In tough times, young entrepreneurs who see local businesses struggling may get discouraged, because those businesses’ markets are likely to be their first target. Lately, many in this situation have requested advice about whether they should go ahead with their ideas for new businesses; some have asked how the economic conditions compare with when I was launching my first businesses as a teenager, and what I’d advise them to do differently.
I believe that aspiring entrepreneurs around the world all face a similar mix of problems, many of which I tackled when my friends and I started up Student magazine in the late 1960s. Some of the key ones are the need to find a strong niche that differentiates your business from similar enterprises; the courage to go ahead with your ideas; the ability to punch above your weight early on; and finding funds to help the business grow. Unlike my generation, however, today’s entrepreneurs have one big advantage: The ability to connect to foreign markets, as well as local and national ones.
Earlier this month, I travelled to our Branson Centre of Entrepreneurship in Johannesburg, South Africa, to meet with a group of new business owners who were keen on learning how to grow their businesses. During the meetings, two young entrepreneurs who had travelled from Britain, Ashley-Rae Tapping and Amman Ahmed, identified some urgent issues they have encountered.
Tapping, 23, a designer based in London, had been saving for the launch of her business since she was 14, working multiple jobs to save the money for a fashion label and fashion-focused media site. She said one of her biggest obstacles was her lack of knowledge about how to run a business—most of her knowledge came from reading business books and autobiographies of entrepreneurs who started from nothing. She also found it tough to get people to take her seriously because she looked young. Ahmed, 24, from Manchester, started his business straight out of university, and failed to raise funding for what he describes as a “nutter” idea to create a series of CDs and downloads centred on music that helps people to sleep and relax. He tried to sell these recordings to hotels, airlines and in stores, but did not find any interest. Instead, he decided to turn to the online route and build his social media brand so he could connect directly with his customers. Keeping their experiences in mind, here are five guidelines to help you through the pitfalls of starting up a firm:
1. Find the gaps caused by tough times
In turbulent economies, one often finds that big businesses are preoccupied by their fight for survival and slow to innovate and adapt. This creates gaps for new, nimble companies and presents exceptional opportunities for launching businesses.
Property is often cheaper, people are more available and raw materials may be more affordable. And remember, finding investors with deep pockets is not always the answer. In this environment, Ahmed’s direct marketing scheme was a smart ploy: With the middlemen concerned about cutting costs, he was better advised to shift his efforts to those who would actually be buying his products.
2. Turn your ideas into reality
Too many good ideas don’t get off the ground because a person does not have the bravery to start, and then many fail because people don’t have the determination to make it through the tough times. Gather your courage, make the leap, then follow through.
3. Think global
Go beyond your area to explore manufacturing, supply, distribution and sales in national and international markets. A great place to start is by looking at how your peers abroad have launched their businesses.
When she was in South Africa, Tapping was inspired to look into whether she might be able to have her fashion line made in South Africa and also explored the implications of employing her own garment production staff. Also keep in mind that communications technology and the globalized business landscape will make it easier for you to find markets in other countries. Once you are sure that you can develop the capabilities to provide your product or service in these markets, start reaching out to potential customers.
4. Network, network, network
In Tapping’s case, many of her most pressing questions would best be resolved through discussions with experienced business people from the fashion and media industries—especially those who might help her network. If you run into a problem, talking with people who have launched businesses in or have worked in similar fields will often help you find the best solution. When I launched an airline as a young entrepreneur, I found the advice of Freddie Laker, founder of Laker Airways (which was defunct), invaluable. He helped me to shape our approach to marketing from the start.
5. It’s all about survival
Surviving the first few years after start up is tough, and most entrepreneurs fail the first time. To endure the setbacks and keep going, you need to have faith in yourself and your ideas. No matter where you found your business or when you choose to launch it, going into business for yourself is a timeless personal challenge. When you are working for yourself and toward your own goals, the achievement of success is the most rewarding.
By NYT Syndicate
©2011/The New York Times
Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog. You can follow him on Twitter at twitter.com/richardbranson