Too Long? Here’s the key takeaways
- Evaluate the reasons that are pushing you to be an entrepreneur
- Know your strengths and limits
- Check the market for companies to buy
- Favour security and give intrapreneurship a go
- Choose a franchise and go with a business that is already established
Know your strengths and limits
Building your own business has never been so popular. According to the Companies House, in 2018 there were 11,864 tech startups in the UK, up 14 per cent from the previous year. This is the highest number of startup creations for a given year so far. More and more entrepreneurs are younger, 35% of them are under 45. There is a renewal of interest that sprouts from various factors and that is far from being a fad. Knowing the difficulties of an entrepreneur's life, you must really ponder your project before running headlong into its launch.
Today as a symbol of success, building a business is not at all relaxing and being the head of a company requires a lot which could lead to making sacrifices that squander the talents that brought you to start it in the first place. Being an algorithm genie doesn’t mean that you will be good at management and knocking about artificial intelligence doesn’t mean that you are good at making business plans.
Some things you can learn, yet others, like charisma, the appetite for risk, and effort, you can’t. Really evaluate your skills and what could pose a problem if you were to build your own business. Know how to surround yourself with people who can teach you or make up for skills you don’t have so that you aren’t squandering your talent and exhausting yourself for the skills you simply don’t have.
"Being a genie in one area isn’t enough to be a super boss, make sure that you have what it takes to start."
Really know how motivated you are
Your business is your idea, your baby, but being a CEO is also being apt to accept criticisms, analysis, and outside recommendations about your product. It’s knowing how to accept debates and discussions with partners, investors, or colleagues, and being able to spend a couple hours doing so. Don’t let all this questioning make you completely reconsider your project. Your confidence must be solid at the beginning, but so should your self-esteem and your idea. You have to be in a strong enough position to adjust the path of your project without throwing in the towel completely.
"Being challenged is part of the venture, be sure that you can take it."
Creating a business without leaving your employer: intrapreneurship
There is no need to create a startup in order to blossom in developing a project. A lot of large companies understood that linear careers and mapped out paths aren’t what’s best for many workers. l’Oreal has allowed some employees to get immersed for a month or two in startups and other large companies have created intrapreneurship and support programmes to help their employees get further ahead with their projects. Of course, most of these projects are linked to the company itself, but it’s good to try it out in a cocoon before launching, right?
"Developing a project while remaining at your old job and benefiting from group support and personalised coaching is tempting, no?"
Create something new or build off something else?
Many companies today are waiting for a buyer in the UK. So, this might not be the most appealing option when compared to creating your own business that succeeds brilliantly in biotechnology, but there are plenty of very rich sectors that are worth betting on, especially if one company is calling your name.
In some business activities, like trade or local services, buying a company allows for a faster start and with better conditions. It is a faster economic process than creating a business and the buyer immediately benefits from a working model, a trained staff, client base, and revenue generated by the business. Obtaining bank financing is also easier than for a new business because the banks can rely on something concrete: the last three assessments and balance sheets of the company.
However, buying a company is more expensive than building your own. Your personal investment will be higher, even if getting financing is easier. It is also more complex because you must be professional and ready to lead from the moment you become the owner. Finally, human relations are a lot harder than in your own startup. Employee's work contracts will carry over, and the employees will have to adapt to the change (direction strategy, etc.). To know more, read the guide from entrepreneur.com
"Faster and surer, but also more expensive and complex, buying a company could be a good solution for a seasoned entrepreneur."
What about a franchise?
Room for less error than an independent company, the notoriety of a known brand, a network that will support you in case of doubts/problems/questions, etc., a franchise has quite a few tools in its bag. This system, that rests on the idea of the collaboration of two companies legally and financially independent of each other, allows the franchisee to obtain, with a financial contribution from the franchiser (entrance fee, licence fee, royalties, margin on products):
- Right to use the logo, trademark, and know-how
- Right to commercialise products or services, conform to the directives laid out in the contract, all while benefiting from business or technical assistance
However, even if the business is flourishing elsewhere, do careful market research to evaluate the potential of the company in the area you choose, and don’t explicitly trust the data of the franchiser. Account for a very large initial investment since you have to satisfy the requirements of the franchiser concerning establishing the location, its layout and pay the entrance fees. If total independence is what you are aiming for, take a different path because the conditions of this relationship are to accept the rules already in place by the franchiser. To know more, read the guide on franchise basics from entrepreneur.com
"Surfing on an already established business is a good idea if you are open enough to sign up for what a franchise entails."
