Our panel of experts will be giving advice to would-be millionaires. Send your
questions to career@thetimes.co.uk.
Questions and answers are at the bottom of the page.
Would-be millionaires without access to an inheritance have two main paths
open to them: go into the City and wait for the bonuses to land or start a
wildly successful business. Both paths require hard work, but with four
million enterprises in the UK and somewhat fewer investment banks, it may be
easier to forgo the financial security of employment for life on the
what-do-I-have-to-lose side of the equation.
This is what the experts have to say:
1. Think again. Do you really want a million pounds? “For a lot of
people, a successful business is one that allows them work-life balance and
a decent lifestyle,” says Jeremy Hand.
2. Assess your motives. “Far too many people think that
[entrepreneurship] is about money when it’s really about building a good
business,” Nigel Brown says. “Whenever you want to start a company, do it
with passion,” Stefan Glaenzer says. This enterprise will become your life;
you’d better like it.
3. Find out more. Attending a workshop or training session run by
experienced entrepreneurs will give you a sense of the reality of running a
business, Robert Tull says.
4. Keep it private. At least while you get things going. “Don’t focus
on convincing other people or external investors,” Glaenzer says. “Just work
on your idea... in the evening or at night... so that you have more than
just an idea.”
5. Start small. How much funding you need to begin will depend on your
business; generally it’s less than you think, Brown says. Banks, family and
friends are all potential sources of support, Hand says. “As a young
entrepreneur you’re not likely to find an institutional angel investor so
look for one in your current network.”
6. Not everyone’s a critic. But you need one. “Your friends and
family... will say you’ll be great, but what you need is someone who will
ask ‘Is that a viable idea? Do the figures show that you will make money
from it?’,” Tull says.
7. Get your structure right. Is it 50-50 between you and your
co-founder? What will you do if someone else gets equity? “You have to think
about ownership right from the start,” Brown says. “Assume that you will be
wildly successful. If you don’t, you will be caught out if you are.”
8. Plan. “You need a clear idea of where you want to take the
business,” Hand says. Once you know where you want to go, reverse
engineering can help you to get there.
9. Bring on the big guns. Or not. External investors mean more cash but
less control of your ideas and your business; think hard about which you
really want. “Relying too much on other people is a bad idea,” Brown says.
“You have to make your own decisions.” If you decide to go with an investor,
find one that offers advice and experience rather than simply money,
Glaenzer says. “And if one comes to you with too big a contract, be
suspicious.”
10. Cash in or keep on? At some point you may be offered the chance to
sell some or all of your enterprise. This might finally net you your £1
million, but think before you sell up, Brown says. “It’s difficult to have a
good idea... if you sell the business you have only the money; you’ve lost
your power. If you keep the business you are still a millionaire, you just
don’t have it in the bank. You have it in a better place, where you can
continue to build and develop it.”
Meet the experts
Jeremy Hand is vice-chairman of the British Private Equity and Venture Capital
Association (www.bvca.co.uk).
Robert Tull is a senior enterprise awareness manager for Business Link in the
East of England (www.businesslink.gov.uk).
Nigel Brown is the founder of N W Brown Group, which includes the Great
Eastern Investment Forum, a business angels organisation (www.geif.co.uk).
Stefan Glaenzer is the serial entrepreneur and angel investor who backed
Last.fm, an internet radio station.
Tull, Brown and Glaenzer will be answering readers’ questions exclusively for
Times Online. Send your questions to career@thetimes.co.uk.
Questions and answers will appear on this page over the next few days.
