The benefit of traction

While the phrase ‘traction’ has typically been associated with tyres, friction and slippery driving conditions, its use is increasingly common in entrepreneurship and venture capital circles. This article explores what it means and how it applies to your business.

Defining Traction

The typical entrepreneurship journey moves through various stages, from idea conception tobusiness plan to execution and then growth (or failure). For most entrepreneurs, the journey is challenging because they need to perform many activities simultaneously while always being conscious that they may run out of money in the near future. To fund this gap, investors often turn to early stage investment, which they are more likely to get if they can prove traction – some clearly identifiable momentum and progress so far.

Investors need to carefully balance risk and return and will be well acquainted with the harsh realities of early stage investment, i.e. that most startups fail. As a result, they will be trawling through the evidence you provide (often in the form of a business plan) to assess whether or not a commercially viable business opportunity exists in which they should invest.

For the most part, investors will need to take a leap of faith with early stage investments, relying on the assumptions contained within your business plan to help them decide whether or not to invest (and if so, on what terms). If you, the entrepreneur, can demonstrate that you have gained some traction, especially by proving customer demand with a record of actual sales, you are essentially reducing the risk for them; factual evidence will always trump assumptions, projections and wild conjecture.

The most persuasive evidence you can provide that your business is worth investing in is ‘evidence of demand’. Clearly if this demand is translated into sales, you have irrefutable evidence that the startup has traction. The greater the sales, the greater the proof.

In terms of the ‘traction hierarchy’, active users and letters of intent probably fall into the next tier, below real sales, finally followed by viewer numbers (on your website). While growing visitor numbers to a website was once a good barometer of the potential of a business, it is no longer considered a valuable proxy. These visitors have to convert to sales and, hence, the focus returns to the one piece of evidence that trumps all others – real sales.

Why is all of this important?

One of the problems entrepreneurs face is that their energies and focus are spread widely, as they can get distracted by the most pressing challenge to hand (regardless of its relevant importance in the bigger picture). There is so much to do and so little time. Hence, they can have an excessive product orientation, focusing predominantly on product design, without really addressing wider concepts such as addressable market size, customer acquisition costs and sales forecasts, etc. Business plans can really help ensure entrepreneurs retain focus. They force you to take a holistic view of your business opportunity. However, not all entrepreneurs embrace the principles of business planning, and even those that do may not have a strong focus on ensuring all activities are correlated with the core aim of gaining traction.

Entrepreneurs need to conclusively demonstrate that there is strong evidence of demand. They need to concentrate efforts on the area of product /market fit, a concept Steve Blank has explored in detail in his book, The Four Stages of the Epiphany. Blank states that the primary role of an entrepreneur is to iterate and test assumptions and hypotheses they have made with regard to customer behaviour and demand until they find a commercially viable business model.

‘Your startup is essentially an organization built to search for a repeatable and scalable business model.’

Learn more about Internet Marketing 360 at https://360.com.sg

Do You Should Approach the Dragons Of Entrepreneurs

The Dragons’ Den is one of the more popular business programmes on the BBC, with average viewer numbers in excess of three million . The format is pretty simple – entrepreneurs pitch the dragons (wealthy investors) with their business plan. The entrepreneurs are looking for investment (as well as advice) in return for an equity share in the business. Now in its 9th series, the show has been going from strength to strength. However, what is not always evident is that many of the so-called “successes” often represent bad deals for the entrepreneurs, where they give away too much equity in return for modest investments. This is typically the case in instances where the proposition has already been de-risked by way of existing trading history, letters of intent, sales etc., or where you need the cash to fulfil orders, or to expand.

If you have a serious business proposition (and I use this phrase deliberately, as some entrepreneurs are clearly selected based on entertainment potential), you should adapt a very different strategy in the Den. You should use the opportunity primarily as a marketing exercise where you are in effect pitching your product or service to the British public at large. In many cases it is likely that appearances on the show will result in significant interest afterwards. (Given the BBC recognises this, it is likely they will try and dumb down any overt marketing). Here are some tips as to activities you need to undertake prior to appearing on the show so that you can maximise your return.

