Entrepreneurship...
or How to Turn Your Business
Idea into Reality!
Ian Duckett – Careers Advisor
[Mar 2010]
Learning Outcomes
This presentation will cover:
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The success factors in start-ups and the motivation and skills
that are required to run your own business
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How to start thinking about your business idea and to decide
whether it is a practical proposition
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The information that goes into a good Business Plan
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Some key messages to take on board
There is an accompanying handout ‘Starting Your Own Business’
which can be found on the Further Activities and Resources
section of the Business and Commercial Awareness segment of
the LearnHigher website
Reality Check – Starting a
Business!!
If it was easy everyone would do it!!!
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70% of start ups close down within 3 years but remember not all
closures are because of business failure. People often sell
businesses or take up paid employment.
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Running your own business provides you with great learning
experience in terms of:
Leadership and Team Working
Communication and Networking Skills
Commercial Awareness
Planning and Organisation
Adaptability, Flexibility and Resilience
Independence
Business Success Depends On ?
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Seriously considering your motivation (including appetite for risk!)
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Being aware of your own ability, skills and capabilities!
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Realistically thinking through the business idea and start-up
options
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And, if you are starting straight from university, perhaps at the
outset, not having too complex a business model!
The MAIR Model
Research the
market &
plan
marketing
Motivation
Ability
Potential
for
Success
Idea
Resources
Gather team
& plan
operations
Explore
funding
& plan
finances
Take lots of
advice &
network
Write
Your
Business
Plan
Negotiate
Yourself
Into
Business
To be successful in business you
usually have to offer:
Something that is better in terms of quality, process,
delivery , service and/or cheaper…
OR
just you and your team being plain nicer to deal
with…
…than the competition!!
Serious Questions to Ask Yourself
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How committed are you? What are your driving forces?
Are you prepared to work hard and to take risks? What are your goals?
Does self-employment match with personal/family needs? (it’s
definitely not a 9-5 job)
Have you the right skills?
Do you know your own strengths/weaknesses?
Are you really good at the core skill required?
Have you a feasible idea or can you find one? (maybe a franchise
would be a low entry cost option: look at Kleeneze on
www.HowWeEarn.com
Does the idea fill a gap in the market: will it sell???
Can you find premises, tools/suppliers, staff required ?
Have you a funding need (not easy to get for start-ups!!)?
Can you survive initially on what may be a low income?
Can you build networks for support and development?
Who Mentioned Entrepreneurism !!
Name some:
 Richard Branson
 Stelios Haji-Ioannou (Easy Jet)
 Alan Sugar
 Anita Roddick
 Philip Green
 Martha Lane Fox
 Clive Sinclair !!
 Samual Cunard !!!!
Question

What key skill do you think they all
have in common?
Answer

Spotting an opportunity in the
market!
Entrepreneurism
No agreed definition but a good one is perhaps:
‘An entrepreneur is someone who has the ability to
recognise or grasp an opportunity and the ability, skill
and commitment to manage risk in order to achieve
success’
Merseyside Economic Review 2007
Do you have to be an entrepreneur
to run your own business?
No !
Not all business people are like Richard Branson or Stelios HajiIoannou

Entrepreneurs tend to be involved in novel start-ups, new products
or services or new routes to market and with fast growing
businesses. They often switch sectors.
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Most start-up businesses are not novel or fast growing: they are
plumbers, hairdressers, small retailers, web designers etc.
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Most start-ups are just undertaken by ENTERPRISING people
Enterprising Attributes
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Initiative
Flexibility
Teamwork
Leadership
Hard work
Creativity
Planning/organisational
skills
Problem-solving ability
Negotiation skills
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Calculated risk-taking
Independence/desire to
control one’s own destiny
Desire to achieve
Note that many of these are
exactly the competencies required
by the leading graduate recruiters.
If you have a go at running your
own business it will add to your CV
and your ability to answer tough
questions on application forms.
Check Your Own Potential to Run a
Business
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Go to:
www.potentielentrepreneur.ca/client (A Canadian site)
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40 questions, scoring 1-4
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Receive a print out to show your responses against a
typical entrepreneurs profile !