Q&As:
Q: I set up a private investigation company in 2005. I first
worked as a postman in order to give me time in the afternoons and evenings
to start the business. In November 2006 I left the Post Office and started
on the business full time. So far everything has gone really well and the
hard work and early mornings have paid off. We now have a strong, happy
customer base of solicitors and commercial clients. My question is this: we
currently work from home and have the opportunity to move into an office for
£65 pw. Do you think the benefits of having an office justify the added
expense? Darren Glover, Oxford
A: Draw up a pros and cons list on one page of A4 on the advantages and
disadvantages of moving. I would have thought that having an office in your
line of work, (but I'm no expert here), could be helpful to all the people
you need to see. Also will it look more professional having a business
address, and is separating your office from home better for the security of
you and your team. RT
Q: I have know I have a great idea (www.nav-poi.com)
I’m not sure what to do, I have loads of ideas for the company/brand and
feel it has a potential to net me my first million. The problem is there are
a number of things I think it need to get it off of the ground. I need
contacts (sales, legal advice and marketing); capital (unsure of exact
amount) and marketing knowledge. After trying many different routes I am
currently considering the path of finding angel investors as I really need
someone to be able to help me establish contacts, while providing some
capital and a wealth of knowledge. I want to get the business off the ground
as fast as possible before anyone else has a chance to get in but I want to
be sure it is done correctly. Is this the right move? I look forward to your
response. Peter Grillet
A: We have lots of inventors coming to our Starting a Business
Workshops in the East of England. They need to keep their feet on the ground
with a viable and sustainable business plan. Forgive me but some do get
carried away with the brilliant technology or new idea rather than focus on
the more mundane best business practice. You have already listed the raft of
advice you need. Call your local Business Link and talk to an adviser and
get some Starting a Business advice, or phone 08457 171615 in the East. RT
Q: Five years ago I had an idea, an easy way to carry skis. I
have turned it into a product, the "Skiloop" and have formed a
small start-up company. The Skiloop sells easily when it comes into contact
with the public at retail shows, etc. Approx 20,000 sold so far with no
complaints - but I cannot make an impression on the trade, despite
exhibiting at major trade events where interest is shown, I have not been
able to secure a European or US distributor. There does seem to be a
prevailing attitude among the trade of "what do the British know about
skiing". Any ideas? Paul Toleman
A: Paul Sorry to hear that the trade are not interested in Skiloop, but
at least the customers are. 20,000 units sounds good. Not sure how long you
have been in business, as you call yourself a start-up company so have you
been going over 3 years, and so how many units sold in last year? What is
the market for this product in UK, Europe, USA? So some market research
needed on numbers and competitors. It is unfortunate but the UK is not the
natural place that most people think of for skiing inventions. Especially
those in foreign parts living in or near mountains. Perhaps the reason for
distributors not taking this product on is that they consider it a poor
business proposition. Currently it sounds like you do everything showing at
exhibitions, events etc. Maybe your margins are tight and you cannot give
the distributors the mark-up that they need, and are used to, on other
products they carry. Look at these margins again to see if increased
production and sales equals reduced costs, that can be passed onto the
distributor to make a more attractive offer, and some more profit for you.
Finally, what chances of you gaining some sponsorship? The British Ski club
or the young British stars should be using your skiloop and getting pictured
doing so. Lastly, contact your local Business Link and get some advice.
Regards. RT
A: focus on finding the right door-opener for the trade - maybe some
grey-haired guy with years of experience in this industry. SG
Q: Is there any group or organisation that specialises in
funding for women? Please don't say Aurora as I can't get a word of sense
out of them! Thanks in advance. Lynne McCallum
A: Varies by English region. Phone or e-mail your local Business Link
and ask them to do a grant search in your area. Some areas such as Eastern
England have organisations especially for women and helping them start up in
business. Get their support in your endeavours. RT
Q: I’m a young fundraiser; I’m currently supporting the
Children With AIDS Charity. I launched The Make A Child Smile Appeal in
2004. I really do hope that I’ll be able to raise over one million pounds
for the Children With AIDS Charity! We’ve received signed items from J K
Rowling, Bill Gates, Rupert Murdoch and the Archbishop of Canterbury. I’m
currently trying to convert The Make A Child Smile Appeal into a well known
brand. I’d love to hear some of your fundraising ideas. Richard
Barker
A: Ah Fundraising and charities. There is no easy answer here or my
favoured charities would be doing better. Many people/givers have charity
fatigue, as they are asked for money from different charities all the time.
The larger charities have got more and more professional in their approaches
to potential donors. New ideas are quickly copied, and it's hard to think up
new ones constantly. Hence the numerous job vacancies for fundraisers in the
charity ads. Still, you do not want to hear this obvious stuff. Well done
for getting these high profile people on board, so the proposition must be
good. At the weekend at the British Grand Prix, I liked the idea on the Red
Bull car of them selling thousands of tiny ad slots on the car for people
top sponsor. Maybe something along these lines. Good Luck. RT
Q: I started my business in IT-related products in July 2002.
I have a website. I did not take any help from banks as they wanted a rigid
way of planning and money in front. I take a low salary, I am 62 years now
and want to move to the second phase. I did build up some capital in the
last 5 years for business to expand; I still operate from home as office.
Most of the business is done via email, fax, phone on day-to-day basis. I
have an established record with distributors. I need a few more good
business accounts where I can supply IT products. Please suggest what I can
do further to achieve success. Name withheld
A: An interesting case for this 5-year-old company, still in business
and doing OK. As you have a good track record with existing customers you
probably rightly are using them to gain new accounts. However, how many can
you cope with in your present state? Will you need to move to premises. It
sounds, from your question that “a few more accounts” will be enough to
satisfy you. Would it be unfair to call you a lifestyle business, like many
others that Businesss Link advise? I am not sure what you mean by second
phase. My suggestion is to phone you local Business Link and see a business
adviser to plan out your next move to achieve further success. You mention
early on that you did not like rigid planning. Well I think it's proven that
a business plan is a vital tool for all successful businesses. When I ran my
own small company, I used my biz plan as a living breathing document and
refreshed it continually. Finally we are of a similar age so I can empathise
with you and your business so good luck with your chat with a Business Link
adviser. RT
