Self-employed? How to hit a home run and be one of the 20% that succeed
10 May 2019
Author: David Lewis, Managing Director, Maker Mends Ltd
In September It will be my 40th year since starting my award-winning company. I am proud of the business I have created and the wonderful staff that work so tirelessly to provide such great service to my customers. I’m here to share some of my approaches and considerations that I have taken into my business and that helped me build Maker Mends into what it is today.
First of all, I have to wish you all the luck in the world. If you are a business owner or wanting to be a business owner I straight away admire your ambition and hope you succeed.
Image; David Lewis, Managing Director at Maker Mends Ltd
Entering the game - What makes you believe you have what it takes to be a successful business owner?
Whatever business you are in, I firmly believe being ‘exceptional’ in your field helps launch your reputation. In the early days, it’s often all about you, you are the brand despite whatever plans you have for the company name.
So, you think you’re exceptional?
Great.
Speak to independent voices to see how you measure up to the competition. How are you unique? Ask customers you may have worked with, even co-workers or people you have collaborated with. But, do your homework. If you are not yet exceptional or even close to it, you may wish to continue your learning experience until you have the skills required. There is no point in investing capital into a new venture and fail because of a shortfall in experience. However, if you are exceptional and independent and enough people have told you enough times then perhaps you should start your own company,
Make life easier and set yourself business principles
It would give you the clarity to approach your decision making if you start with a set of guiding principles. If you abide by your raison d’etre of why and how you wish to be a successful business owner, then when you are confronted with future dilemmas, by adhering to those principles it may help you to navigate difficult decisions. Knowing what you want to achieve and how to do it with integrity is extremely important especially in the jewellery profession where your reputation is everything. A good challenge is to say in real simple terms what makes your business better or different to anything that is out there.
Occasionally your original business concept moves away from its expected path due to the various opportunities you find along the way. Do not be afraid to adapt those original principles to better reflect these changes ensuring that they fully reflect the companies current status and are equally robust and ethically sound.
1st base: Finance
Nobody starts in business without making lists, and it’s important you brainstorm and jot down everything you think you will need to get going. The tools and machinery you may require, the support you will need, the business software you will require your website and hardware to cover your IT requirements. Then list in order of priority each area, and double check with guides that are available online to make sure you haven’t missed anything. Locate premises if you are not going to work from home, a good idea is to check with local authorities just in case they have start-up units that may be subsidised.
Based on your research, if you were to work a traditional working week, what does your process cost look like over the year in terms of financial outlay? Now apply the annual cost of your overheads, and that’s the bare minimum you need to operate every 12 months.
Take time to source a respected accountant and seek their advice on your lists and processes. By doing this work beforehand, you can have a realistic conversation with the accountant on what is possible, but also what is likely. This isn’t the time for blue sky thinking. Remember the accountant is there to help you reduce the risk of things going wrong so this discussion will be an important part of the process. They’ll also guide you through how to register the name of the company and help you formulate a rigid business plan. Again, take time to explore the internet for case studies on how other people set up their businesses beforehand, I’ve found YouTube to be particularly useful in some areas where I have had insufficient knowledge.
You will need to produce a process of buying materials and how you plan to deliver a product or service. Apply costs for both materials and your time, in order to identify what the total business ‘cost’ is to you for each service or product you supply or make.
Once you have completed ALL the above you will have prepared well enough and should have the confidence to approach a bank for finance. The better prepared you are will result in a better-quality business proposal and the bank will/should take you more seriously. Now you have a business plan and accountant in place, and are adequately financed, move to second base… but do so via an insurance company. You need to protect you and your company, and there are plenty of companies that offer specialist insurance for Jewellers.
2nd base: Customers
Ask yourself these three simple questions:
- Who are your current customers?
- Where will future customers come from?
- How will you hope to gain new customers?
Many people can earn a few pounds here and there from some trade contacts, friends and relations that they know, but that may be the limit to what you can achieve and these contacts will have probably taken a little while to accumulate. These people know you personally but to expand you will need to approach people that have never heard of you and will very likely already have a list of similar suppliers. There may be another shop or website selling the same goods.
Can you answer these questions (using your business principles is a good place to start):
- Why will the prospect move their purchasing to you?
- What happens to your business plan if this does not happen?
If you believe that there is a vacuum in your chosen field that truly needs your new business, then move to third base.
Third base: Your network
However hard you plan there will always be challenges that you come across that no one could have anticipated that can test even the most experienced business owner. It would be very useful if you knew someone who you could consult, be it a friend, relative or acquaintance that is there for you to talk to. Think of this as a "Phone a friend” type of person, just without Chris Tarrant or the pressure of needing an answer from them. Sometimes, just explaining a situation to someone that doesn’t know the business, can help you come to terms what needs to happen.
If its business-related, you can always seek advice from the NAJ. The foundation category of membership and mentoring programme can prove good value for people new to business. Being ‘in’ the community also makes tasks like researching, networking and learning a little easier, and there is always a team at the end of the phone ready to help you. There is also many other organisations out there for small business owners, such as local chambers of commerce, princes trust (who can support with funds) and also the Institute of Directors.
If you need to employ staff, it is important to understand your responsibilities regarding employment law, which I can assure you is much more complicated than you may think. I won’t go into detail on this, but the Better Business area of the NAJ web site does provide useful guidance such as business contracts, hiring and employee rights. If you prefer you can always consult with your accountant.
4th base: Reality check
It is a sad fact that within 5 years 80% of starts ups will have ceased to trade. Common causes of these failures are; Poor cash flow, disruption to family life, poor management of day to day tasks, location, expanding too fast and poor marketing, all of which can be related back to planning.
You do not have to look far for realistic suggestions on the common reasons businesses fail. Again, YouTube comes into it’s own here, and The NAJ are able to put you in touch with other Jewellers who can provide you with guidance, as long as you’re not stepping on the other Jeweller’s toes that is.
Have you hit a home run and been successful in your first year of business?
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David Lewis, Maker Mends Ltd