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View Full Version : Starting a business - anyone been there ?


sir
4th Apr 2002, 12:54
Dear fellow ppruners,

If sir had what he believed to be a profitable and viable business idea, but did not posess the required capital to realise it, how best would he go about raising the dosh ?

Don't panic, I'm not buying Tristars or anything mad like that. :D

I'd prefer not to go into what the idea involves etc, but the investment I need would be in the order of 150,000.00

Has anyone been there before ?

Any advice from my learned colleagues would be very welcome....

Grainger
4th Apr 2002, 13:05
Yes. I've done it, and it's great. Beats working for some company - you just know they're making more money out of it than you are. Good luck with your idea !

The single most important piece of advice I can give you is:

However you raise the money, if you want to go into business for yourself, do just that: do it by yourself.

On your own.

Alone.

I Mean it. Seriously.

senkrcha
4th Apr 2002, 14:43
This is good advice from Grainger, worth following.

Next thing you should do is write a business plan; mission, objectives, strategy, budget etc., Set out in detail what it is you want to do, how you are going to do it and of course how it will make money.

Once you are done and happy that it makes good sense bring it along to your friendly bank manager. If it is a sound business proposition you could end up with your starting money.

Goodluck.

Kilted
4th Apr 2002, 16:49
Sir!

Currently running one business of my own, and about to start another. Ditto the advice above, though (at least in the UK) I have found that banks are not keen to lend funding unless you match what they put up.

If you want someone to invest, its going to cost you control, equity and probably more than a few sleepless nights, hence the advice above - if you can keep it, do so - all 100%. If you do decide to go down the VC / Business angel route, there are lots of places to get advice - try searching google for "Venture capital" or "business angel" and you'll get a good list of info sources.

Whatever it is - good luck!

Unwell_Raptor
4th Apr 2002, 18:45
Don't forget that to make a success of working for yourself you need to make between 150 and 200% of what someone else would pay you. This allows for the holidays and pensions being worse and the worry being more. There may also be the benefits of the Bank having a charge on your house. That is usual, but it is no fun when you have a bad month to think that you and your family could be out in the street.

CUNIM
4th Apr 2002, 20:00
I'm doing the same myself since the start of this year. I advise you to get a good non-disclosure agreement for the moment that you need to start talking to any VC or business angel, your idea is valuable. My son is also looking for capital 1.3 million. The first VC was all mouth and no trousers, so be pickey and try to find people in similar circumstances as yourself, that is - network.

All the best of luck:)

trolleydollylover
4th Apr 2002, 20:02
I wish you the very best of luck.

This post seams to have been sent from heaven.
I quit my job on tuesday this week to start working for myself. I have been planning it for years. Now I have what I need to start, I am working all the hours I can. If I am not working I am thinking about working. I have come onto PPrune as a way of escapism. Then you have to go and remind me.
This is one of the most exciting times that I have ever had in my life, I cant sleep, my girlfriend stays at her parents and I need a holiday. However I dont think that I would change it. I feels rewarding the fact that I am My own boss.

In terms of funding, dont rely on the banks, they are pure evil.
Venture capatalists may be a source, however, for that amount a reputable one may not look at it. They will always want a share and they will eventually want to sell their share. So that you lose control of what you eventually set out to achieve.
However dont let this hold you back. If you want it you will find a way...I have, I think.

People are always looking for that one original idea, that will make them mega bucks. However If your idea is already there and there is a space in the market then go for it. You wont know until you try.

I feel like a new born lamb, all shakey on my feet, but,
If there was one bit of advice that I could give it would be Up and at 'em.

Good Luck
TDL

Grainger
5th Apr 2002, 08:07
There are all sorts of Government grants and schemes that you should check out before signing up with investors.

If your idea is at all technology-related, you should certainly apply for a SMART Award: http://www.sbs.gov.uk/SMART/

And you could avoid having to sign over your house and kids to the Bank Manager if you can get a Small Firms Loan Guarantee: http://www.sbs.gov.uk/SFLGS/

There is quite a bit of paperwork and hassle involved in applying for these but a lot less grief and nitpicking than you'll get with VCs in the long run. The DTI has this money in its budget and they have to give it to someone, so it might as well be you (Projects that have been funded in the past include Cat Litter and a new kind of valve (wow!) so you have every chance of getting something).

Then there's your Local Authority. They will also have a budget of money that they have to give to someone. For a lot of it they'll want you to employ local people or rent office space (on their Science Park or Business Centre, of course) but we got several smaller grants for travelling to trade shows and exhibitions so go for these smaller awards first.

Finally, plan for the costs to go up: if you think it's going to cost you 150 Grand it will end up costing you at least 250 Grand. Guaranteed.

Very best of luck. Email me if you want any more detailed information.

G

Charlie Foxtrot India
5th Apr 2002, 13:21
I started up my own business five years ago and we are going strong, but boy do you learn some lessons along the way! And never stop learning.

