"Nobody talks of entrepreneurship as survival, but that's exactly what it is and what nurtures creative thinking."
Dame Anita Roddick, 1942–2007
British founder of The Body Shop, a British cosmetics company producing and retailing beauty products that does not use ingredients tested on animals and promotes fair trade with developing countries.
Anyone can start a business, but very few people can start a profitable business. The key to success during start up is to manage your cash flow: regular income enables you to grow the business at a realistic rate, particularly if you're relying on your own money.
Many suppliers are willing to help entrepreneurs by deferring payments. Should the business take off, they expect continuing business in return. This is especially true of suppliers who can give their time rather than products, such as creative agencies and designers.
Insist that your invoices are paid on time – and pay your own bills on time too.
"A bank is a place that will lend you money if you can prove that you don't need it."
Bob Hope, 1903–2003
American comedian and actor renowned for his work with the US Armed Forces and numerous tours entertaining military personnel, as well as his humanitarian activities.
When you're starting a venture and income is at its lowest, you need to decide very carefully which products and services to spend your own money on. Use free open source software such as OpenOffice.org, a fully functioning suite of word-processing and spreadsheet tools, and visit www.freecycle.org, a giveaway network for almost anything, including secondhand computers and printers.
Use business card printing websites such as www.vistaprint.co.uk, which provides free services in order to sell you further opportunities when your business takes off.
Rather than taking on expensive employees, outsource work to trusted suppliers.
Another suggestion is to work from home to save expensive office costs.
"Perhaps the very best question that you can memorize and repeat, over and over, is, 'what is the most valuable use of my time right now?'"
Brian Tracy, 1944–
Canadian self-help author who focuses on entrepreneurs and sales professionals, offering talks and seminars include leadership, managerial effectiveness and business strategy.
Take time to work on the development of your whole business, not just running it day to day.
Using your time efficiently is the difference between making yourself busy and running an effective business.
If you are continually doing jobs that need to be done in order to satisfy your customers, then you won't grow. This is working in the business – you need to work on your business and manage it.
Create a clear strategy forthe promotion of the business as a whole brand, rather than spending all your time on its products and services.
"It has been my observation that most people get ahead during the time that others waste time."
Henry Ford, 1863–1947
American founder of the Ford Motor Company, developer of assembly lines and mass production.
As an entrepreneur you need to organize time, people, products, logistics, manufacturing, design and finance. If you can organize yourself, then you certainly have the ability to organize a business.
Getting to meetings on time, paying bills, closing sales and writing letters – you learn these skills throughout your life.
If you can't organize effectively you won't succeed in business. You have to keep on top of those things that need to be done to move your ideas forward and make things happen.
Don't prevaricate, go ahead and do it.
"Repetition makes reputation and reputation makes customers."
Elizabeth Arden, 1878–1966
Canadian businesswoman who founded an international cosmetics business, and was also a major player in American horse racing.
Ensure that suppliers provide you with the best possible deal. Be creative when asking for something extra. Allow your suppliers to show how valued you are and in return you will maintain your business with them.
Always compare at least three different suppliers by asking for written quotations and references. Take the time to follow up on references to understand who are the best partners for your business.
Ask for return on investment documentation (ROI) as well – detailing the financial benefits you will gain from choosing that supplier. This not only gives the supplier a degree of credibility, but helps you to justify the purchase you intend to make.
Make suppliers work for your business.
"I think this is also a great time to invest in private equity, helping companies grow from the ground up."
Jim Rogers, 1942–
American investor and financial commentator, author of Investment Biker and Adventure Capitalist, and co-founder of the Quantum Fund with George Soros.
In times of financial difficulty, use the equity you have built up as collateral in the business.
Don't be precious with your first business: the key is to get it going and move it forward. If you've done it once then you can definitely do it again.
First-time entrepreneurs exit their first business with, on average, 7 per cent of the company they founded.
It's better to own 10 per cent of a £10m company than 100 per cent of a £10,000 company. Bill Gates owns only 8 per cent of the common stock of Microsoft and still remains the largest individual shareholder.
"Business is other people's money."
Delphine de Girardin, 1804–55
French author, who wrote plays and novels under the name of Vicomte Delaunay.
Don't use up all of your own financial reserves just in case things go wrong. You may need a fall-back strategy.
There are hundreds of investment groups wanting to speak to entrepreneurs. These include regional investment firms, business angels and government agencies. Approach as many as possible with a solid business plan to see if your idea is worth investing in.
You may be fortunate enough to be offered a substantial amount of start-up capital and then your business will be off and running. At the very least, you gain another perspective on your idea.
"Investors don't like uncertainty."
Kenneth Lay, 1942–2006
American businessman, CEO and chairman of Enron Corporation, best known for his role in the widely reported accounting fraud scandal that led to the company's downfall.
The main questions an investor will ask when thinking about an opportunity investment are:
Is there a market need for this product or service? Prove this with research and market data.
Is the product or service commercially scalable? Provide manufacturing or sales data to show how costs diminish with increasing volume in a growth market.
Do you have access to a good management team? Explain how you do.
Are you willing to risk your own finances? If so, then you have taken the risk out of the proposition for the investor.
Are you the right person to make it happen? This is the single most important factor. Are you investor ready?
"Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing."
Helen Keller, 1880–1968
American author and campaigner for women's suffrage and workers' rights, the first deaf-blind person to graduate from college with a Bachelor of Arts degree and awarded the Presidential Medal of Freedom, one of the US's highest civilian honours.
Limit the risk you ask people to take when investing time and money in you and your products.
Are your goals achievable? Once you have motivated yourself to think they are, then you're prepared to de-risk your ideas for your family, bank, suppliers and customers.
The risk may not only revolve around cost. It could concern confidence in the longevity of the product, consistency of supply or market conditions. Find out exactly what the obstacles are and overcome them so you can move ahead and gain stakeholder involvement.
People don't like to take risks. It's your task to convince them that your proposition has managed and acceptable levels of risk.
"Goodwill is the one and only asset that competition cannot undersell or destroy."
Ludwig Börne, 1786–1837
German satirist and political writer, editor of various liberal newspapers.
Goodwill is a financial term used to describe the intrinsic value of a company that is in addition to its assets – its reputation, if you like.
The goodwill of a business represents the loyalty of both its customers and its suppliers. When investors buy or sell a business, they are not just buying or selling a single piece of land, or a building or the stock, they are also buying goodwill in the form of future order books, repeat purchases, client lists and supplier orders.
Do everything to maintain and grow goodwill between you and your stakeholders.