Schooling startups in business survival skills
Inspiration Many new enterprises fail for lack of basic business skills rather than a bad business plan, so they need to get properly trained for life in the economic jungle.
However much expertise, energy and commitment a new entrepreneur may have, it is not enough to ensure success. They also need to understand how to market and sell their product, how to manage cash flow and all the boring form-filling that goes with running your own business.
All these skills can be learned, however, says Warren Cass founder of the membership organisation, Business Scene, which provides access to services such as accountancy, customer relationship management and human resources, as well as advice and mentoring.
"Nearly half a million businesses start up every single year and the vast majority fail by year three or four," he says. "Some weren't sanity checked in the first place but for most things go wrong in their business processes or experience poor cash flow. We are definitely not inventing new ways to fail, so surely we can teach how to avoid the pitfalls."
The main problem is that entrepreneurs starting out for the first time usually lack practical business experience. Warren says: "Typically founders of new businesses are very good at their core competency but not necessarily very good at running the business processes around it."
Happily, the days when budding entrepreneurs regarded mentoring or coaching as trendy buzzwords are over, and they want to learn.
"We are seeing a real awakening of coaching in the UK. Ten years ago it was a swearword at networking events - if somebody called themselves a coach people ran for the hills, but culturally there has been a change and people know they need the right advice and help" - Warren Cass.
The next step is to improve the amount of information available. In the past, start-ups could get a lot of advice from government but cuts are taking their toll, such as the closure of the Business Link website which was combined with DirectGov to save costs. The responsibility for nurturing small business startups now rests with big business, Warren believes. "It is really essential for the support organisations to go above and beyond giving lip service benefits and really helping businesses understand what success looks like."
Warren sees hopeful signs that the big suppliers of services to small businesses, such as the banks and the major accountancy firms, are actually listening to their clients. "They are adopting a much more consultative approach, talking to their clients to fully understand requirements, give proper advice and if they haven't got the right product they have a new tendency to walk away, rather than just sell them stuff."
The web is now a vast repository of knowledge for startup businesses, from basic accountancy, marketing and sales to financial planning and growth management. For example, Business Scene is launching a new initiative called Champions of Small Business that aims to guide fledgling entrepreneurs to the right places for advice, including articles from prominent entrepreneurs to explain and inspire.
"With Champions of Small Business we are creating a resource where people can take the experiences of others who have been there, done it and got through it," Warren explains.