A Practical Suggestion for Start Up Britain

As a follow up to my rant of yesterday, I thought I would jot down my own personal thoughts about practical help for start-ups.

Let us first look at a few home-truths:

1. Start-ups need some money. Not always a great deal, as I know from my own experiences, but they will need some. Even if this does not come in the form of direct funding, it might come as a result of the founder not drawing a salary for 18 months, ploughing whatever revenue is generated back into the business.

Banks, despite their rhetoric, are scared of lending money to start-ups with no proven track record. If you have a property, with some spare equity, then you are in with a chance. Again, from my experience, the banks will take notice if they can secure funding against your home, and even then, they still prefer you to stump up half the required capital first.

2. Individuals interested in starting up a business do not have all the skills they need to get it off the gorund, nor do they have the financial wherewithal to contract in external assistance. Yes, they can get business advice from a wide variety of sources, but it is practical help that small businesses need from the outset.

Many small businesses do not have a clue what a business plan is, have no idea how to go through cash flow projections or appreciate just how difficult it can be to get started. These are not just documents that you submit to a bank in the vain hope that they will shower you with cash as a result. They are a detailed overview of what you, as a new business, would like to achieve and how you aim to go about it.

The home-truths out the way, let me outline what would have helped my business when I started it, two years ago, without a penny to my name:

A co-operative of like-minded individuals, who share skills and expertise.

I have a digital marketing company, a tool hire business and a (soon to be launched) internet dating website!

When I started, I was desperate for people to run some telesales campaigns to introduce our products and services, but I couldn't afford to outsource this.

I wanted leaflet distributors.

I was lucky to have my son, a graduate multi-media designer, available to build my website free of charge. Other start-ups don't have this resource. Even fewer have any idea of how to go about actually marketing their new business.

Sales people, interested in getting in front of potential customers, would have been the icing on the cake.

These are practical aspects of my business that I needed in order to grow, but aspects that were all beyond my financial reach.  So, where to get that help?

I see the co-operative system working in the following way:

Someone in my area might want to start a commercial cleaning business, but cannot afford to have a website or leaflets designed, but they have the skills and equipment ready to get started.

I provide the design skills free of charge, provided I can advertise my services at the same time (on their website and leaflets), as the cleaning company's clients could well be potential clients for me.

I need some telesales done. A new start-up may be offering business services, and telesales may be one of the services they provide. They offer to run a campaign for me free of charge, and I agree to pay them a commission on any generated business. A risk, but the new start-up has a bona-fide client (my business), and gets their name out in front of other potential clients. I provide testimonials that they can use to help gain other business.

This is not rocket science, more a case of "You scratch my back, I'll scratch yours". It is a network of young business owners who all need practical help, not just words. A referral scheme, designed to generate money for the participants on the StartUp Britain website is not the answer. NatWest do something similar - "you are a valued customer, so join our Advantage Gold Scheme. You pay for this monthly, but look at the rewards you get!". I was an Advantage Gold customer and never took advantage of the so-called perks. It is a marketing ploy - pure and simple!

So, is StartUp Britain a marketing scheme dressed scantily as the Start-Up's Saviour, aimed at generating income for its contributors? Start-ups need to get customers, generate sustainable income and keep costs to an absolute minimum. Advocating the spending of money based upon discounts offered is not, in my opinion, helpful. 

Start-Ups - don't get sucked in.  Find ways to work together, help each other gain customers in order to build up referrals and a reputation. Think hard about what you want to achieve, how much money you have and then share ideas and skills with other start-ups, and let's combine to get our collective businesses off the ground.