Starting A Business From A Standing Start

In October 2014 I resigned from a 12 year corporate career with two large multinational consumer goods companies with no clear plan of what to do. I knew I wanted to have a role in the burgeoning beer and spirits market in America. The number of brewers in America has doubled in the last five years and the number of distillers more than trebled. There is a lot of energy, creativity and passion to tap into and somehow be a part of.

Of course my initial instinct was to start up my own brewery or distillery, or at least get in on the ground floor of someone else’s project.  But after talking with a few people who had done just this, and from reading accounts online such as this, I realized this wasn’t going to be for me.

Not because I don’t have a deep, deep love for beer, or because I was scared of the hard work.  More because I felt I was too old at 36 to be able to put in the 10 years or so of hard grind without much pay, and, mainly, because I didn’t want to limit myself to just one place and one brewery. I realised I wanted to engage with the whole industry, and take a role of a third party, able to interact with several businesses at once.

"I’m infinitely lucky that I have a very supportive spouse who has a career of her own"

I decided to return to an old ambition of starting up my own recruitment business. I had worked for four years for a board-level executive search firm in London straight out of university, and had loved it. I enjoyed the very social nature of the business, the ability to work with several different clients at once, and the ability to meet clients’ needs by helping people move their career forward.

I left recruitment to get some industry experience and had always had the dream of starting my own business toward the tail end of my career, in my late 40s or 50s. But why not now? Why not here?

The more I thought about it the more it made sense. I would be able to fulfil my aims of working across the drinks industry, meeting plenty of enthusiastic, passionate people and being able to help people in a meaningful way. It has the added bonus of total geographic flexibility – all you need is access to a phone, a laptop and an airport.

It’s also something I know I’m good at, making use of my abilities to grasp and solve business and people problems, my knowledge of the market, its brands, its products, and my ability to coach people and help guide them toward positive change. The fact that I had been on the client side for so long and know how the industry operates strategically would be a big plus.

Jon Urch has picked a business with low overheads and an opportunity to get out and meet people

The only thing was I was going at it from a standing start. This wouldn’t be a business I would be starting with anyone else at the outset; it was just me. I had plenty of experience as a recruiter and in the drinks business, but my recruitment experience was from London, and I had no experience of recruiting in the industry I had worked at  (apart from as a recruiting manager, and having interviewed and recruited people as a client).

So I did my research.  I spent a lot of time online, I read a lot of books and I spoke with as many relevant people as I could get a hold of. I set about starting up, and I now have a fledgling recruitment business with a great client and several pitches in process. Here are the big steps I took to get to that stage. Bear in mind that a one-man consultancy is a very simple, low-cost business structure.

Be certain in your decision and make sure you have support before you set out

I’m infinitely lucky that I have a very supportive spouse who has a career of her own and who wants to see me succeed. Before I even considered leaving my stable corporate job, I had several long, open conversations with her. Since we agreed I should quit, and since we were agreed that I would quit without a job to go to, or even a concrete plan, we have had frequent, honest chats about how it’s going. It’s critical for her sake and for mine that she is 100% bought into every move, as my career affects her as much as it does me.

Even more critical than belief and support from your spouse, your family and your close friends is the belief you need from yourself. Setting off on your own has stacks of upside, but there’s also plenty of downside to consider, like being on your own a lot, having to make big decisions quickly, having no guarantee of a pay check and needing to face up to plenty of rejection.  Before you set sail, make sure you really want to make the journey.

Get a grip on your finances and have a plan for them

Before quitting my job I wouldn’t say I was fiscally irresponsible or negligent, but I knew I didn’t have the firmest grip on my finances. Between my wife and I we were earning enough to live a comfortable life and be able to save a decent amount every month, we had full healthcare, good pension plans and a reasonable understanding of our investments. Leaving my job meant a lot of that went out the window, so one of my first priorities was to build a rigorous plan for our finances.

Within a month we were spending about 40% less per week, we were tracking all spend and operating within a good budget, and we agreed on our financial goals and how we were going to get them. We even instituted a weekly meeting on Sunday morning in which we reviewed the previous week, made a plan for the following week and each took away actions for our longer term financial planning. It may sound a bit rigid, but it’s really working for us.

And setting up a business costs money. I decided to create my company as an LLC in New York state, which cost me $1,500. There are the costs involved in visiting potential clients, building a website, setting up a home office and consulting with lawyers and accountants too. Make sure these are budgeted for and planned for. Finally, make an honest and realistic plan for future income.

Evaluate the opportunity

I was talking to a friend who works in consulting a couple of years ago and told him of my brilliant new theory about the three interlinked requirements of being successful as a business or as a worker when he laughed and told me I’d just described a common model, the Zenger Folkman COP. Damn, I had thought I had invented something awesome!

Anyway, it involves a simple Venn diagram of three circles: what you’re good at, what you like doing and what others want you to do. Success lies at the center of the diagram where all three meet. In setting up a business you NEED all three.

"My most important resource is my own time and energy, so I haven’t so far needed to pitch for any capital"

The trickiest one is of course what others want you to do, in other words the market opportunity. Does the product or service you want to provide meet an under-satisfied market need? Is the need for your service just a short term requirement or a long-term trend? Make sure you bottom this out before making any kind of commitment.