1. Ensure your website is up-to-date (and can deal with a traffic spike) and that the phone lines are well staffed. The increase in profile from TV will result in a significant increase in interest in the days following the show.

2. Unless you get an offer from the dragon you target (and on your terms), walk away. While there is definitely a premium to their money in terms of media interest, they will be exceptionally busy investors and may not bring enough to the table aside from the cash.

3. After the show, it is important to use your new-found fame (which may be short lived) to engage with more suitable investors who can provide smart money on more attractive terms (i.e., the cash you need at the equity share you want to give up) as well as access to distributors/ retailers or to key contacts.

4. Use PR to leverage your appearance on the show. All media like an angle, and given the importance of popular culture, an appearance on a “reality” TV show should open many doors. It is good to work on a number of stories to help you gain additional exposure after the show.

5. Undertaking an analysis of the appearance by Ling Valentine (who “entered the den” in February, 2007) would be a worthwhile investment of your time. Ling gives a detailed summary of her appearance on the show on her website and also demonstrates that she is an extremely shrewd business person as well as a great marketer. Explaining her decision (not to take investment), Ling says the following:

“All I could think about was that I could get that cash in 30 seconds from the bank for no equity stake, and that I could not face giving away a third of my business for that, I had a proven business and they had no risk! After the Den I had some regrets, mainly wondering if I had lost out from not working with Duncan and what I had potentially lost from Richard’s end-game expertise, but since my episode aired I have been incredibly busy.”

Indeed, her appearance sparked immediate interest:
“Web visits on the night of the broadcast were over 5,000 people, and the next day it was over 10,000. I spent the whole night trying to stop my server crashing”

In summary, if you have a serious business proposition, where external parties (ideally, customers) have validated it as being serious, you will be better served using the opportunity as a means to raise your profile rather than as a means to raise finance.

The Effects of Social Media For Your Business

download-28Decisions are never straight forward. We all have to make decisions armed with the best information at our disposal at a particular point in time, weighing up the Pro’s and Con’s before deciding on our chosen course of action. However ‘best information’ does not of course equate to ‘complete’ or ‘accurate’ information and many decisions are made under time duress or with incomplete information. On top of these issues, commercial decisions impact a wider group than most personal decisions and these decisions are often deconstructed publically (despite the obvious information asymmetries) unlike most personal ones. There is also a growing tendency for commentators to pre-empt commercial decisions e.g. witness recent media discussions re whether the European office of Twitter will be in London or Dublin . Similarly the ‘losers’ of decisions increasingly attempt to influence the decision seeking reversals . This article seeks to explore these issues in more detail before suggesting some things to think about if you face similar situations to those described below.

Managing Change

Managing ‘resistance to change’ has been a popular academic topic for many years. In 1979, J.P. Kotter and L.A. Schlesinger wrote an article in the Harvard Business Review called ‘Choosing strategies for change’ which sought to offer practical advice to managers dealing with resistance to change. However the concept goes back a little further as the quote from the 15th century Italian philosopher Niccolò Machiavelli illustrates:

“It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones. “

What has changed in recent years, however, is that external resistance can now be much more widespread and powerful than mere internal resistance and as a result managers have to make decisions in this wildly changed context. In many ways this change has been driven by the growth of social media which has enabled everyone to have a voice, and anyone with access to an Internet connection an ability to publish.

The Effects of Social Media

Where once people merely consumed products and services they now inform the feature set as active participants in the production as any software developer will confirm. Where once they solely consumed content, they now often add to the narrative with most online publications including commenting platforms enabling anyone to participate in the discussion. While these comments can really enrich the content, they can also often poison it when individuals hide behind a cloak of anonymity and post inappropriate comments or critiscms typically without full disclosure. What we say and do has never been subject to as much scrutiny as it is these days. Similarly the law of ‘unintended consequences’ also has a habit of coming into play when we least expect it. The following represent some recent examples of commercial decisions made where the backlash was very public.

