The Edge asked Alison Sharp, the University’s BSEEN Programme Manager, about the considerations to take when setting up a new business.
Is now a good time to set up a small business?
Some great businesses have set up in good times and others have succeeded in downturns. What’s clear is that in less prosperous times, firms are seeking strong solutions to expand and diversify – minus the costs, so there are great opportunities for start-ups and independent consultants. Business rates and rents tend to be cheaper and it’s easier to negotiate with suppliers. Consumers are also looking to save money and are willing to pay, provided you give them what they want.
What are the key things that a potential SME owner should consider before embarking on a new venture?
When you are self-employed, your financial security disappears. Do your research to ensure that there is a market for your service or product and your customers have the capacity to pay you. Find your niche to enable you to focus, as you can’t be jack-of-all-trades at the start. Reflect on your skills, capabilities, interests and knowledge. Can you do this yourself or would the business benefit from a partner? Also check out whom else is doing it. Can you run your business better or is there a gap in the marketplace? What kind of a demand is there to determine the longevity of your venture? Can it diversify in any way? Finally know your destination. Why do you want to start in the first place? What is your key objective? This is vital for staying motivated.
Are there typical pitfalls that potential/new business owners should be aware of?
Poop money management (cash-flow) is a frequent pitfall and usually occurs when the business owner is too busy delivering the service. But taking your eye off the finances may mean that suppliers are not been paid in time or, if clients dry up for a short time, you haven’t kept money aside. The other pitfalls tend to be having too much vision and little focus, so the business never manages to accomplish anything. Sales and marketing is not limited to the start-up phase. They must be constantly fed like a pet!
If there were one thing that gets a person off to a good start, what would it be?
Know your start-up costs so that you can forecast what is likely to go out of the business to determine how much needs to come into the business and how frequently. You can then set yourself monthly targets.
What kind of support does the University offer to alumni wishing to set up a business?
Alumni are invited to attend identified training workshops and these are advertised on the Entrepreneurship and Innovation (EI) website. For alumni who graduated since 2007, live in the West Midlands and want to set up their business in the area, we run a six to 12-month start-up programme BSEEN, which is part-financed by the European Regional Development Fund. You can receive a grant, mentoring and business start-up training.
For more information on EI call 0121 414 8775 or email email@example.com