Back in the spring of 2002 BBC 6 Music launched, coal mining ended in Scotland and the Queen Mother died. Another story that crept under the media radar at that time was the launch of the online printer ink retailer, Stinkyink.com.
Serial entrepreneur, John Sollars, who has established three businesses over the course of thirty years, says, ďI set up Stinkyink.com knowing nothing about ecommerce and was almost bankrupted within months by a national ring of scamsters who defrauded me of £32,000 with stolen credit cards. The police could do nothing and I was at a low ebb. But Iím not a quitter. I discussed it with the dog and decided to carry on.Ē
He continues, ďThe fraud issue really coloured the first four years of the business as it made it hard to get credit with suppliers as our balance sheet was so weak. It taught me the importance of having cash in the bank and watching my P&L like a hawk.Ē
Ten years later, the profitable Stinkyink.com now employs 14 staff and has a turnover of more than £3 million. Here is Sollars advice to start-ups on how to survive beyond the early years.
1. Stay single. If you start a business with a friend, you will fall out eventually. Thatís my experience, anyway. When my first business failed the bank chased me for the total amount of the guarantees when my partner couldnít pay his share. This was £40,000 and took 10 years to clear.
2. Plan ahead. Putting time and thought into a business plan and revisiting it regularly is worthwhile. Unless you have a target to aim for you wonít know when, or if, youíre succeeding.
3. Minimise your liabilities. Never take a charge on your house and try to avoid providing more information than a lender requires.
4. Do your accounts, get invoices out promptly and donít accept being messed around over payment. Pay suppliers on time too; it fosters goodwill and gets you more credit.
5. Monitor metrics. One of the many bonuses of the internet is that you are able to tell where your customers come from; how they searched and found you; how quickly they left and whether they actually bought anything from you. Using this information you are able to improve your website and also your customersí satisfaction, which can only be a good thing.
6. Hire the right staff. It is impossible to place a value on a hard working employee that cares about your company and where it is heading. Spending the extra on wages for key skill sets or talents that are suited to your business can be the difference between a 5 percent growth and a 20 percent growth in a start-upís early years.
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