It’s exciting being an entrepreneur.
It’s exciting taking those first steps into being your own boss, building your team, crafting strategies, developing your ideas, sometimes literally, from the back of an envelope on to the world stage, screen or tablet. Plenty of us are giving it go – over 3.5 million innovation-based companies have been created so far this year, according to the CFE’s StartUp Britain initiative. But while the statistics in the UK suggest 91 per cent of them will make it past their first year, less than half will make it past five.
Often, new companies run out of seed money before their game-changing product or service has had time to establish its audience. What differentiates start-ups from established business ventures is also what makes them high risk. Having a great idea that hasn’t been done before has the potential for greater returns, but it comes with its own set of challenges. Too often, the innovator who kicks down the door is left exhausted, broke and picking splinters from their feet, while the next iteration of their product or service glides unhindered through the open doorway to reap the rewards. For every Facebook, a Friendster; every Apple, an Apricot.
It’s tempting, when a new business venture is struggling, to rationalise any problems as solvable with heroic doses of stoicism and tenacity. Work hard, do your best and you’ll be sure to achieve your dreams – that always works in the movies, right? Experience has taught me otherwise. Passion is a wonderful thing – in art and in business – but it can be counter-productive, especially in the creative industries where a romantic tendency towards martyrdom in the pursuit of industry goals is compounded by tales of against-the-odds success. My business, Gestalt Arts, is an innovative opera production company, so I have experience as both an entrepreneur and a musician, director, writer and producer. I was fortunate to be selected to take part in the Guildhall School of Music & Drama’s Creative Entrepreneurs programme, a business incubator run with business strategy specialist, Cause4. What I learned during my time there was that there is little place for sentimentality when it comes to building a sustainable business but more than enough room for clear thinking and passion.
Here are five key takeaways from that programme I hope you find useful too:
Find your people – If you’re company is struggling, everyone in your organisation will be critical to your survival. Are you happy with your business partner/s? Are they doing their fair share? Are you? Sometimes it’s better to re-configure/part ways than continue in a situation that is breeding resentment. A mentor with business experience can also be invaluable to steer you through some of the pitfalls of company stewardship.
Do the math – Going through the business incubator process is a great way to thresh out what your business is actually delivering and for whom. Can you prove there’s a market for what you are doing and that your pricing structure is competitive? Being on top of your numbers and agile around what your figures reveal is key. If there’s an unexpected area of the business that’s bringing in higher-than-expected revenue, be prepared to adapt your strategy around it, even if it conflicts with your original business plan. Could what you’re doing be simplified to reduce costs or complexity? Once you’re up and running, think about efficiencies that could reduce overheads to increase profits.
Know your industry – Homework never stops. Get to know your market inside out and stay up to speed on your competition, your sector and how your clients are spending their budgets. Networking at industry events, conferences etc. can help you stay on top of new trends, business models and to find new business opportunities.
Timing is everything – Being able to plot your financial timeline accurately for any business venture is crucial. Silicon Valley tech companies are obsessed with their ‘runway’ and burn rate with good reason. A long payment cycle can put you on the ropes, so when looking to invest in a new client market, or taking part in a competitive tender, assess whether the return justifies the efforts and ask yourself if the expected windfall will arrive in good time.
Don’t forget the passion – For all the talk above about calculated decision making, profiting from your business isn’t just about making money. Make sure you enjoy what you do. Every business is going to have ups and downs – but it’s important that your original vision and enthusiasm doesn’t get squashed in the fight to stay afloat. Don’t suffocate your inspiration before it gets off the ground by sticking too doggedly to a particular idea or business model. Take care of you as well as the company – don’t burn yourself out. Be cautious with the cash and time you commit but don’t lose sight of why you founded your company in the first place.
Failure and risk go with the territory of being an entrepreneur, but they’re also what makes the successes and wins all the more thrilling. And you’re not alone. There are organisations out there to advise and mentor, like StartUp Britain and Cause4 and for a more informal venting outlet, there’s always Startups Anonymous. Keep focused on what you’re trying to achieve, stay nimble, apply your tenacity and heroics where they can benefit you most – doing what you love.
About the author
Ruth Mariner is a musician and entrepreneur whose business, Gestalt Arts, was awarded Amati Global Investors Creative Entrepreneurship Award in 2017. The innovative opera production company is behind Liquid History, an opera inspired by objects found on the Thames shore, and Unsung Heroes of the Planet, an opera devised in collaboration Cardiff University about how trees communicate. Business success takes time and, according to Ruth, it’s all about knowing what to struggle through and what to let go.
