Make sacrifices for your first clients: Adrian Moorhouse, Lane4 (HR)

When Adrian Moorhouse first founded Lane4 with a sports psychologist and a salesman, he lacked a business plan and, as an unrecognised business, had to fight for his early clients. His first customer was a British airport in need of a management-training programme.

After five presentations the buyers were still not convinced they should take a chance on Lane4, so Moorhouse offered them a performance-related price structure. First clients are always the hardest, and offering unusual incentives is a good way of getting them to choose your business.

“We asked for their worst people, the people they thought could never change, and we promised to motivate them. We asked for half the money upfront and then the other half if they felt we did a good job. It went really well, even when they gave us people who didn’t want to do any learning. It was scary but we got results.”

Get a motto: Ajaz Ahmed, AKQA (marketing)

AKQA founder Ajaz Ahmed says that when he started his business he lacked the up-to-date equipment the firm is famous for today. He believes this was made up for by the founders commitment to its founding principles: innovation, service, quality and thought.

From the outset the group agreed they would represent these values in everything they did. Although these qualities were never written down, or even articulated explicitly to clients, they have acted as guiding principles to this day and reflect the firm’s continued commitment to quality.

“Our business needed to represent those four principles without us making a big song and dance about it. Those values are why AKQA evolved from a scrappy start-up to a large independent agency.”

Steal your first customers: Brad Burton, 4Networking

Like many people who start businesses, Brad Burton knew that his first customers would come from rival organisations. Unlike many startups, however, he went after them in brazen style, making it abundantly clear who he was and why he was stalking business-networking meetings.

In a flurry of guerrilla marketing Burton leafleted and canvassed local business people, convincing many of them to leave their networking groups and join the embryonic 4Networking for its first meeting. Having secured 72 attendees Burton never looked back.

I handed envelopes to people. Inside it said, ‘Good Morning?’ and then listed the reasons why they should come over to us instead.

“I admit I just basically spammed people because I had no money or resources. But it was very smart spam that looked like it was written just for you. People were talking about me – good and bad – but those who hated me four years ago are all over 4N now.”

Get cosy with your market: Doug Richard, Dragons’ Den

For Doug Richard, the most important thing people forget when they start a business is market research. Entrepreneurs must know that their product or service will be in demand; but too many people trust a gut feeling instead of getting out there and testing the market thoroughly.

“I’m forever telling people with start-ups to make something people want. And people say “of course”, but when I ask, “How do you know?”, then frequently they don’t know, they believe. They haven’t talked to prospective customers and they haven’t measured the size of the need the customer has that they’re replacing.

“They haven’t worked through the logic of the proposition in adequate detail to persuade me there’s enough room for a business to exist. They’re all caught up in the excitement of having spotted a gap. Sometimes gaps exist because they should. So that first question should take up a lot of your time.”

Online is not easier than bricks and mortar: Sarah Beeny, Property Ladder, Tepilo.com

It’s a common misconception that online businesses are easier to start and grow than bricks and mortar ones. They are actually very similar, except that instead of a physical shop you have a website – which, by the way, can be just as expensive to run.

Sarah Beeny, creator of two dotcoms, found that out the hard way. Instead of launching her first website MySingleFriend.com and seeing it take off immediately, she found herself phoning friends and begging them to upload their details to the site.

“Dotcoms are a lot harder than you think. You need a fantastic website; I’m really proud of Tepilo – I didn’t build it so I can boast about it. What I didn’t realise with MySingleFriend is that you have to constantly update it to keep it relevant or it will come crashing down. Don’t expect to build a site and just leave it there.

“MySingleFriend is really popular and it’s successful, which is so exciting. But I have to say it was slow at the start; I had an image of it taking off really quickly and everyone using it, which is why I’m a lot more relaxed with Tepilo.”

Make sure you are ready to trade: Anthony Ganjou, Curb (marketing)

When Anthony Ganjou founded Curb, a creative advertising agency that utilises the natural environment in its work, he waited a full eight months before pitching to prospective clients. He thought it vital that the business first build a full-service offering before showing advertisers what it could do.

“We help advertisers convey their message in a striking way that is natural, yet stands out from the environment, be that sand sculptures, crop circles or ‘sea tagging’. I needed to be able to offer a range of these media to clients from the word go because I wanted Curb to look like an established business straightaway.

“Our employees were putting the supply chain together, because we didn’t want to start without being able to deliver everything that we do. We wanted to work with the big boys from the word go and this preparation meant that we could.”

Research web-development companies thoroughly: Syed Ahmed, The Apprentice

Syed Ahmed had a nightmare with developers when he created a website for his first business, IT People. So much so that he founded a completely separate business, Get Launched, to help entrepreneurs avoid the same trauma.

“I created Get Launched because of the pain of setting up a business when you don’t have all the contacts. In the course of having my website developed, I quickly learned that what other people need is a painless, one-stop shop. After we had it all in place our company flew pretty quickly.”

Get a vision: Mark Zaleski, DailyMotion

Mark Zaleski, a serial CEO who has lead some of the world’s biggest dotcom companies, argues people need to be clear about their objectives before they start up in business. People motivated purely by money are most likely to fail, he says, and most that develop strong businesses have a clear path from the beginning.

“Some people go into business saying, ‘How do I make a lot of money?’ As opposed to creating something that people want and have fun doing it. Even if you have a mediocre idea, if you have good people around, you will be ‘successful’ – though you can define success how you want.

“You’ll have an enjoyable life too. If you start out saying, ‘I want to make this or that amount’ the chances are you won’t make it and you’ll be miserable doing it.

“Ask yourself what you want to get out of being an entrepreneur. Do you want to lead an army of people or build something you love and keep innovating? You might think you just want to enjoy it – it’s your right to scale it how you choose. Businesses can become like a big HR exercise, with you worrying about Sally in accounts’ sick leave record rather than the product and the plan.”

Focus on cash flow from the start: Syed Ahmed, The Apprentice

Having set up and run IT People, Syed Ahmed had two years’ experience of getting a new business off the ground before appearing on The Apprentice. His biggest challenge in that time, he says, was keeping control of his cash flow.

“I experienced setting up a company from scratch, making all the mistakes, dealing with debtors, creditors, staff and payroll.

“To be honest it’s not what you expect when you start up – you think you’ve spent something during the month and when you look at a bank statement it’s something completely different, but I loved the process and I learned to keep the books tighter as I went along.”

These insights were originally published in 'The New Rules of Business' by Dan Matthews, available through Harriman House and Amazon.