Risky Business: Taking the leap and becoming an entrepreneur

By Natasha Culzac
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Wonder how a successful entrepreneur makes their very first move? Learn from those who've done it.

If you’re a working professional you’ve probably pondered “I just want to enjoy what I do, is that too much to ask?” at least a few hundred times. And usually at 8am on a Monday morning. But even for those with an entrepreneurial spirit, packing in the stable safety net of a job to pursue a freelance career or start a business can feel like jumping off a cliff into the unknown. How do people take that leap? And is it worth the risk?

Against all odds

Obviously not every story of successful entrepreneurship is a rags-to-riches one, but some of the most inspiring are. From Lord Alan Sugar, who went from East End council estate to billionaire technology tycoon, to Jan Koum, a Ukrainian immigrant to the US who made ends meet by sweeping a store’s floor as a teenager before founding WhatsApp.

Rising to these lofty heights, in the face of adversity, can seem like an unwinnable task, yet these tales prove that it’s not totally impossible.

Small scale

Most of us, however, just want to be financially comfortable doing something we don’t resent. Very few of us dream of a bank balance flashing a dizzying number of 0s. Instead, the dream is to simply go it alone to start and maintain a small business. According to the government, the number of self-employed increased from 3.8million in 2008 to 4.6million in 2015.

The first step is to find something you’re passionate about; something you can live and breath day in and day out.

How they did it

Sebastian Stobbs and Tomoya Hiramatsu are the founders of Conquer Gear, an ethical fashion label which sells artists’ works on t-shirts, bags and prints. Describing his sense of dissatisfaction upon graduating from art college, Sebastian said: “It was in searching for a creative outlet which gave us some freedom and pride that I came up with the idea of applied art onto consumer products.”

Annoyed by the issues of sweatshops and environmental disasters caused by clothing manufacture, Sebastian wanted to create ethical and organic products that were intellectually stimulating, while also creating awareness for greener consumer actions. “It was a hopeful punt that we might be able to wing the business side of it and make a crack at something made by ourselves.”

The two of them held down 9-6pm full-time jobs while trying to push the business but said that “many mistakes were made in the early days because of lack of knowledge and preparation in the business area”. He also found that relying on other people held them up. Having failed to get others involved they bit the bullet and created £2,000 worth of product, got a stall in Spitalfields Market in London and flogged the items. The profit from these sales was ploughed back into making even better products. “I did it as a hobby over the next year or two taking no income until I decided it was now or never and I ditched the other job in the hope I could make it pay for my time,” Sebastian said.

He admits that he was quite naive when it came to starting his business, but that he had the help of a knowledgeable family friend to guide him, and a book-keeper mother who explained expenditure and tax returns. He adds: “It’s a mixture of luck and sheer determination on my part that I'm still here today doing this.”

Sage advice

Edmund Caldecott, the owner of Spoken Ink Media, initially funded his venture with money saved from his full-time job and then a £5,000 investment from his parents. Professional investors got involved later. He said: “Everyone will tell you how dreadful your idea is. You have to perform the difficult juggling act of listening to the wise advice while ignoring the naysayers.”

His top key things to think about, for those wanting to start a business is:

1. Will power. Do you really, really, really want to do this? Can you be bothered to get out of bed when there is nothing to do and think of something to do?

2. What’s your money-method? Business models are long-winded things but methods you should be able to sum up in a sentence. Are you piling it high and selling cheap? Are you trying to build a small cash cow or a money-losing megalith that you can float for billions on the stock market? Are you creating high-end value for a small market? Are you selling the same thing to the same customers?

3. All businesses are not the same. Successful capitalists will tell you that selling pencils is the same as selling books. Entrepreneurs know that this is nonsense. Yes cash flow, retained profits etc are important but at the very beginning all you have are huge dollops of hope, people and good ideas. You’re in some part responsible for all three.

4. Learn from your mistakes.

5. Always be charming. Nobody wants to work for or with someone they don’t like.

6. Don’t work with people you don’t like.

7. Employ people who are better than you.

8. Be stingy with your equity. At the beginning it will seem that you’ve got lots of money and an open road but later on you’ll be demotivated if you haven’t kept a healthy wedge of equity.

9. Dip your toe before you jump. Don’t waste time and money by building/creating/starting something you’re not certain that people want.

10. Get an accountant and use Xero online software – it made my life so much easier.

11. Get a partner. When you’re doing badly they’ll commiserate and then when you’re doing well you can share in the glory.

Helpful links:

Inspiring books:

Inspiring books:

 

1. The Lean Startup:How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (Eric Ries)

2. The Four Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich (Expanded and Updated): (Timothy Ferriss)

3. Rework (Jason Fried, David Heinemeier Hansson)

4. How to Win Friends and Influence People (Dale Carnegie)

5. Think and Grow Rich (Napoleon Hill)
6. Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way (Richard Branson)

7. Hard Drive: Bill Gates and the Making of the Microsoft Empire (James Wallace, Jim Erickson)
8. Thrive: The Third Metric to Redefining Success and Creating a Life of Well-Being, Wisdom, and Wonder (Arianna Huffington)

Top Takeaway

Going it alone can be a scary prospect and you need to fully understand the risks involved. You may lose any investment you initially put up to get your venture off the ground, but if you do your research and work with people who know what they’re talking about then these risks can be mitigated.

 

By Natasha Culzac

Thanks to a journalistic career history and a childhood at Sylvia Young Theatre School, Natasha has her fingers in a few professional pies, doing her best impression of a model and actor as well as personal finance writer. Outside of work she compulsively watches BBC period dramas and constantly lies to herself that this year will be the year she learns French, once and for all.

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