by Real Business - Thursday, 30th August 2007

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Sooner is easier than later
I set up Abacus Recruitment when I was 21. I had no mortgage, no kids. What was the worst thing that could have happened? Even if I had blown it all, I could still have found a job with someone else. But the decision becomes difficult when you hit the pram-in-the-hall syndrome.

There’s never a perfect time
People procrastinate for years, waiting for more investment or the right time in the economic cycle. The time is never right to start your own business. Do it now.

Have a plan
Know why you are setting up your own business. Are you doing it for lifestyle issues? Is it about money? Or do you need the flexibility to look after your children? Instil some discipline. Accountants and advisers can help you with business plans, but they aren’t generally courageous business people. Instead, ask friends or family for advice about the trials, tribulations and challenges that you will, inevitably, face in the first two or three years. But remember, you’ll meet plenty of people who aren’t very bright, but who are making money out of their own businesses. You don’t have to be a genius.

Do you need a partner?
Partnerships often crumble because the partners have different aims and different ambitions. You may not need a partner, just a bit of moral support. Perhaps you should have an informal advisory board. If you need specialist help, buy it in. And ask yourself, is your competence greater than your confidence? When we started, I hired in a seasoned old campaigner as a bookkeeper. He challenged us and gave us the confidence to aim high.

Have fun, make money
Don’t get too sucked in. Initially, you’ll have to put in a lot of hard work, but don’t make it your whole life. If you don’t have other interests, you’ll lose your objectivity.

Milk the honeymoon period
People like people who have taken a risk. They often wish that they’d done the same thing. You can milk that sentiment. You can call in favours, tell them you’ve got no money and get paid more quickly. Those people will also feel reassured that they are dealing with the owner of the new company and they won’t get let down.

Keep the costs low
Keep a tight financial control and you’ll reap the rewards. Your strategy should be: profit first, growth second. Too many companies fail because they have three good months and then raise the cost base too high. Keep your strategic planning very simple. It’s all about “how much will it cost, how much will it make, how long will it take?”

Under-promise and over-deliver
Whether it’s meeting deadlines or coming back with a quotation, you’ll only impress people if you deliver more than you promise.

Never trust the bank
Bankers make very poor business advisers. Use one bank for your business; another for your personal finances. Have different types of finance. But only use family money if they don’t mind losing the money they’re giving you. And remember that you’re running the business for the business’s sake, not for the people who lent you the money.

Watch the big picture
It’s all too easy to get bogged down in the detail. Don’t lose sight of your bigger aims.

Fail fast
When we launched Abacus, an advertising friend came up with a direct mail campaign that was all about “solving your recruitment headaches.” We stuck thousands of aspirins onto our letterhead and sent it to all our clients. Unfortunately, the Post Office franked all the aspirins; when people opened the envelopes, they got covered in white powder. We ended up with less business after the mailshot than before. The motto is: try lots of stuff, and keep what works.

Double £1k ten times = £1m
Ask yourself, could you make £1,000? Double it ten times, and you’ve made a million. It’s a very reassuring thought.

Keep yourself hyped up
It’s easy to fall into a trough. Buy motivational books, tapes etc. Join a network such as your local Chamber of Commerce. And keep the creativity flowing.

Contacts
Gary Ashworth founded Abacus Recruitment in 1981 in a small room above a pub in the City of london. Contact him at ashworth@globalnet.co.uk

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