Professor of Enterprise and Director of the Leeds Enterprise Centre
at the University of Leeds.

Top tips for Starting a Business (5 & Good luck!)

June 22nd, 2014

Top tip Five: Don’t be a busy fool!

It’s all too easy to think the difference between the price the customer pays and the cost is the profit. Of course, it is true that if the sales price is greater than the cost price, you are making a gross profit on each sale. But what about the cost of being in business? All the overheads, operating costs, wages, fees, interest on loans and something for you to live off! How many items to you need to sell to produce enough gross profit to cover these? (The turnover less cost of sales = gross profit). And what is left after this is the net profit. What is the point of working really hard on your business only to make little or no net profit? Or in other words being a busy fool!

So, it’s really important to charge the right price. But how do you determine this and quickly? You could look at competitors or ask customers. There is a thought that you should test the market at an early stage and learn quickly from this.

I remember meeting a serial entrepreneur whose first business was selling large foam hands at football matches. He and two friends stood outside different gates selling at different prices. They called each other to see at what price point the hands stopped selling than all sold just below this price. That was his first of many businesses.

Once you have got your price right and the cash is coming in, you will need to start collecting information and thinking about scaling your business operation. This is all sounding rather complicated! Don’t worry help is at hand. Week two the Starting a Business free online course is all about designing a scaleable business, understanding accounts and getting the money you need.

So, the five ways to build a successful business?

  1. How does information flow around your business?
  2. What are your key financial indicators for your business?
  3. Turnover is vanity, profit is sanity!
  4. Who you know that good help you?
  5. Cash is king or queen!

And Finally: Good luck!

I hope you enjoy the Starting a Business free online course and meeting our team of enterprise educators, student entrepreneurs and experienced business advisors. Through the enterprise opportunities at the University of Leeds you could become a business leader of the future. Our dedicated courses and discovery modules, competitions and scholarships will help you to turn your business ideas into a reality. Find our more on Enterprise at Leeds website.

Professor Nigel Lockett
Professor of Enterprise at Leeds University Business School

Starting 30th June Starting a Business free online course

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Top tips for Starting a Business (3 & 4)

June 22nd, 2014

Top tip Three: Business is personal!

It would be easy to get the impression from the media, just think of the Dragons’ Den panel, that entrepreneurship is all about the heroic entrepreneur. Of course, the founding entrepreneur plays a vital role in starting a business. We know that entrepreneurs share certain characteristics including the ability to recognise opportunities, the need to achieve, are over-optimistic, are prepared to take risks, like autonomy, feel that they can control things, are gregarious and creative. Not all entrepreneurs have these characteristics or have them in equal measure. We also know from research that they are born with certain attributes, have a family background and through life gain experience and build networks – all of which contribute to their values.

Maybe it’s just easier to remember one person and believe that they have all the innate abilities to launch and run a successful business. The reality is somewhat more complex. In his autobiography Richard Branson, perhaps the best-known entrepreneur mentions, all sorts of people how have helped in along the way.

It’s worth reflecting on your own entrepreneurial characteristics, traits and behaviours.

Top tip Four: Network, network, network

Assuming you are like everyone else, it is worth considering who you know and how they might be able to help you with your business. Not only is a problem shared a problem halved, it’s far easier to build a successful business with the right team and the right extended networks. It is surprising how willing people are to help you – especially if you are happy to help them.

In his book, Against the Odds, James Dyson, the famous inventor, mentions all the people in his network who have helped him. From a member of his tennis club to a network of talented designers. So, building and and maintaining networks looks like another important entrepreneurial skill. So to is understanding team roles and how they work.

 There are eight team roles: Chair, team leader, innovator, monitor-evaluator, team worker, completer, Implementer and resource investigator and five stages of development: Forming, storming, norming, performing and adjourning! Sound complicated? Don’t worry, just join us on the Starting a Business free online course and we will explain all.

So, the five ways to build a successful business team?

  1. What are your best characteristics for being a successful entrepreneur?
  2. And which are weak in or missing?
  3. Learn as much as you can about teams.
  4. Start getting involved in teams and watch how other people behave and the team develops.
  5. Do you spend enough time building and maintaining your network? Remember to give as well as receive!

Professor Nigel Lockett
Professor of Enterprise at Leeds University Business School

Starting 30th June Starting a Business free online course

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