In the case of my idea of recruiting for drinks companies, I was staring at a trend that seemed as clear as daylight. The market for beer and spirits in the States is pretty much flat (ie. America is not drinking more) yet the number of suppliers is literally multiplying.

The talent to fill that growing supply base is finite – there are only so many experienced brewers and distillers, sales people and marketers out there – so the demand for great people will rise. Companies will need help finding and recruiting the best people. Sweet. I had a hunch, and I talked to as many people in the industry as I could to confirm what I suspected. It was only when I felt completely certain that I moved forward.

Write a business plan

The road I decided to go down as a consultant means my start up costs are minimal and my most important resource is my own time and energy, so I haven’t so far needed to pitch for any capital. But, even though I have no formal requirement for a business plan to sell to potential investors or partners, I still wrote one. Mainly for myself.

A business plan is a road map to follow. The key elements are: an analysis of the market opportunity, your idea for exploiting that opportunity, an audit of the competition and the room for growth, laying out the short, medium and long term costs for setting up and operating your business, your revenue and profit plan, your marketing and promotion plan and your long term plan for growth.

Craft brewing and distilling is a growth market in the Uk and the US and a serious contender against the big firms

If you are presenting the plan to investors, it should be a detailed and glossy document. In my case it is a simple Powerpoint accompanied by an Excel book intended only for me.

Going through the exercise of making a plan is crucial, because it helps you structure your thoughts and think through your ideas. Writing stuff out will often expose flaws, and it forces you to do your research. Almost as importantly, it means all your key information is in one place for you to refer to as time goes by.

Seek honest feedback

Ideally you should try to generate a mentoring relationship with one or more experienced people whose opinions you trust.  I am lucky that I have several friends who are already successful entrepreneurs, and a couple have kindly offered to support me through an informal mentoring arrangement.  (I buy them lunch, tell them what I’m up to and they give me their advice.)

At the least, you must seek out the opinions of people who can give you good advice.  Operating on your own is tough, and it’s much tougher if you’re doing something for the first time.  It’s rare that a start-up succeeds based on one person’s perspective alone.

In setting up my company I don’t know how many people I’ve phoned up for advice, know-how or just a reaction, but it’s a lot.  Finding and using feedback on your ideas, your plans and your tactics is critical, especially if you want to get it right first time.

Get online

These days, no matter what your business is (except maybe private detective), you need a good online presence.  For most businesses that will mean a website plus social media platforms.  The good news is, setting up a website is easier and cheaper than it used to be, and getting on social media is essentially free.

The key is to make sure your online presence is arresting and professional.  It’s unlikely you alone  have the judgement and design and technical know-how to be able to manage it all yourself, so get help.  There are plenty of design agencies and mainstream companies that will help you build a website and set up your brand’s look and feel, regardless of your budget.  The more direction you are able to give them, the easier and cheaper it will be to get a great result.

I have a background in marketing and have worked extensively with digital and design agencies, so I had a pretty good idea of what I wanted my website to look like and how to set up my social media.  To get a better understanding of what’s involved I first made a blog on my own.  Which was surprisingly easy, and a lot of fun.  (By all means check it out at TheDrinkingClasses.com.)  I also engaged a friend of mine who is a fashion photographer, blogger and part time web designer.  I worked with him because I wanted a very strong aesthetic impact and a relatively simple website.  I’m really pleased with how things turned out.

My two biggest pieces of advice I would offer to any start up in this area is to keep it simple (probably simpler than you initially think) and to prioritize great pictures.  Either through stock photography or by asking a photographer to help you out, you can get really good looking pictures without breaking the bank, and they make a world of difference.

Practice a pitch, then hit the road

No matter your business, the key to your success will be sales.  Naturally your product should be awesome, your approach should be innovative and you need to have a great plan in place, but ultimately your company will live or die because of your success selling it.  Have this thought front-and-center from day one.

As you develop every part of your business, look at it from the perspective of a potential customer.  Resist at all cost the temptation to do something because you “feel” it will work if, when looking at it from a sales viewpoint it doesn’t make sense.  Avoid the mantra “If I build it they will come”!  If you have no sales experience, there are hundreds of books and websites that will help you.  And all of us know at least one person who can sell ice to an Eskimo, so buy that guy or girl a drink and pick their brains.

Build it and they won't come, until that is you get on the road

As soon as I had settled on my business idea I started drafting a selling presentation, something I could see myself talking a potential client through.  I put in some fancy pictures I had had taken and my draft of a logo, but its purpose was to get across the benefits of my business to a client.

When I had a draft I sent it out to several trusted advisors, and received a lot of helpful feedback in return.  I realized, despite my best efforts, I hadn’t emphasized the needs of a client enough, so I redrafted it and redrafted it some more.  The main points from this little deck have become the framework for my website, and the talking points I have in my head when discussing my business with others.

But, as they say, the proof of the pudding is in the eating.  Get in front of your potential client base as early and as often as possible.  Do not fear rejection, and do not hold off until you feel 100% ready, because you never will do.  The people who will give you the best possible feedback are the people you have designed your business for.

My business, Wednesday Consulting, is nowhere near successful yet.  My target is three good clients by the end of 2015, and I only have one so far.  But I do have the foundations in place, and I feel positive about where I’m headed.  I would love to hear anyone else thoughts and builds on what I’ve written, especially any constructive criticism in my approach, and especially from people who have a successful record as entrepreneurs.