1. Startup Britain

Startup Britain was launched in a blaze of publicity in March 2011. The aims of the website were indeed worthwhile ones, as the website sought to support and advance the cause of entrepreneurship in the UK. However soon after launch, blogs and forums were full of scathing comments ranging from criticism of the features to criticism of Mr Cameron’s involvement. The ‘Create a Logo’ feature was one immediate victim of the backlash and the (foreign) 99designs.com offer was quickly replaced with a link to the (local) DBA homepage .

2. Gap

US clothing retailer, Gap ditched its new logo within one week of unveiling same following an ‘outpouring of comment’ online. Apparently more than 2000 comments were posted on their Facebook page, many of which ‘demanded’ the return of the original, a wish which was duly granted.

3. Zipcar

Following Zipcar’s $50m IPO in April, some critics argued that the institutional investors had significantly under priced the deal. “Zip Car’s IPO Underwriters Just Screwed The Company To The Tune Of $50 Million” screamed the headline in a post on Business Insider by ‘Editor-in-Chief’ Henry Blodget .

Other examples where there has been significant ‘public outcries’ include; Spotify’s recent decision to cut back their ‘Freemium model’ limiting the number of free plays the user can listen to , and the unveiling of the London Olympic Logo which some commentators described as ‘puerile’ .

How to deal with a backlash

As the above examples illustrate, decisions made by known brands (in particular) can attract the most intense reactions often from the most unexpected quarters. Here are some things to consider when faced with external resistance.

  • Make sure to get impartial independent feedback where appropriate so you can ensure a full sanity check before a launch/ or an announcement.
  • Remember you have access to more data than the critics i.e. some of this data is commercially sensitive or is not in the public domain so they do not have the ‘full picture’.
  • Some decisions will never be well received, particularly ones where services that have been free suddenly incur charges. Well rehearsed and logical responses can be prepared well in advance.
  • Be prepared to reverse your decision when either new evidence emerges after the fact. As British Economist John Maynard Keynes once said in response to accusations he was flip-flopping on some issue: “When the facts change, I change my mind. What do you do, sir?
  • You do not have to engage in a dialogue with the public – particularly when faced with criticism from anonymous commentators with undisclosed interests. However be prepared to overturn a decision when faced with over whelming resistance (as distinct from a vocal minority) from fully transparent critics with well argued cases.
  • Do not rush to judgment. A backlash does not mean a bad decision. The London Olympic logo was not withdrawn despite the barrage of criticisms it attracted when launched.

Whats the best for your business

While running a small business is very rewarding, it is not easy, yet more and more of us are being enticed into starting a business, encouraged by an increasingly supportive government, which promotes entrepreneurship at every opportunity. This is good news after all; as entrepreneurs innovate, we as consumers benefit as they produce products and services that better meet our needs. Governments benefit through a greater tax take and lower social welfare costs (as well as gaining from numerous other additional benefits arising from the effects of the ‘invisible hand’). Everyone is a winner.

A Key Challenge

However, on an individual basis, a key challenge for most entrepreneurs is dealing with the sheer range and diversity of issues that they have to address when all most want to do is simply, to sell. Their knowledge base must not only span their industry sector but must cover a breadth of functional topics and issues from marketing to cash-flow management to taxation.

While bigger companies will typically have access to this knowledge in-house, smaller businesses do not have that luxury and hence have to rely on their network as well as search engines, blogs, websites and business forums for answers and help.

Social Media

One of the benefits of the growing ubiquity of social media is that information related to pretty much any subject area is available for free on the Internet, making it a lot easier to access than before. The quality of information that is available for free is significant and search costs are exceptionally low, resulting in unfettered access to solutions to your every business problem.
But all is not as straightforward as it seems. Information gleaned from these sources is not without its drawbacks, not least the fact that, for the most part, you do not know who you are gaining the knowledge from. (This was graphically illustrated in the famous Dilbert Cartoon – ‘On the Internet, nobody knows you’re a dog’).

