrepreneurs understand the pitfalls, learn from their mistakes and are honest and realistic about the process. In so doing so, they and their businesses will become stronger.
