10 lessons learnt when starting a new business
3 ½ years ago I was on maternity leave. It was my third maternity leave so it was nice and chilled. I knew what I was doing with motherhood and after a few months I started to get itchy feet. I needed something to keep my brain occupied, this DID NOT mean going back to my day job! The thoughts of starting a new business were stirring.
I had always been obsessed with saving money and thought there was something I could do. A lightning bolt struck, a friend and I, over a glass of wine, came up with the name and Mrs Mummypenny was born. The next day domain name was bought, social media accounts were set up. Done.
I spent the next 2 years running it as hobby updating the content every week, whenever I had some spare time from the busy full time day job.
I always knew it had the potential to be an incredibly successful business.
By July 2015 I had been able to negotiate redundancy from EE which allowed me to launch the business properly and now 1 year on I am running a successful business bringing in enough income to pay the bills and with huge plans.
Here are my top 10 lessons learnt.
Plan, plan and the plan some more.
I spent last July and August setting everything in the business for success. I worked with a business advisor on a business plan, cash flow forecast and survival budget. A great discipline to help focus the mind and work out the plan for the next 6-12 months and beyond. This business plan was signed off and my reward was a National Enterprise Allowance from the government. £65 per week for 13 weeks then £33 per week for 13 weeks. A great help with set up costs.
Speak to trusted advisors.
I am a great networker and work hard to maintain that network and build relationships. I have 2 mentors who helped in particular with the business plan stage. They tore it apart, made me start again then questioned my values, beliefs and confidence behind the business. They literally pulled my financials apart. It was amazing and they really made a difference at the beginning of the business. They are extremely successful self-made business men perfect people who understand the beginning of your own business.
Keep all costs to a minimum at the beginning.
This means set up costs and stock costs. At this point you are not earning any/much money so these costs will hurt you. Do not spend any money unless it is key to the running of the business. I needed a laptop (as my old one died a nasty death after downloading Windows 10), a tablet for on-the-go work, a new mobile phone and a desk. That was pretty much it.
Employ a great accountant early on.
If you need one drop me a message and I will pass on a recommendation. The accountant can help with financial advice, structure, company set up, payroll, planning. I am a qualified accountant but I feel much more comfortable having one there to check what I do. They know all the rules about income I have to declare and expenses to claim.
Work out the best way to get your name out there and reach out to your customers.
My customers are brands, PR Agencies and small business as my providers of income. They pay me to review their products or services. To reach out to these guys I needed to do all sorts of stuff. My main way was to build my social media channels, focussing first on Facebook and Twitter. I grew my numbers through my friends and network, then competitions then Facebook targeted advertising. I have spent around £200 on Facebook advertising in 1 year and maybe another £200 on competition prizes. Twitter was organic growth rather than paid. My Facebook is now 4k likes and Twitter is 3k.
Go to events.
One of my defining moments was working with Aldi. I joined the Aldi Wine Club, I reviewed wines and then I entered a competition to be a wine panel taster for an Aldi You Tube video. The rest is history. I met the PR team at the filming event and I started reviewing products for Aldi. They invited me to events they held such as wine tasting evenings and I talked to people. Simple as that, I engaged with other guests, told them all about Mrs Mummypenny. This has led to so much other work such as BBC Good Food Live show and other press work.
Engage with your local small business community.
They can help with advice and you might even be able to do an exchange of services. I help out my local butchers with marketing, and he throws in the odd freebie sausage & burger;-) I would avoid working with people who are takers. I.e. those who want stuff for free and will give nothing back to you. Of course there are exceptions to this rule sometimes, like charity work or local community work. I organised a charity event in Jan that raised £2800. I used my Mrs Mummypenny link to Barclays bank to get £1000 donation from them for the charity.
Keep track of your expenses and income.
I have completely failed at this and my books are a mess. Set up your banking from day 1 separately from your personal banking and pay all expenses from there and put all income in there. My income is all over the place, sometimes in business account, sometimes in personal, sometimes PayPal. It’s going to take me forever to pick it apart. And only I can do it. My expenses are at least sorted into monthly envelopes. And I have asked a bookkeeper friend to help me sort it out. She is going to help out on-going as it’s REALLY important to know your monthly position income and expenses wise.
Cash flow is king.
Do not run out of money. Chase invoices and if they are not paid add on late payment charges. If you run out of money your business will fail so keep afloat and always have a positive balance of money.
But what if you need money?
So I got to the point where money was getting tight. I spoke to my bank, Barclays where I needed 1 year of accounts to get an overdraft, not helpful. But I was able to get a Barclaycard with 6-month interest free purchases, this has a limit of £3k. You can take out personal credit cards maybe, as there are tons of great interest free rates that last for ages. Consumer rates are often better than small business rates on most things. There are grants and loans available if you search carefully online. I am always on the lookout. Maybe you have a nice rich relative or friend who might loan you some money on a short term basis, please agree payback terms though.
The past year of running Mrs Mummypenny has been my best year ever in my working life and long may it continue. I appear to have found my calling in life, finally I do what I love, I am my own boss and have the ultimate flexibility to do what I want when I want.