Some of the following issues also apply:

  • How can you assess the veracity of the information?
  • How do you ensure the impartiality of the content?
  • How do you take general advice and apply it to your own particular circumstances?
  • What if you rely on information and then act on it to your detriment?

Firstly, taking information at ‘face value’ is rarely a good thing. Consider each bit of advice as a mere data point as you seek to gather information to make a decision. You should also seek out articles supported by facts with clear attribution to source data where you can substantiate claims.

Secondly, it is important to assess the nature of your inquiry, relative to the risks associated with the decision to be made. Information gleaned from a search engine or website is no substitute for ‘paid for’ advice when dealing with legal or taxation matters, for instance. While we have all become accustomed to using search engines for information searches, we must not lose sight of the fact that nurturing a wide network of contacts whom you can call for advice is a better use of your time than surfing the net for solutions to more complex issues.
It is also worth considering the context of the information. Is it on a commercial site where the author has a commercial agenda or is it on an informational site like Wikipedia where the content is curated by a number of contributors? Articles written on branded websites, with full author accreditation (and clear domain expertise), trump anonymous postings on poor-quality websites every time. However, you must remember that, unlike professional advice, there is generally no come back if you rely on erroneous information and you suffer damages as a result of acting on it.
As an entrepreneur you also have to constantly weigh up the costs of a decision and need to become comfortable dealing with incomplete information. As Venture Capitalist Mark Suster eloquently puts it:

How to success on online marketing

Spam is any message that you send electronically to lots of people who have not specifically requested mail from you — in other words, junk email. Like a telemarketing call during dinner, spam almost always annoys, and sometimes offends, those who receive it. While sending spam may result in a sale or two in the short run, it will almost surely damage your reputation, so it’s good advice to stay clear of it. There are many better ways to use email to keep in touch with current and potential customers. Here are a few of them:

  • Invite people to subscribe to an email newsletter instead of sending unsolicited emails. Have a sign-up form on your website and explain that you’ll send only timely, informative email to subscribers.
  • Include late-breaking, useful information in the email you send to subscribers. Because it can be delivered so quickly, email is a perfect vehicle for alerting people who are already part of your community to new and interesting developments. Even a modestly self-serving message will go over well if you package it with enough truly unique and valuable content. Just keep the hype to a minimum.
  • Make it easy to quit receiving email. Every message should include brief, friendly instructions for getting off your mailing list. Even people who keep subscribing will appreciate knowing that you’ve made it easy for them to say, “Enough already!” when the time comes.

Start where you are

If you’ve decided to jump into online publishing — putting out an online newsletter, magazine or other content that will interest your business’s customers — you may think that designing your website is your biggest challenge. But that’s the easy part. Much trickier is gathering an audience that will sustain the publication. Here are some tips on building a loyal audience for your site.

Start where you are
The Internet is a surprisingly personal place. A thousand people, each with unique personal interests, can spend the same 60 minutes online together and never come close to crossing paths. It follows that the key to Web publishing success is forging a lasting personal connection with people based on your own skills, interests and contacts. In other words, the best place to start is with the connections you already have online. Then use those connections to build a community of like-minded people and keep expanding from there.

Your own interests and expertise are your strengths as a publisher. Study the information that is already available in your niche, looking for gaps you can fill. Then, fill the gaps with valuable information nobody else provides. An example is www.businessbricks.co.uk a small business advice website in the U.K.

Your goal should be to create unique, valuable information that meets the needs of your targeted audience. On the Internet, there are many ways to provide that information that aren’t available to print publishers — for example, you can offer searchable, interactive databases and encyclopedias.

One online publisher, for example, is creating an online publication about his passion, electric vehicles (EVs). In his spare time (he’s a magazine editor), he’s been using his skills as a journalist to study the EV market, scoping out who the players are, what they have to say and how the industry is developing. He also travels to auto shows to test drive new cars, combs the Internet for information about EVs, and studies the technical literature about EV engineering and design. Now, using all of the connections he has developed and the information he has gathered, he is ready to launch EV World online.

