Flexible business insurance
You can’t put a price on everything. Curiosity, resilience, and finance management are all invaluable skills and qualities to develop as an entrepreneur. But these qualities can’t transform themselves into a business without the help of money. So is it actually possible to start a business with no money?
Yes - and no. That really depends on your understanding of the word ‘start’. Is it possible to grow a business from an idea into something profitable without any money? No. But there’s nothing stopping you from coming up with ideas and building foundations for your business - you don’t need money to do this. To get things off the ground, you’ll need to think about funding - but we’ll come to that later.
Don’t rush to quit your job
If you’re really excited about your idea, it may be tempting to hand in your notice immediately. But this isn’t necessarily a good idea. Research shows that taking a path of ‘hybrid entrepreneurship’ (starting a business while staying in other employment) may be associated with a higher chance of success. Of course, there are many factors that haven’t been individually examined, such as the idea that those who err on the side of caution may be more likely to make more strategically sound decisions, leading to higher chances of success, etc. But in any case, a business can take years to develop beyond an idea - and longer still to generate profit - so saying goodbye to a stable income is not an option for many.
Plan, plan and plan
“Plans are worthless, but planning is everything”. Dwight Eisenhower may have been talking about military strategy when he said this, but the idea has wider applications. You can have the greatest idea in the world, but with lack of good planning your execution will fail it. Creating a business plan at an early stage is invaluable. If you’re not completely sure of things (and most people aren’t at this stage), consider it a work in progress. Small Business has a great repository of links to business plan templates and resources to get you started.
Determine your USP
Determine your USP and understand it, inside out. Once you (think you’ve) nailed it, encourage yourself to discuss it with others. You can start with a friendly audience - perhaps even pitch to some friends and ask for them to play devil’s advocate. Allow them to challenge you - it’ll only help you to better articulate your proposition, and it’s great practice for if you do decide to seek external funding. Focus on properly structuring your answers to the fundamental questions you’ll get asked time and time again, such as: “what differentiates you?”, “How will you reach your customers?” and “How will you make money?”. Think Dragons Den. Getting other people to bounce this off will help you to develop and finesse your business idea - and if you start to question the validity of your idea, it may be a blessing in disguise.
Understand your market
It’s all very well to have a great idea, but you need a route to market. If the market conditions aren’t right, or pick the wrong market to enter, you may find yourself in a difficult situation. Before taking things further, it’s wise to do some in-depth market research. Is there currently a market for your proposition and is it large enough to support your ambitions? Is the market growing, or is it already saturated? Depending on the type of business you’re running, you may even decide to enter the market somewhere else in the world entirely - the internet makes that very possible.
This depends on the type of business you’re setting up, but for better or for worse, the adage “it’s not what you know, it’s who you know” often rings true in the world of entrepreneurship. In any case, you can learn from those who’ve been through the experience of starting a new business. Meeting people can be hard though and it takes time, so it can be a good idea to focus on relevant business areas. Meetup can be a good place to start. Networking is also especially important if your pipeline includes raising funds externally. Particularly if you’re looking at a globally marketable tech-based proposition, for example - for which there may be investors for you all over the world (making it less likely for you to initially meet in person). It’s no coincidence that networking sites like LinkedIn, Crunchbase have so many members!
Test the waters
You’ve already extensively run your idea by a familiar audience and networking acquaintances. You’ve gathered all insights and have probably made adjustments to your proposition at this stage. Now it’s time to see how your idea holds up amongst the people you’re actually trying to reach as customers or clients.
Crunch the numbers
Things are really coming together. You’re making progress following your business plan, but it’s time to get your head down and make sense of the numbers. Based on your market research and current performance, how much money do you need in order to run your business? Bear in mind that it can often take years for companies to break even.
Keep on top of admin
You’ll have been doing bits of this throughout, from setting up your company and figuring out taxes. But at some point if and before you come to securing external funding, you’ll need to make sure all this is all in shipshape, as investors or grants applications will take this into consideration. You’ll need to think about getting protection too. If you decide to go the VC route, you’ll likely need to consider directors' and officers' insurance (D&O), which can be difficult for early stage businesses to secure through a traditional broker. Our D&O cover is specially developed to be suitable for startups.
While many first-time entrepreneurs start out small, often with a small pot of savings and while still employed, this doesn’t mean that you shouldn’t be thinking about your funding strategy. There are a number of options out there, from angel investors to government grants. It literally pays to do your research - you may find that you’re entitled to certain grants, for example. Support For Business may be worth checking out, as it provides a fund finder directory which includes grants, funding, business support and accelerator programmes across the UK.
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