Why I wish I started small
17/05/2010 send to a friend
(Ed. note: Dan Matthews, author of 'The New Rules of Business', explains why not spending money at the outset is the best foundation for your business, even if your goal is to hit the big time.)
Of all the advice I've received from countless successful entrepreneurs over the years, by far the best is simply this: Start small.
When Kanya King launched the MOBO Awards, today the premier event celebrating black music, she did so from a spare room in a modest terraced house. Lord Bilimoria founded the Cobra Beer empire from the driving seat of a clapped-out van.
But when I started my publishing business three years ago I bought new computers (though I already had a laptop), rented an office (albeit in a cheap business incubator) and paid a sales guy a full salary.
By the standards of many established businesses my overheads were puny: to put a roof over our heads was a few hundred a month, the new tech was a modest outlay, while staff costs were kept to what the management considered to be a minimum.
But even this now seems decadent and luxurious compared what was absolutely necessary. Our rationale was that to be taken seriously we needed a Central London postcode, business cards and 0207 phone numbers – what rubbish.
Our business' revenue streams come from advertising, so it's vital to attract the right users (in this case small business owners and start-ups) to our site in large numbers. Nothing in that model screams the need for big-screen monitors.
If you're not convinced, consider this: almost every business that went the distance changed direction when it was growing up. Some underwent wholesale changes to product lines or delivery systems while others tinkered around the edges.
But spend big at the outset and you might not have enough left over to make the changes that secure your company's future.
It's understandable that many fledgling entrepreneurs worry about coming across as 'tin-pot' when contrasted with their competitors, but the fear of 'looking small' is a hangover from an era when anything that didn't sparkle was not worth looking at.
Business in the 1980s – and to an extent the 90s too – was typified by a Wall Street mentality. It was kill or be killed and greed is good. But in 2010 this sentiment is laughable; you don't have to puff out your chest to prove yourself any more.
If anything, the reverse is true. The fall-out from globalisation has (rightly or wrongly) put international companies on the back foot. They are forced to spend millions every year propping up tarnished brands.
Why would anyone want to emulate that?
Today, small is the new big. Be proud of your home office and the fact that your meeting room doubles as a place to hang your washing. The smart money is spent only on what brings a return, the rest is just window dressing.
Dan Matthews is author of The New Rules of Business available now.
Photo credit: fofurasfelinas
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Comments
Author: Rachel
Date: 17/05/2010
Comment: Hi
That's a very sound piece of advice that I completly agree with.Small is flexible and adaptable.Started big with a business partner, which ended up
in a disaster.Starting again on my own on a much smaller scale.
Website: http://www.chiffons-et-breloques.com
Author: Kate
Date: 17/05/2010
Comment: Very sound advice, but what if in order to survive you have to spend big at the outset? For example, renting a shop on a busy street where you will do well but with high rent versus renting on a quiet street out of town but with lower rent and hardly any passing trade. Do you have any tips regarding that sort of scenario?
Website:
Author: Claire Nield
Date: 26/05/2010
Comment: What excellent advice. So many business owners I meet who need help with their marketing are worried that they will not be able to compete against the big boys.
What I say is thanks goodness! Who wants a liability around you? I have worked with some major international players but as the accountants say - revenue is vanity and profit is sanity so dont always believe what you see on the surface.
Know your niche, know your customer and the the rest will follow.
Claire x
Website: www.coomarketing.co.uk
Author: Malcolm Burgess
Date: 26/05/2010
Comment: Totally agree with what everyone’s saying about corporate working and thinking you've got to start big but I’d love to draw your attention to another new book just out.
It’s exciting because it’s a business book that isn’t full of exclamation marks, bullet points, gimmicky cheeses or the thoughts of right-wing American economists who still believe they should inherit the earth.
Admittedly Rework (Vermilion, £10.99) is by two US authors Jason Fried and David Heinemeier Hansson but there the similarities end. Because this title, based on their experiences of running a rather unconventional software company, is about the real cutting-edge, warts and all of running a business ie the place most of us inhabit.
It’s great on ‘planning is guessing’ (we at Oxygen Books discovered this quite early on), why you don’t have to be fixated on growth – there are quite enough over-sized and definitely not flourishing corporates out there – why mission statements and corporate language is just plain hilarious, and why meetings are toxic and should be avoided like the plague wherever possible.
We really liked their authors’ emphasis on not copying (be influenced but don’t listen), on pouring yourself into your product, and on showing the world what you’re really like, which includes being upfront about your shortcomings.
Rework is the kind of book which can make any new company feel quite good about itself. And, let’s face it, you need all the reassurance you can get with corporates and banks thinking size still matters.
But just remember (in the spirit of Rework) that you need never again have to worry about whether to wear smart casual or casual smart to an Away Day trust pyramid ever again. If you do just sit in the corner giggling and read this book.
www.oxygenbooks.co.uk http://thecity-litcafe.typepad.com
Website: www.oxygenbooks.co.uk