Work Your Niche
Get to know the online habits of your prospective audience. What other sites are they likely to visit? Make a list and try to develop a relationship with each one. There are a variety of ways to do this. Your best options include offering to write articles (informative and not self-serving) for other sites, or posting messages with your Web address on their bulletin boards. Trade links and adverts with other sites in your field, and if you can afford it, buy classified adverts at related sites.

One web publisher doubled her traffic by spending two months (and a small amount of advertising money) working through all the sites in her niche in this way. Another got similar results by hiring and supervising a Net-savvy college student.

Don’t neglect offline ways to publicise your website. Send press releases and emails about interesting features on your site to print as well as online media in your niche. List your Web address wherever you also list yourself — business directories, professional associations, and chambers of commerce. Speak at trade shows or conventions.

Work the search engines
Lots of people will find — or not find — your site by using online search engines such as Google, where they type in the words they’re searching for. You need to do a little work to make sure your site will turn up when a potential reader conducts a search. Here are three good places to go for tips on making your site stand out to search engines.

  • SEARCH ENGINE WATCH
    http://www.searchenginewatch.com) is an online newsletter that offers comprehensive, practical tips about making a site that search engines can find. There are also some good links for Webmasters here.
  • THE WEB MARKETING INFORMATION CENTER
    (http://www.wilsonWeb.com) has several articles including one called A Web Marketing Checklist: 23 Ways to Promote Your Site by Ralph Wilson.
  • THE TRAFFIC TRIBUNE
    (http://www.submit-it.com) is a newsletter covering the search engines and how to make a hit with them.

Use banner exchanges
An organised program of exchanging banner adverts is a way for sites with modest traffic to break into an ad revenue business. Banner exchange programs work like this: You join an advertisers’ group, called an exchange, and trade banners on your site with other exchange members. You can specify where you want to run your banners, and the exchange takes care of all the bookkeeping. Members get detailed reports about when and where their adverts were run so that they can measure their effectiveness. Each member makes available slightly more ad space than they use themselves, with the exchange selling the excess stock for a small fee to other advertisers. That’s how the exchanges make enough money to cover their operating expenses.

Personal liability for business debts

What the sole trader needs to know

A sole trader is a business that is owned by one person (and sometimes his or her spouse) and that isn’t registered as a corporation or a limited liability company.

Sole proprietorships are so easy to set up and maintain that you may already own one without knowing it. For instance, if you are a freelance photographer or writer, a craftsperson who takes jobs on a contract basis, a salesperson who receives only commissions or an independent contractor who isn’t on an employer’s regular payroll, you are automatically a sole trader.

However, even though a sole trader is the simplest of business structures, you shouldn’t fall asleep at the wheel. You may have to comply with local registration, license or permit laws to make your business legitimate. And you should look sharp when it comes to tending your business, because you are personally responsible for paying both income taxes and business debts.

Personal liability for business debts
A sole trader can be held personally liable for any business-related obligation. This means that if your business doesn’t pay a supplier, defaults on a debt or loses a lawsuit, the creditor can legally come after your house or other possessions.

By contrast, the law provides owners of corporations and limited liability companies (Ltd’s) with what’s called “limited personal liability” for business obligations. This means that, unlike sole traders and general partners, owners of corporations and limited companies can normally keep their house, investments and other personal property even if their business fails. If you will be engaged in a risky business, you may want to consider forming a corporation or an limited company.

Paying taxes on business income
In the eyes of the law, a sole proprietorship is not legally separate from the person who owns it. The fact that a sole proprietorship and its owner are one and the same means that a sole proprietor simply reports all business income or losses on his individual income tax return.

As a sole trader, you’ll have to take responsibility for withholding and paying all income taxes, which an employer would normally do for you. This means paying a “self-employment” tax, which consists of contributions to National Insurance/ P.R.S.I, and making payments of estimated taxes throughout the year.

