Five questions you should ask yourself before starting your business

At Tech Trailblazers we want to do everything we can to make your startup thrive. Winning an award can be a boost to your business and help those tricky conversations with investors or potential customers, but before you take the plunge there are a few things you need to ask yourself first.

Glenn O’Grady, who co-founded GuideSmiths in London in 2014, gives practical advice on what to consider before you start out on your startup. His experience comes from taking GuideSmiths right from conception to being sold off to DCSL Software in March earlier this year.

Five crucial questions

There are 2.5 million more businesses today than two decades ago. According to official figures, in 2020 there were six million private sector businesses in the UK, up by 112,700 compared to 2019.

Some of the businesses will be hugely successful, while some won’t, but no matter what your ambition or industry of choice, there are some universal principles that can be applied to business journeys of all types and sizes.

Here are the top five questions every prospective entrepreneur should ask themselves before they take the leap.

1. Are you ready?

Having a big idea is essential, but it isn’t enough on its own. The best idea is the one you develop into something special by combining your skillset with your interests. Good ideas are more common than you think and they are no good in your head. If you don’t have the skills and experience (or money to pay someone who does) to bring your idea to life it might be better to move on to the next one.

2. What should you expect?

The odds are generally stacked against new businesses. Over 600,000 businesses a year (10.8% of the total) were predicted to fail in 2020 – and that was before the pandemic. That is around 1,700 businesses every day.

These figures are unlikely to discourage budding entrepreneurs, but if you’re planning to start a business you should understand the risk and try to learn from the mistakes of others as well as your own. Unless you’re extraordinarily lucky, you’re likely to make a few wrong turns along the way, but resilience is key. It took 5,126 prototypes before James Dyson produced his eponymous vacuum. The message is: stick at it and learn from your mistakes.

3. How will you fund it?

If you’re not already well funded, you’ll have to figure out how you’re going to fund your business. If you want to keep control of your enterprise, you are probably best starting small and proving your track record. Before getting involved with bigger investors you will need to figure out what you are willing to exchange for investment. Is it control of strategic, equity or voting right? There isn’t a wrong answer, but it’s worth setting some limits as many partnerships have gone south because the business drifted away from its original vision.

4. Who will you work with?

No founder is an island: be influenced. It might be that you have a great mentor, team, or business partner – or all three. Does your business partner have a similar style or one that is your inverse, filling in your weaknesses to make a stronger team? Much like when seeking funding, business partnerships need clear boundaries. I co-founded GuideSmiths with Felipe Polo and our relationship has thrived through communication, trust, and respect. It won’t always be easy and remember you’ll most likely be seeing this person more than your family, so choose wisely!

5. What’s your long-term plan?

It might feel like your business takes a while to get going, but before long decisions that shape your future will start coming thick and fast. Long-term vision and a clear strategy are vital from the outset to avoid mission drift.

If you want your business to attain a steady revenue, the decisions you make will be different than if you plan for exponential growth and expansion. The latter of the two is likely to require compromise – to secure funding or to maximise revenues.

You may even be starting a business with the plan to increase its value and sell it down the line. This is a less-discussed path, but an equally viable one. In this scenario you will need to drive growth while also making your business as attractive as possible to investors. And if you do have a business partner, no matter what your plan, make sure that you’re both on the same page.

Ultimately, it’s the journey that is most rewarding. Listen to others, learn from your mistakes – and recover from them quickly – and reach out to your peers for advice and support.