How to start a successful business

How to start a successful business, from idea to practice – a view from Eddie Hooker

Starting a successful business from scratch is not an easy process. It’s not just a case of thinking of an idea and running with it. To have a fighting chance of making it a success there are a myriad of decisions you need to make before you sell one product.  What follows is my experience.  It is not a ‘guide’ and is not foolproof!  But then again, no two businesses and no two individuals are ever the same…

Building and running a business is hard work! An idea is only 10% of the story, the remaining 90% is commitment and perseverance. This is a tip that applies to everything in life, not just in the business world. Don’t expect to spend much time on the golf course or take extended holidays anytime soon! It would be naïve to think that Richard Branson was the first person to think of selling records, or to start his own airline, but it was his intensive commitment to his ideas that has made him one of the most successful entrepreneurs in the world.  In the first 10 years of Hamilton Fraser I am not sure that I ever worked less than a 60 hour week.  I did client visits during the day and then returned to the office to start all over again with admin and day to day issues.  Strategy was conducted at night or during the weekends. If you’re not up for hard work then stay employed!  Trust me it’s easier!

Knowledge of your industry is key.   I’ve met numerous people over the years who have good ideas but just can’t implement them as they have limited understanding of the complexities of the market they are in.  Who are your competitors?  Who are the key figures – the movers and shakers?  Are there any regulatory requirements that you need to be aware of and also for your suppliers.  My industry, insurance, is heavily regulated and you have to do things in a certain way.  Cross the line or fail to follow the rules can result in you being shut down before you have even started!

How will you differentiate yourself from your competitors?  You need to be thinking about providing a service that is superior or that offers something unique. When I first launched Total Landlord Insurance, I understood that we needed a unique selling point as competition for this type of product was increasing. Speed of service for landlords was key. Back in the early 1990’s, arranging insurance policies was a far more long winded process than it is today, especially as there was no internet available.  We wanted to control the service standards rather than rely on the insurance companies.  We therefore created an internet style proposition without the internet!  You could ring us and we would quote and issue the policy immediately rather than the landlord having to wait days or even weeks to get the paperwork. Everyone does this now but back then it was a first!

Of course this leads onto another challenge.  You need to be able to adapt and change to the marketplace and your customers.  Just because you have always done something in a certain way does not mean that you will always be successful.  A common thing I say to my staff is that there is always someone more creative, younger, with more money coming up behind you.  If you can’t adapt then you become extinct.

The importance of planning is also often overlooked.  I don’t just mean at the start of a business. Planning is ongoing.  A successful business is not just down to how well you know your job.  For example, in my cosmetic insurance business I have met many medical practitioners that know their job extremely well,  but they can’t run a business.  They are highly competent at injecting dermal fillers but they don’t know how to find their customers or how to keep their customers after the initial treatment.  For many this is the most difficult part of setting up a business.  Fortunately these days you can download a business plan template online and fill it in and get your ideas down on paper. It gets you thinking about your expertise, who you are going to employ, what your customer base is, who your competition is, what your service proposition is and how much money you need to deliver it all.  It’s a great start in planning your successful business.

And a quick word about money and funding.  Unless you are already flush with cash, be prepared to trawl the finance market and have many doors slammed in your face.  Raising money is extremely hard and will involve you providing collateral or giving away substantial amounts of equity.  You wanted to run your own business to get away from having bosses?  Think again! Once you borrow money or find investors you will have a boss.  And a boss that will make more demands on you than you can imagine.  I’ve been involved with businesses that have sought investment through external shareholders/equity partners only to find that they can’t make any decisions or take the business in new and innovative ways.  Of course there are always the exceptions…

Business is also a numbers game. You may have stumbled on the best business idea ever but if no one knows about it then it will fall by the way side like many good ideas have done in the past.  Be prepared to bang down those doors in the early days and create as many opportunities as possible. Some will undoubtedly slam in your face but it is perseverance, hard work and dedication that really makes the difference between success and failure.   But remember: people buy people.  If you are shy and reserved and hate selling yourself, I’m afraid the road to success will be long, painful and ultimately expensive.  Be prepared to utilise social media, video, blogs and podcasts to get your message out there.  It is your personality that will make the difference and many people will buy from you because of you, rather than your competitors.  In my business, I set the culture for all of my people and ultimately how I want my business to be perceived by the buying public.  I encourage face to face meetings and sales pitches rather than hide behind an email or a telephone call.

You really need to honestly look at why you are going into business. Is it because you want to change the world? Is it because you want to make sheds load of money? Is it because you don’t like your current employer and think you can do it better? Identify the reason behind your desire to go it alone. I wanted to raise standards in my chosen markets and help educate people through the products and services that we sell.  I have stuck to this principle for more than 20 years.  Be prepared to always be refining and making adjustments.  Your business won’t be perfect at first.

There is no denying that luck plays a part in business. Some people may appear naturally ‘luckier’ than others, but remember that in the vast majority of cases these people make their own luck.  It’s the hard work behind the scenes that puts you in the right place at the right time to take advantage of the market. If you’ve got the right ingredients in place and you’re prepared to take a gamble every now and again then luck will follow. It’s not a short term game. In my business it took 10 years for our first big break but hard work and being receptive to change put me in the right place at the right time.

Take our government contracts business.  We had to work things a little differently. You can’t just put your hand up and say you are going to do it. That’s not how it works. You have to prove your ability.  You need the right foundations.  Fortunately we had the right size business, the right individuals, the right marketing and the right IT systems in place. The harder you work the more opportunities will come your way and you need to take advantage of them when they do.

Understanding the job, understanding the customer and their demands, understanding the competition and most importantly understanding yourself, is vital for success. This isn’t a complete recipe, more like a theory, but these few tips will position you in the best possible way to start and maintain a successful business.

Share this post
Email to someoneShare on FacebookGoogle+Tweet about this on TwitterShare on LinkedIn