As said above, go it alone if you can. Cliche #1: "A partnership is a ship designed to be sunk"

Get to know the competition Cliche#2: "Keep your friends close, and your enemies closer" Cliche #3 "The bigger the smile the sharper the knife". Don't think anyone will thank you for doing them a favour, because they won't! They'll poo on you from a great height if they think you are a soft touch.

Many people think that being your own boss = freedom, and it does to an extent, but whereas an employee is answerable to thier boss, the boss is answerable to their clients, and they are the ones who make or break you and can make your worst boss look like a pussy cat in comparison. They can and will make your life hell at times, and you have to keep them happy or you're finished.

You have to live and breathe your business 24/7, you and the business are one entity, and this requires very understanding and supportive loved ones. You need to be prepared to make sacrifices. Forget holidays and time off, if your clients want you to be there, you have to be there. Never drop your guard.

Keep your own books, never trust someone else to do it. Check your cash flow every day. Don't let your debtors use you for interest free loans, spell out your credit terms and stick to them! Don't listen to excuses, be the squeaky wheel. Don't be afraid to take them to court.

If times are tough, don't drain money from the business for your personal use. You may have to go without a wage for a while, but it will pay off in the end.

Find a tame accountant, lawyer, finance broker and insurance broker and build a good relationship with them.

Don't promise what you can't deliver to get a client, or you will end up losing big time.

Don't ever sell yourself short.

ALWAYS be nice to your staff.

Read autobiographies of sucessful people, such as Richard Branson's "losing my virginity"; and the classic "how to win friends and influence people"

It never gets any easier, you just get to cope with it better.

Cliche # 4 "The bigger you are, the more you have to lose".

It's not easy, but I wouldn't change it for quids!

All the very best of luck!

maninblack
5th Apr 2002, 14:40
And for all those in a small business remember to smile at everyone when you are on the way up so they might help you when you meet them again on the way down.

I fell off the pile for various reasons two years ago and I was surprised how much some people have helped me because I didn't lord it when I was succesful. People sometimes remember the guy who helped them, but they always remember the arsewipe who was rude.

One of my ex business associates is now finding knives stuck into them because I am not there to smile at customers, competitors and associates.

Konkordski
5th Apr 2002, 16:03
Don't hire Andersen as your auditor :D

VnV2178B
5th Apr 2002, 16:41
Just another note to concur with Grainger.

I did this some years back with a couple of (then) colleagues, we suvived for three years without too many fights but eventually one guy decided he wanted to 'own' the company and managed to get a team of his cronies into run the office while we did the graft on customer's sites. All seemed to be in the companies interests at first but eventually he managed to marginalise me and the other director so well that when we turned up one afternoon a staff member (who we didn't recognise) actually asked who we were.

If you want to go it alone, do just that.

VnV

Grainger
5th Apr 2002, 19:49
Yeah, amazing how quickly a "friend" can turn into a complete [email protected] isn't it ?

solotk
6th Apr 2002, 11:34
I've been self-employed since 1990, and yes, there have been some very very hard times, but there have been Champagne and Caviar times too. I have learnt a hell of a lot, and sometimes the hard way... but

Always if you can, do it on your own, don't get partners or anyone else, who will leech on your abilities. I have lost count of the number of people I have taken into a partnership, only to have them turn into greedy [email protected]
As regards funding, when I started, it was actually one of my prospective clients who provided seed capital. I didn't want to go to the banks, and he was kind enough to invest a four figure sum in me, and called it "retainer advances"
Make sure you have a good accountant, and keep every receipt you can. Pay your VAT on time, and be as open and transparent as you can.

Farm out your invoice chasing, it's hard to be a salesman and friend, and a money-demander at the same time.

Get members of your family involved, they want you to succeed , as much as you do. I used my sister as my PR girl, and she found she had an incredible talent for it, and it helped no end.

Never take an uneccessary risk, no matter how wonderful the returns might be. Better to not have something you might have, then put yourself into a negative position if it doesn't come off. Do not put all your eggs in one basket, as regards suppliers or customers, and most importantly of all, BELIEVE IN YOURSELF.

People close to you, will pooh-pooh your ideas, but you must always have the conviction of your beliefs.

Seek advice from neutral parties about your idea, and have them sign a confidentiality agreement, if the idea is good enough, they will always provide another angle on what you are trying to do.

At present, I am working on a software idea, that I have jhad sat dormant for about 5 years, it's only now, when an ex-girlfriend, who is in a VERY strong position to do it herself, reminded me, and offered some finance to make it happen, so BUILD YOUR CONTACTS. Get as many as you can, buy lunch etc, it really will be worth it in the end.

Anyway, sorry to ramble, hope some of this helps

Tony :0)

solotk
6th Apr 2002, 11:39
Oh and one thing I forgot.

You say you need 150,000 to get this baby off the ground. I expect that is your "ideal world" figure...

How much would you need, to get it out of the hangar?

Sometimes, a lot of finance can be self-generating, and it also means, you have less of a mountain to climb, in terms of returning to profitability

Tony