Kevins Top Tips
Kevin’s Top Tips is a Startups Magazine series offering practical, actionable guidance on the wide range of decisions and challenges that early-stage businesses face every day, covering everything from startup to scaleup. Written by Kevin Smith, a long-standing entrepreneur and mentor working with the UK’s largest fully funded Entrepreneur Accelerator, the series spans 15 articles tackling the full founder journey — from launching a business and building an advisory board, to fundraising, pitching, valuation, and navigating a recession. It serves as a comprehensive, founder-friendly handbook, delivering straightforward, experience-backed tips that are relevant regardless of sector or stage.
Welcome to a new series of articles where I will provide practical top tips on a wide range of decisions and challenges that early stage businesses have to make every day. Here I will look at everything from start up to scale up and from the more simple to the more complicated.
Having set up a business there are some very logical next steps that have common features irrespective of what your business will do. Any business needs to sell its product or service and make a profit so that it can reinvest in its future and pay the shareholders.
Some founders come up with their business ideas alone, whilst others do so with friends or associates. Some founders wish to stay as sole founders, whilst others prefer to work with co-founders to share the tasks, decision making, and risks, as well as adding often complementary skills or knowledge to their own.
We all communicate every day in both our social and our business lives but, let’s be honest, some do it so much better and more effectively than others. The very word ‘communicate’ can be interpreted in so many different ways, and applied in even more ways.
According to the Office for National Statistics 213,285 businesses failed in the UK in the first half of 2020, a 14% increase on the same period in the previous year. Without looking much more deeply into the numbers it is not possible to say for certain how many of those that failed were due to the coronavirus pandemic and subsequent lockdown but we would not be far wrong to say that the 14% increase, or 26,193 businesses failures were as a result of the pandemic.
As with everything about starting a business, different people do it for different reasons, and they have different levels of ambition. Some people want it to remain a side hustle or a very modest lifestyle business whilst others have plans from day one to scale and grow it into a multi-million GBP international operation.
Founders typically establish a business with one of two game plans in mind. They either want a lifestyle business and one that fits their work life balance, or they want to build a business and grow it with the ultimate goal of building something of value that they can exit when the time is right for them. For any founder seeking to raise finance for their company, or to sell it, whether a lifestyle one or one with more ambitious plans, there will always be the need for a valuation.
One thing that every early stage business should produce is a pitch deck, whether they are looking to raise external funding or not. A pith deck is typically a 15 to 20 page very simplified business plan set out in a PowerPoint type format. Its purpose is to succinctly outline all aspects of the business to any outsider. Just like a business plan, producing a good pitch deck is a good exercise for any founder in refining the business itself, and considering all aspects clearly and objectively.
Welcome to a new series of articles for Startups Magazine. In this series we will look at some of the more common challenges that are faced by early-stage businesses and some of the top tips designed to overcome these challenges or, at the very least, to mitigate their worst effects.
Working with the right partners can make the difference between success and failure in almost any scenario, but this is even more true when running an early-stage business. As a founder, it is simply not possible to know everything that needs to be done and the best way to do it.
Most entrepreneurs, and indeed the early-stage businesses themselves, share many of the same challenges and experiences along their journey. This is basically true irrespective of the industry in which they operate or the product or service that they deliver.
It has been said that ‘when the going gets tough, the tough get going’. But in reality, when a recession is looming and the business environment gets even tougher than normal, many more businesses, especially early-stage businesses, will fail.
If you want to scale your early-stage business, and to grow it quickly, then it is quite possible that you will need to raise investment by selling part of your business to new investors. This is done by the business issuing new shares which has the impact of leaving the original shareholders owning the same number of shares that they did, but a smaller percentage of the total.
When starting a new business, founders tend to fit into one of two categories. There are founders whose plan it is to scale their new business as aggressively as possible and to exit for the maximum value in five to seven years’ time