And if you do business under a name different from your own, such as Custom Coding, you must register that name — known as a fictitious business name — with Companies House. In practice, lots of businesses are small enough to get away with ignoring these requirements. But if you are caught, you may be subject to back taxes and other penalties.

How to Protect Your Business Ideas

People often ask if they can sell an idea for a new product or service to a company that will implement it. But ideas that can’t be protected are worth relatively little. I don’t mean necessarily legally protected, but at the very least, protected with marketing momentum, image, and awareness.

Relatively few of the well-known successful start-ups depended on the ideas. What matters is doing it, starting it up, getting it done. For example, when Apple Computer started in 1976, thousands of people had the same idea. Altair and MIPS were already producing. Every hobbyist club in the country talked about it in their meetings. Steve Jobs and Steve Wozniak, however, did it. They found the resources, contracted people, took the risks, and started it up.

There are plenty of good examples. Was Federal Express patentable? No, but they did it. Look at Amazon.com—it was a good idea, but very copiable. In that case they knew they had to move fast and gain visibility very quickly to pre-empt competition. McDonald’s?

There are companies whose main advantage is the idea. Kodak, Polaroid, and Xerox are examples, but these are exceptions, not the rule.

By the time you’ve had a good idea, so have hundreds or thousands of others.

So how do you approach a large company with a good idea? I say, simply, don’t; not until you have momentum. Sure, some ideas need larger companies to move them forward, but if your idea is that good and not legally protectable, why shouldn’t the big company move on it? Managers are charged with enhancing the value of the company they work for, and you’re saying there’s no patent, so why not? They aren’t bad people, it’s just that you don’t own the idea.

Besides, larger companies move very slowly, and unless you’ve proven the idea and developed the concept, it’s even harder to think they’ll do it better.

My advice is to build some advantage first, develop this idea, bear down, and make it work. After that, then you will have something to sell. Even without patents, you could have trademarks, service marks, and legal protection against people trying to trade on your company’s name and trademarks.

Think of it from the buyer’s point of view, for a while. Which would you rather buy, an idea, or a business? Turn your idea into a business that works, with sales and employees and a market position, and then you have something to sell.

Remember that there are almost always people proposing ideas to large companies, and you’ll have to make sure the contact in the company understands that you might have something that’s very worthwhile. It’s hard for me to think you can do that without building it first, then selling it.

Think about what it is you own that they would need your participation for—perhaps it’s your expertise or name in an industry.

*Disclaimer. NB these articles are for informational purposes only. They are not designed to be used as a substitute for legal advice.

How to Better On Business Plan

The following illustration shows a business plan as part of a process. You can think about the good or bad of a plan as the plan itself, measuring its value by its contents. There are some qualities in a plan that make it more likely to create results, and these are important. However, it is even better to see the plan as part of the whole process of results, because even a great plan is wasted if nobody follows it.

Planning is a process, not just a plan

A business plan will be hard to implement unless it is simple, specific, realistic and complete. Even if it is all these things, a good plan will need someone to follow up and check on it. The plan depends on the human elements around it, particularly the process of commitment and involvement, and the tracking and follow-up that comes afterward.

Successful implementation starts with a good plan. There are elements that will make a plan more likely to be successfully implemented. Some of the clues to implementation include:

  1. Is the plan simple? Is it easy to understand and to act on? Does it communicate its contents easily and practically?
  2. Is the plan specific? Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets?
  3. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals.
  4. Is the plan complete? Does it include all the necessary elements? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn’t cover the main bases.

Preparing a business plan is an organised logical way to look at all of the important aspects of a business. First, decide what you will use the plan for, such as to:

  • Define and fix objectives, and programs to achieve those objectives.
  • Create regular business review and course correction.
  • Define a new business.
  • Support a loan application.
  • Define agreements between partners.
  • Set a value on a business for sale or legal purposes.
  • Evaluate a new product line, promotion, or expansion.

No time to plan? A common misconception
“Not enough time for a plan,” business people say. “I can’t plan. I’m too busy getting things done.” A business plan now can save time and stress later.