Ideas into Reality – the Idea
It might be:
 A ground breaking invention (usually extremely high
risk)
 A brand new product or service (very high risk)
 A new solution to an everyday problem (high risk)
 An enhancement to an existing product/service (less
risky)
 A gap in an existing market that you can fill (less risky)
 An interest or hobby that you can turn into a business,
possibly part-time at first, and using known contacts (low
risk)
Make sure that the idea fits with your needs as
an individual or your family
Test Your Idea
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Get feedback, bounce your idea off others, preferably those with
some commercial experience (friends, family, the bank, business
advisers etc.)
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Remember, above all, there has to be a MARKET and an end
CUSTOMER who will pay real money for your product or service.
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Identify any weaknesses in your plans and consider the best
strategy to overcome them.
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Beware ‘Product Infatuation’. It seems a good idea, you think
people are bound to buy it, but they don’t. Yet you keep on going
and going, throwing more time and maybe money at a likely failure.
Do the Outline Sums
Nearly every new business needs some money for :
 Premises, equipment, vehicles (capital items)
 Stock
 Advertising/marketing
 Rent or lease payments, business rates
(If working from home do you need planning consent?)
 Utility costs (heat, light, power)
 Transport costs
 Your salary/drawings and maybe other staff costs
Remember sales are often slow to build up and, unless they are for
cash, you might not get paid for 1, 2 or even 3 months.
Suppliers to new businesses often want cash! How your cash will
flow in and out is the key to survival!!
Use the Venture Navigator
Assessment Tool
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Free, online 24/7, objective analysis of business viability.
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Delivers benchmarked report of individual business situation and
points user towards resources, both web based and physical, that
can offer relevant solutions
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Over time user can return to report to update information and seek
further support and guidance
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System developed by 7 major universities including Cambridge,
Warwick and Liverpool plus other institutions including National
Council for Grad Entrepreneurship - www.venturenavigator.co.uk
Write a Business Plan ???
WHY:
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Makes you think through the idea in some depth!
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It is a test to see if your idea will stand up to scrutiny!
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Usually essential if you want to borrow money !
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Provides an ongoing reference point for when you are in business!
Business Plan Tips
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Before you start writing, think where you want to be in 3 to 5 years
time, outline your vision
Address it to the appropriate audience, be that financial or technical:
it must be readable and understandable
Many people start with the ‘back of an envelope’ approach and
develop that into a marketing/funding feasibility study and ultimately
a full blown business plan
Most important areas are management, sales generation and cash
flow: you must understand your numbers!!!!!
Be clear and concise, between 10 – 15 pages, 20 max
Your Business Plan –
should cover these broad areas:
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Business description and vision.
 Outline of your/your team’s background, skills and experience
 Product or service detail
 Marketing analysis including competitor detail and your strategy
 Operational requirements
 Detailed financial requirements
 Risk evaluation
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All of the above are usually précised in an Executive Summary which forms the
first section of the completed plan.
 Numerous templates are available online from agencies and banks.
 More detail is set out in the accompanying handout and the slides at the end of
this presentation
Some More General Points !!
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If you need funding then your knowledge and experience (and that
of other members of your team) are key:
Management/Management/Management is the investor
mantra!!!
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If you have no experience think about getting it first!!
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Choosing the right legal status needs careful thought.
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I would recommend Sole Trader or Limited Company. Partnerships
can be fraught when things go wrong.
Funding
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It is better to have 70% of something than 100% of nothing.
People will not invest risk capital without a reasonable stake
and return.
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Commercial lenders like to see you invest some real money
into a project before they will lend. That ties you into the
business and means you are less likely to give up if the going
gets tough. It used to be £ for £ but with schemes like SFLG it
can be 20/80 or 30/70
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Don’t try and fund long-term purchases
(property/equipment/cars etc.) with short-term money
(Overdraft/Credit Card)
Customers are King!!
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Customers can be difficult and sometimes expensive to find, make
sure you look after the ones you have!
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Just printing a few leaflets or having a website is not enough.
