14/01/2011

By Mike Southon, FT columnist

January is a traditional time to think about new ventures, with budding entrepreneurs busily writing their business plans and approaching sources of funding.

My New Year’s resolution is to spend less time with these people, who are already highly motivated and well supported by on-line networks and service providers.

My focus will instead be on those who would like to make a better life for themselves but lack the confidence or connections to know where to start. This includes the long-term unemployed and graduates burdened by debt from their student loans.

They have two simple options: either to get a job or become self-employed. Once a one-to-one basis, I can judge which option is better for specific people, so I am working with key Local Enterprise Partnerships (LEPs) on how to scale this process for much larger numbers, using psychometric tests and other on-line tools.

I often meet recession-beating companies who are planning to grow. Their only barriers to growth are securing the space to expand and finding the right people to employ.

All LEPs contain local authorities whose economic development departments can assist with the former. For the latter, they need to aggregate their local private sector training providers into a single on-line directory and ensure that the government subsidies for re-skilling the unemployed are in place.

For those who have both the aptitude and gumption to become self employed, my key task is to de-mystify and de-skill the process for them.

I have spoken with many people whose first contact with an advisor completely put them off the idea of starting a business. They were told about company formation, health and safety, accounting, taxation and legal issues. They left discouraged and disheartened by the formal process and bureaucracy involved.

My advice is much simpler. First, find a business area in which you have a genuine passion and knowledge, rather than something you think might make money but for which you have no real expertise. You should also have modest ambitions at first, ideally providing a local service rather than a product.

So if you were passionate about cooking, it would be to provide catering for a party rather than opening a restaurant. If you enjoy looking after children, it would be providing a nanny service for friends rather than open up a day-care centre.

The first test of the viability of your business idea would be if your friends were willing to give you cash for your service, re-book you and recommend you to their friends. If you also have made a profit on the transaction, then you have the basis for a viable business.

Finally, you need to find your true niche, even if this is by trial and error. Renata Graham enjoyed making jewellery, but found that the sale price of the items never covered the time and cost involved. She switched to providing workshops that teach others how to make jewellery, and now has a profitable business at http://www.rgstudio.co.uk

This may all seem like obvious advice, but if you are not already a successful entrepreneur, I would strongly recommend your New Year’s resolution should be to consider taking these simple steps in 2011.

Even if this is a side venture to your current employment or perhaps something to fill in some spare time while looking after children, this could be a useful fallback in these uncertain times, which are characterised by increasing job uncertainty.

And if you are involved in something that represents a genuine passion and your customers are delighted by your service, then 2011 could turn out to be your best year ever.

Originally published in The Financial Times:www.ft.com
Copyright ©Mike Southon 2011. All Rights Reserved. Not to be
reproduced without permission in writing.

Mike Southon - Co-author of The Beermat Entrepreneur & Business Speaker - www.mikesouthon.com

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