A common misconception about starting a business is that funding is the most important part. But, according to Richard Branson, there are other things that need to be considered also.
“While there’s no doubt that having a reliable source of capital can be extremely helpful, cash injections won’t magically transform a bad idea into a good one, nor will they make up for not knowing your market inside out,” the Virgin Group founder says in a recent blog. “Remember: some of the world’s biggest and best brands (including Virgin!) started with just a small amount of money, but an abundance of passion and drive.”
It’s more important, Richard says, to make sure that the product or service that you’re developing is one that people actually want. “At Virgin, we’ve always kept this prerequisite uppermost in mind when developing new businesses. We’re not always inventing new products, but we’re always spotting gaps in markets and determining where we might disrupt an industry. When we find opportunities, we want to swoop in and make the most of them to delight and surprise our customers,” he says. “Simply put: a start-up can be flush with capital and create the best product in the world, but if there’s no demand for it, the enterprise won’t succeed.”
He adds: “It can be tempting to want to open your business sooner rather than later because you fear that somebody else will get there before you do.
“But first you need to measure demand. This could be as simple as asking potential customers what they’d like to see offered and what price they would pay for a certain product or service. You could even just start your business small, with a few core products to test the waters before you deal with capital and suppliers.”
While doing this, it’s important to make sure that you’re working as efficiently as possible. “You want to be extremely wise with your time,” Richard advises. “Especially when just starting our, since you might be balancing another job while trying to learn quickly about how to run things on your own.”
Richard says that using his time efficiently is something that has stayed with him over the decades in business. “I multitask a lot, and I try to keep things fun – in fact, whenever possible, I hold most of my meetings while walking. Also, I use my travel time to organise my notes, sort email and write,” he explains. “I even interviewed Josh Bayliss, our Virgin Group CEO, in the backseat of a car on my way to another appointment!”
For this reason, Richard says it’s important to surround yourself with the right people. "I always say that you should hire people who are better than yourself at certain facets of business, then let them get on with running it. Not only does this make your company run more smoothly, it also frees you up to think about the big picture, or even your next business."
However, the most important thing that you need to hold on to as an entrepreneur is passion. "Stating up is often tough, and having a great deal of passion means that you’ll persist when things seem like they’re not going your way," Richard says. "Every budding entrepreneur needs to ask himself what’s at the heart of the business - what’s the thing that drives you? If the answer is simply ‘to make money,’ I can tell you now that it’s probably not enough to keep you hanging in there."
He adds: "one thing we’ve always found hugely important when starting up new Virgin ventures is to have fun and remember that business itself is an adventure. Running your own enterprise gives you an unrivalled opportunity to do something you love while enjoying the journey. Good luck!"