Starting a business is something we’ve done a few times at Virgin – hundreds of times actually, across more than 40 years. How do we manage to see these new businesses through from ideas to realities and into successes? Keep reading for my seven top tips.
Write a business plan
Having a clear idea of what your business will do and what it stands for is essential. You should be absolutely clear about what your product or service aims to do, and who is going to buy it. I’ve never made a formal business plan, but always created an executive summary – in less formal terms, a short paragraph that sums things up (and when I say short, I mean it: I’ve been known to scribble on a napkin or the back of an envelope). Virgin StartUp has created a wonderful business plan for entrepreneurs – simple and stripped down to just 18 questions, it asks for the information that’s essential when building a business. Once complete you’ll have the blueprint that will lead you on your way to growing a successful business.
Validate your business idea
Before you plough money and more importantly your time into your business, the most important thing you should do is prove that your idea can work. We’ve done this time and again at Virgin. Before we opened our first Virgin Records store on Oxford Street, we sold records via mail-order while running Student magazine. The orders rolled in and proved there was a market for the business, which led us to start the shop. Other ways to validate an idea include crowdfunding and market research. Starting small and protecting the downside allows you to move onto the next idea quickly if your original one doesn’t prove viable.
Do business with big business
Winning a contract with a big business can champion growth for any start-up. And luckily, so many big businesses are currently looking to stay nimble and be disruptive, and are therefore eager to work with small business and start-ups. At Virgin we work with start-ups across all of our companies – from stocking astronaut ice cream in the mini bar of Virgin Hotels Chicago, to handing out Peppersmith mints on Virgin Atlantic flights. If you’re interested in learning more about how procurement works, check out our Doing Business With Big Business event by Virgin StartUp.
Do well, by doing good
Millennials are currently the largest living generation on the planet. Millennials expect more from businesses than simply products or services. Start-ups that put purpose at the heart of what they do will have the most success in 2017. Embedding purpose into your business will help it to stand out, and align it with customers who have the same values. At Virgin we believe that business can and should be a force for good, and this purpose is clear in everything we do. Read more about our purpose and the work we are doing at Virgin Unite.
Find a mentor
Finding a mentor is probably the most important thing you can do when starting a business. I’ve had many great mentors throughout my career. Learning from someone else’s mistakes and successes can be a valuable tool in your business armoury. If you’re looking to find a mentor, choose someone you admire. We strongly believe in the power of mentoring at Virgin StartUp, and match every single person who receives a Start Up Loan with their own personal mentor.
To succeed as a new business you need to be disruptive – it’s the key ingredient that drives growth. Thankfully, with the explosion of new technologies, the ability to be agile, nimble and challenge the status quo is becoming easier than ever. We’re all about disruption and innovation at Virgin, and host Virgin Disruptors events to create tangible change across the world of business.
Stay on top of your finances
Poor cashflow is the biggest killer of start-ups. A recent study showed that as many as 82 per cent of start-ups fail due to poor cashflow management. In the early days of Virgin we came very close to the bank closing us down due to cashflow issues, and it ultimately became the reason why we had to sell Virgin Records – to free up cash to make Virgin Atlantic a success. To help you best manage your cashflow check out Virgin StartUp's guide to creating a financial forecast.
Do you have a tip for how people can give their business the best chance of success in 2017? I'd like to hear it in the comments below.