Ritam Gandhi, Founder and Director, Studio Graphene
Four years on from my launching my own business, what have I learnt?
Four years ago, after a decade working as a consultant for the likes of Accenture and Bank of America Merrill Lynch, I made the bold decision to start my own business. Offering third-party design, app development and IoT solutions for private companies and aspiring entrepreneurs, the company – Studio Graphene – was launched in August 2014.
Studio Graphene was one of almost half a million companies established that year. Indeed, the UK’s entrepreneurial spirit was, and still is, palpable – more than 589,000 new companies were established across the country last year, up from the 484,000 businesses formed only six years ago. In total, the UK has witnessed the formation of almost 3.5 million startups over the past five years.
Whether you’re a seasoned entrepreneur or someone who has just launched their first business, the formative years of a startup can be incredibly challenging. The figures paint a startling picture; just over half (53%) of the businesses launched in the UK in 2014 – the year I launched my company – survived until their third birthday.
As the team celebrates Studio Graphene’s fourth birthday this month, now is a timely opportunity to look back on the business journey and recognise the common challenges faced by businesses attempting to make that leap from a startup to a scaling SME. Having worked closely with young tech startups, my experience has taught me valuable lessons that might prove useful to entrepreneurs hoping to reach that all-important three-year milestone and beyond.
The importance of planning
In order to create and grow a successful business, it is important that you have a good idea of where you would like to see your company in the future. But an entrepreneur cannot just have a ‘master plan’; the vision of what they dream their business will one day become. The roadmap should consist of far more manageable goals that are just months, weeks or even days away.
Even though plans will certainly change along the way – particularly due to the unpredictable nature of running a startup – an entrepreneur needs to be constantly aware of the direction the company is heading in and ensure that all efforts are being effectively coordinated to accomplish identified milestones.
This involves having a strategy in place to make sure that everyone in your team is working towards the same goal – as opposed to running in different directions. Dedicating some time to creating a carefully thought-out plan will ensure that you are well-prepared for any obstacles you run into along the way – and this is sure to save you considerable time and energy in the future.
On a similar note, it is essential to stay razor focused on your long-term objectives rather than becoming distracted with minor or less important activities. Setting yourself clear goals and being realistic about what you need to achieve them can be invaluable when building a successful startup.
Ride the waves
The thrill of a startup lies in its largely unpredictable nature – any week can provide a vast array of highs and lows, from malfunctioning tech to a huge sale. Entrepreneurs need to be prepared for these ups and downs.
Unforeseen challenges can initially seem daunting, and it is common for people to see them as a much bigger deal than what they actually are. The key here is to stay focused on the next goal. The challenges you face along the way will teach you valuable lessons and give you the skills needed to overcome similar obstacles in the future. Starting your own business is, after all, a learning process – the more you can learn from the experience, the better prepared and versatile you will be in meeting future challenges.
Plan your cash flow
One of the biggest reasons that startups fail is due to poor financial foresight. Cash flow is the life-blood of all businesses – particularly small enterprises that operate on a hand-to-mouth basis – which is why it helps hugely to forecast future expenditures to ensure your business has sufficient capital to survive.
Managing your cash flow involves preparing a budget that accounts for conservative business growth. Make sure you have a good idea of how much you are spending, where funding will be allocated, and how this could likely change in the future. Keeping close and regular tabs on your finances will allow you to build an accurate projection of future profits and expenditures, in turn meaning the company can plan for any unexpected financial hurdles.
In the end, having the ambition and determination to create and drive a business is the most important characteristic of any successful entrepreneur. Taking heed of these simple tips and advice may, however, prove valuable for startups seeking to reach their three-year milestone.