When asked if there was anything they would do differently if given the chance to start-up their business again, a 21% said they would have taken more time to get the foundations right. Mistakes learnt from rushing in at the start include failing to build a pipeline of work before leaving full time employment, failing to have enough products at launch and doing more research before starting. One respondent stated that given their time again they would “go easy on the bright ideas, even though sticking with what’s profitable does get boring.”
The second most popular piece of advice SME owners would give themselves would be to manage their finances better (17%) and improve their planning (17%). The key financial advice involved charging more, securing investment upfront and getting a better control on cash flow. One in nine (11%) small business owners say they would have asked for help from either a mentor or a business partner, while 5 per cent say that they would have done more marketing of their product or service.
One in five (19%) business owners, however, claimed that there was nothing they would have changed about the way they had set up their enterprise.
Nick Breton, Head of Direct Line for Business said: “This research shows that entrepreneurs should not be deterred from starting up their own businesses. With the average SME taking 18 months to turn a profit, this should encourage those in the early stages of developing a business – or those who are considering a start-up – to persevere with their business plan. However they are to be reminded that success can certainly be aided by the best possible preparation in the early stages of starting up.”
Emma Jones, founder of Enterprise Nation said: “One of the great benefits of running your own business is the ability to learn as you go along. You can't possibly know everything at the outset but turning to an adviser or mentor can help. Small business owners are incredibly resilient, whilst also being flexible to change and this is shown in these results as entrepreneurs confirm that things don't always go according to the business plan!”
The research also looked at the length of time it took a small business to turn a profit. With the average age of businesses taking part in the study standing at four and a half years, respondents claimed that it had taken them 18 months before the business started making money.
Profitability was achieved slightly quicker amongst sole traders (1 year and 5 months), while businesses with a larger employee base and therefore higher outgoings – took longer to start making profits. Businesses employing between 6 and 10 staff take an average of 2 years and 3 months to turn a profit and those employing more than 11 people taking 2 years and 7 months.
The most frequently cited tips for start-ups from existing small business owners are:
1. Know your market – Many SMEs state that they would do more research into their chosen market before starting up again. This includes researching competitors, networking and developing an understanding of related issues such as tax and recruiting issues, or competitors
2. Slow down and plan your approach – A large number of business owners say that they would change how they approached their start-up. Whether it be working part-time while they were building up the business, growing their business more steadily or simply starting sooner, the way you approach your business can have a long-lasting impact on its success
3. Ask for help – Starting up your own business can be a liberating experience, but this doesn’t mean that you have to go it alone. Indeed, one in ten small business owners say that they would ask for help more if they were starting their business again, whether it was from a mentor, a financial adviser or a business associate
4. Manage your finances – Whether it is sourcing funding or getting an accountant, it is imperative for start-ups to have a good understanding of their financing. Many SME owners claim that they wish they had invested more in the developmental stage of their business, whilst others warn against under-pricing their product.
