Many of us dream of going it alone and starting our own business – here are four top tips from those who have done just that.
Find a gap in the market
Jim Duffy, chief executive of Entrepreneurial Spark, says: “Those who create a product or service to address a gap in the market often go on to great success, as long as they test the idea further with the market and validate that there is a need for what they want to offer. Just because you want something doesn’t mean other people do.”
He adds: “Other big issues such as price point and distribution also come into it, which is why market testing is so important. It’s important that the numbers stack up, so people must be prepared to pay enough for your product or service for you to make a healthy profit. The ideas we love the best don’t just improve existing products by maybe 10 per cent, they completely revolutionise a market.
“Henry Ford is a great example of an innovative entrepreneur. When he launched the Ford Model T car in 1908, he famously said: ‘If I had asked people what they wanted, they would have said faster horses.’ We’re looking for innovative start-ups and scaleups that are disruptive and offer new ways of doing things that people genuinely want to buy.”
Don’t be scared
Charles Henderson, founder and project director at Edinburgh-based environmental consultant Climate Futures, says: “If you’ve got the right idea and you hit the ground running with the right team behind you, nothing should stop you.”
Be prepared to fail
“We encourage entrepreneurs to fail fast and fail cheap if the idea isn’t right,” says Duffy. “As Steve Jobs said: ‘Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.’”
Duffy adds: “We often find entrepreneurs pivot after the market testing, either to a completely new idea or an improvement on the original. If you’re completely happy with your product or service when it comes to market, you have probably launched it too late. We teach entrepreneurs to develop a minimum viable product that lets them check that people will pay for what they want to offer.
“Funding platforms such as Kickstarter can be a great way to achieve early sales or pre-production – people can pre-order your product before you’ve spent a penny on production, giving you valuable cash flow and guaranteeing sales of your first run of stock.”
Have a deadline
Tim Barlow, founder and managing director of Edinburgh-based digital marketing agency Attacat, says: “The real danger in setting up a business is just allowing it to roll. Being forced to make decisions gets you much further much quicker.”