Too many businesses make business plans only when they have to. Unless a bank or investors want to look at a business plan, there isn’t likely to be a plan written. The busier you are, the more you need to plan. If you are always putting out fires, you should build fire breaks or a sprinkler system. You can lose the whole forest for too much attention to the individual trees.

Keys to better business plans

  • Use a business plan to set concrete goals, responsibilities, and deadlines to guide your business.
  • A good business plan assigns tasks to people or departments and sets milestones and deadlines for tracking implementation.
  • A practical business plan includes 10 parts implementation for every one part strategy.
  • As part of the implementation of a business plan, it should provide a forum for regular review and course corrections.
  • Good business plans are practical.

Business plan “don’ts”

  • Don’t use a business plan to show how much you know about your business.
  • Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists. Years ago, people were favourably impressed by long plans. Today, nobody is interested in a business plan more than 50 pages long.

Products for Starting a New Business

Starting a business is an incredibly exciting time for any entrepreneur; however it can also be stressful with so much to do in so little time. The start-up phase is also characterized by significant expenditures against a backdrop of uncertain income. However, there are a number of products and services that can help you maximize your chances of success while also saving you considerable time and money. This article aims to introduce you to some of the less obvious ones that are available via the Internet. These products and services can help you set your business on the right path from Day One. While these recommendations will not be appropriate for all, those who need to bootstrap and build their business the hard way will benefit the most.

1. Create a website

Regardless of whether you intend to sell online or not, all new start-up businesses should secure a domain name and create a website as soon as they can. Thankfully, the cost of getting a site set up has fallen significantly over time and there are now a host of different packages and providers to choose from.

2. Download a profile of your industry

The factsheets, reports and guides from Scavenger are essential reading material for anyone starting up a business in the UK. The Business Opportunity Profiles are downloadable reports on specific UK industries. With over 800 reports in total, the range includes everything from ‘Children’s Day Nursery’ profiles to ‘Coffee Shop’ profiles to a profile on ‘Wedding Planners’.

Where: www.scavenger.net Cost: Individual reports cost around £5.

3. Set up your company accounts

One of the big challenges start-up companies face is managing cash flow. Insolvency is one of the main causes of failure for entrepreneurs in the UK. However, with some careful and appropriate financial planning, cash crunches can be avoided. While this in itself is an important reason for buying a bookkeeping package, there are countless other reasons ranging from the ability to manage invoices through to managing payroll. The two main recommended introductory packages are QuickBooks® Simple Start from Intuit® and Sage® Instant Accounts. View online demos before you purchase.

Where: www.sage.co.uk and www.quickbooks.co.uk Cost: From £43.97 at www.amazon.co.uk

4. Download business planning software

When you start up it is important to write a business plan to ensure you adequately plan the future of your business. The very process of creating a business plan is beneficial, not least because it forces you to take a holistic view of your company. Business Plan Pro is the best-selling business-planning software available. It is easy to use, saves time, and has over 500 sample plans to get you started. It is also available via download so you can get instant access to it and hence pay no postage and packing.

Where: Business Plan Pro is available from www.paloalto.co.uk Cost: RRP is only £76.99 for the Standard version and £127.99 for Business Plan Pro Premier.

5. Save costs on your phone

Using applications such as Skype together with a headset, it is now possible to make telephone calls from your computer at a very low cost. There is no need to commit to a monthly phone contract with line rental. Instead you can just pay as you go. You can also obtain a Skype number so people can call you back. However it is recommended that all start-up businesses do have at least one fixed line number they can be contacted on. Finally, you should also consider getting a portable number that is easy to transfer if you move offices.
Where: www.skype.co.uk Cost: Free

6. Protect your computer

Once you connect to the Internet, it is important to ensure you have adequate protection in the form of anti-virus software. Many computers these days come with anti-virus software installed already. If not, you should consider downloading Ad-Aware from Lavasoft and AVG anti-virus from GRISOFT. These products are either free or reasonably priced, and are very effective. Finally, it is also recommended that you backup your data to an external hard drive such as those manufactured by Maxtor.