People have to find that website and you need to know about
internet search engines.
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If you are planning to sell to large companies such as the major
supermarket chains there is a long and rigorous process that has to
be followed. Products are often trialled in a small number of outlets
before being sold across all outlets. Can you gear up production?
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Remember your customers are your best sales brochure!!
Other Events/Resources
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Use ‘Venture Navigator’ site to initially evaluate your idea
www.venturenavigator.co.uk
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General business advice from www.businesslink.gov.uk
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Look at NCGE site www.ncge.org.uk
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NCGE sponsor ‘Flying Start ‘ programme that offers a series of 1-3
day, free business training events www.flyingstartonline.com
Business Planning
The following slides show, in more detail, the areas to be
covered by a Business Plan
Business Description & Background
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Business Aims and Objectives incorporating what you are seeking
by way of investment and other funding
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History of Development and any Trading to date
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Current or proposed Legal Status
(E.G. Sole Trader, Partnership, Limited Company)
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Details of You and other key personnel. Your experience in the
industry/sector and professional or other qualifications
Product or Service and Marketing
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Provide full detail of your product or service.
What specific market are you targeting?
Details of any major customers/target customers groups
What market research have you undertaken, why will people buy
your product/service?
How will you cost/price your product/service?
Who are your competitors?
What makes your product/service better, faster, cheaper or nicer
than the competition? Effectively what is your USP!!
Operational Requirements
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How will the product be made and sold or how will the service be
delivered?
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What premises and equipment will be needed at the outset and as
the business develops?
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What staff will be needed both initially and as the business builds
up?
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Can those staff of the right quality be found and trained?
Financial Information
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Monthly profit and loss, balance sheets and cash flows are usually
required for 3 years
You must fully understand these figures even if you get specialist
help in their preparation
Detail the assumptions made in the preparation of the figures (E.G.
in sales growth, in profit margins, in payment terms)
You must understand those assumptions
If you need to borrow to fund asset purchases then assume that
borrowing is available and bring the finance costs and repayment
projections into the plan/forecasts
Risk Evaluation – SWOT Analysis
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Outline Strengths and Weaknesses of the business and yourself.
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How can any known weaknesses be overcome?
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What opportunities exist and how can they be exploited?
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What are the threats, including the competition, and how can they
be overcome or mitigated?
Executive Summary
(Comes first in the plan document but usually written last!)
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Brief Overview of the business/proposed business outline your
vision 3/5 years out from start up
Say who you are, role in business, background and qualifications.
Also detail other key members of team
Summarise how you will trade and why there is a market for your
product or service (and justify claims if you can)
Summarise current financial position
Summary of Forecast P&L, Balance Sheets, Cash Flows
Outline funding needs in terms of:
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Asset finance (Capital purchases)
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Working capital
(Funding sales costs and day to day expenses, pending invoicing
sales & then the receipts from those sales actually being received)
Final Message!!!
If at first you don’t succeed, don’t give up!!!!
BBC Dragons Den rejected these two ideas:
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‘Stabletable’ - gadget for levelling wobbly tables. Product made in
China. Has deals in US and UK (here with wholesaler who supplies
Tesco & Asda). Turned down for £90k investment.
Sales now £1m+
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‘Trunki’ - children’s sit-on suitcase. Started with £4k from Princes
Trust. Had a minor design fault when demonstrated on the show.
Wanted £100k for 10%, was offered £100k for 50%, didn’t accept.
Product now stocked by John Lewis, Next, Mothercare, Harrods,
Fenwicks. Walmart deal pending.
Sales circa £2.2m p.a.
Good Luck!
A Little About Me! (the author)
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Currently Part-Time Careers Adviser
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1998 – 2005 Merseyside Special Investment Fund
Investment Manager
Objective 1 Fund lending money to Merseyside SMEs including
Start Up Businesses
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1963 – 1998 Barclays Bank North West Region.
Posts included:
Assistant Operations Director (1995 -1998)
Regional Personnel Manager (1990 -1995)
Branch Manager 3 Branches (1981 -1990)