Growth through Innovation for Micro and Small Businesses

As a business, if you don’t grow or aim to grow, the business becomes stagnant, stale, just surviving and if not careful become irrelevant.  That may seem hash, but it’s true.  Having said that, some businesses want to remain small or the size they are and there is absolutely nothing wrong with that as long as they continue to reinvent, refresh and innovate and check themselves.

Talk about innovation in small businesses to small business owners and they say it’s for the big business.  That’s being small minded. In today’s tough world economy, the Plumber, the Dog Walker, M&S and AOL could all do with some innovation.  Size does not matter.  Innovation is not about doing things better, improvements, or reinventing the wheel, it’s about doing something different, introducing new things or methods.

Don’t always think Technology alone when you think of innovation, or you’ll get put off.  You’ll think it’s for that sector alone and you have to be very creative, etc.  Think customer service, think about methods of operation, think about value chains, etc.  Move into that mind set, be persistent and consistent in building that culture and you will have your own Eureka moment. 

Finally, innovation doesn't have to be expensive. I’ll say no more on that one.

The best and simplest definition of Innovation I've seen is - The development of new customers’ value through solutions that meet new needs, inarticulate needs, or old customer and market needs in new ways.

My next blog will be on “How to Innovate”. Watch out.

This is Business Advice from RBSS Consulting Ltd

Remi OkesholaMD – RBSS Consulting Ltd
Providing Real Business Solutions and Services
www.rbssconsulting.com

Funding your New Business Start Up

Finance Options for Your New Business Start up

The type of finance you choose will depend on what kind of business you are starting, how much money you need and what you will use it for. For example, you could:

• Use your own savings or personal borrowings to fund the business, particularly if you can't obtain finance or investment from external sources
• Borrow money from family or friends. However you should carefully consider the risk that they could lose their money if your business fails
• Borrow from a bank if you have a credible business plan and can offer some security. Many businesses use overdrafts for day-to-day borrowing and to manage cash flow, and loans for long-term funding, or to finance large purchases such as equipment. If your business is likely to have peaks and troughs in its cash flow, it's essential to be able to clearly illustrate these to your bank so you can plan an overdraft. When considering bank finance, it is generally a good idea to take professional advice from your accountant or business adviser.
• Aim to attract outside investors - eg by selling shares to business angels or venture capitalists. This can provide short-term finance without the need for repayment, and can also bring in expertise along with funding. However, it usually means giving up shares in your business, and investors may want some control over its management.
• Qualify for a grant or government support. These can provide very cheap financing, and often come with business advice or subsidised consultancy. However, there is usually a lot of competition for grant schemes, and you will need to meet various criteria - depending on the scheme. I have to say, they are few and far between now.
• If you are finding it difficult to obtain bank finance, you could also consider commercial lenders - such as insurance companies and building societies. You may get a better deal - eg lower interest rates - and they are generally less restrictive - eg if you have a poor credit rating. However, commercial lenders are also subject to fewer regulations than banks and you may have to provide some security in order to obtain funding.
• Look for finance from other areas - eg from a community development finance institution - if your business only needs a small amount of funding, or if you are setting up in a deprived area, or in a sector not normally covered by banks or other lenders.
• Consider Crowd funding - Crowd funding or crowdfunding (alternately crowd financing, equity crowdfunding, or hyper funding) describes the collective effort of individuals who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations. Crowd funding is used in support of a wide variety of activities, including disaster relief, citizen journalism, support of artists by fans, political campaigns, start up company funding, or free software development, inventions development and scientific research. Crowd funding can also refer to the funding of a company by selling small amounts of equity to many investors.

Most businesses use a mixture of finance sources. For example, you might invest your own money to cover market research, bring in outside investors to share the risk and borrow from the bank to purchase equipment and machinery.

 

More to come on Business Angels Vs Venture Capitalists and how to access them

Remi Okeshola

MD – RBSS Consulting Ltd

Providing Real Business Solutions and Services

www.rbssconsulting.com

 

Source: Business Link webpage and other sources

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What's Wrong with being Self Employed

In the UK, in the first quarter of 2012 just over 84,000 people set up their own businesses and are operating on a self-employed basis.  This means that for the first time in the UK, there are 4.2 million people registered as self-employed.  In London alone, there are 600,000 people registered as self-employed out of a population of 7.75 million people.

Ranging from your gallant handyman to your studious professional manager, there has been a resurgence of the concept of running your own business.  Whilst the typical trades person business has still remained at 30% of those registered as self-employed, the increase in more administration and professional roles has increased immensely and are actually growing and employing more people.

What’s driving this growth? Well one thing is certain and that’s the state of the economy. There are 2 camps.  One camp says “there are no jobs out there” and so they remain unemployed.  Another camp says, “Wow, there are some great opportunities created by the current state of the economy and I’m going to take advantage of them”. Those with an Entrepreneurial zeal therefore do the following:

1.       Look for a gap in the market – doesn’t have to be a gaping gap

2.       Come up with solutions to the gap whilst ensuring there is a demand for the service or product

3.       See where they can add real value by being innovative or creative

4.       Stick to what they know and are qualified to do – or can train and up-skill themselves

5.       See all opportunities as a sales opportunities

6.       Get help to make sure they can run it as a business

7.       Get help to make sure they stand out from the crowd

The two things that really drive small start up businesses  forward is getting help to stand out from the crowd and getting help to run it like a proper business.  Not many people do that, so observe the masses and do the opposite says Earl Nightingale.  Don’t be shy to pay for help – Business Advice.

As an Example, you may want to start a fashion line.   The advice would be to do the following:

1.       Be clear on your mission

2.       Identify your target market and assess demand

3.       Come up with you clear range of designs

4.       Be clear on what your unique selling proposition is

5.       Decide on if you want to sell to individuals i.e. B2C or other businesses i.e. B2B

6.       Work on your pricing model

7.       Be clear on how you want to run the operation – from suppliers to consumers

8.       Consider what your marketing strategy is going to be. This will largely depend on your target market

9.       Put a marketing plan together. Do you want to do exhibitions, have a shop front, do it all online, lifestyle and fashion magazines, social media, etc.

10  Put a financial plan together showing how you are going to fund the business.

In a stealth manner, you would have put together a clear practical business plan for your fashion business without even knowing it. Get help to do these things if you can’t do them yourself

With the right Information, Advice and Guidance support, you can start your own business.

There is nothing wrong with starting your own business.  Its not rocket science. You don't have to give up your full time job to start with - that's if you have one.

Remi Okeshola

MD – RBSS Consulting Ltd

Providing Real Business Solutions and Services

www.rbssconsulting.com

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