The A To Z Of Entrepreneurship

Somebody asked, so this is my list, with handy links for more context:

A

Advisory Board. Get one as soon as you can. You can fill your Board with experienced people from lots of different backgrounds, who’ve likely faced the same challenges you’re grappling with. And they won’t cost anything, because they’re doing it to keep their minds active and to make new contacts for themselves.

Age. Getting older is not a barrier to starting your own business. In the UK in 2023 35% of new businesses were started by people aged 50+. Youth brings ideas, energy, determination and unbridled self-belief. With age you get the same (maybe dialled down a notch) plus experience, credibility, connections and time. Don’t be afraid to start your own business after you’ve retired, and don’t be afraid to hire older people – they can be accurate, reliable and a steadying influence.

Ambiguity. Embrace it.

B

Board of Directors. When the time comes consider a mix of execs and non-execs.

Bootstrap. Use as much of your own resources as you can before you start pulling in investors or borrowing money. Start your business in your bedroom, or the local coffee shop. Use spreadsheets to keep track of your customers and your accounts. When you start a business it has no value, because it hasn’t achieved anything. You need, at least, to get to the point where you can say to an investor, “these are my customers and this is what they buy.” You’re beginning to be investable.

Born or Bred. Bred, obviously.

C

Cap Table. Your Capitalisation Table shows who owns how many shares in your business and what happens in the event of an investment - the extent to which you are diluted. It’s very important to know this if you want to make money from the business you’ve created. If you'd like me to send you a Cap Table to play with, buzz me up. Hours of fun on a rainy Sunday afternoon.

Cash. It’s surprising how many entrepreneurs focus first on making a profit. But profit doesn’t pay the bills, it’s the hard cash in your account which does that. Know how many days/weeks/months of cash you have based on your current level of incoming money and outgoing expenses. Profit is very important, because it tells you if your sales income is higher than your combined cost of sales and your discretionary expenses. If it isn't you will always eventually run out of cash. And you only do that once.

Contracts. Get to know what a sales or supply contract looks like. And understand how investment documents work. Remember a contract is not the terms of your engagement with a customer or supplier, it's the terms of your divorce. Treat it like that and you won't go far wrong.

Customers. Sit on the same side of the table and solve their problems.

D

Debt is Cheaper than Equity. It may not be immediately obvious why this is the case, because you have to repay interest along with the capital when you borrow money. And giving away equity (shares in your business) comes with no repayment obligations. But if you exchange 50 new shares for £5,000, each share is worth £100 today. Imagine your business grows and a new investor agrees with your valuation of £1,000 per share. Suddenly the shares that were worth £5,000 now have a value of £50,000. That's way more than a loan would have cost you. It's not easy to borrow money as a new business, but if you can it can be the much cheaper option in the long run.

Delegation. To grow your business you need people who can do the things you used to do. Fully understand each role yourself personally, then recruit, train and delegate. I'm mean really delegate - let go of the task you used to do. Watch the results carefully, but give your new hire the freedom to do the job and add their own uniqueness to the role.

Director. It's your company, so you're the director. Know your responsibilities.

Disruptive. Your business must disrupt another business, a method, a market strategy or a supply chain. If you can't do that, you haven't got an investable idea.

Domain Name. When your business has a name it has an identity. Get yourself a domain name early on, so you can create your website and social media profile. It's embarrassing when you start a business, call it something and then find out someone else has taken the name. Remember, your domain name doesn't need to be the same as your company name. You can be Plastic Solutions Ltd. trading as GetYourBathDuck.com if you like.

Due Diligence & Warranties. Gosh, are you about to have fun!

E

Elevator Pitch. Always have one available. You never know when you need it.

Employment Contract. You may own the business and have all the shares, but if you're a limited company (and why wouldn't you be?) then you and the company are different entities and it employs you to do a job. So you need an employment contract, as does anyone else who works for you.

Equity & Dilution. You only need to give away 20% of your equity in each of 3 investment rounds, and you're about to lose control of your business. The equity you have in your business is VERY VERY valuable.

Experience Curves. Use them to competitively win.

Extraordinary Performance. You maybe smaller than your competitor, but you're nimble and you've got fantastic people giving extraordinary performance.

F

Fire Yourself. Establish a clear set of operating principles and let the team get on with it.

Front Door, Back Door. Not a weird after-hours game but a better way to think about your customers.

G

Getting Cash Out. You can't just put your hand in the till every time you need a fiver. You should be better organised than that.

Growth - the 3 rules for growth are Revenue, Gross Profit and Net Profit, in that order.

Growth vs Lifestyle - know the difference about the type of business you're trying to achieve.

H

Happiness. Be happy.

Hats. You wear many hats; know what they are.

Hiring. You need your team to be competent and enthusiastic.

Holiday. From time to time you need to take a holiday, to relax and unwind. You'll generate more ideas and solve more problems when your stress levels are reduced.

Home Working. It’s OK when you’re on your own, but if you have a team of 2 or more you need to be working together to cultivate ideas.

How Growth Eats Cash. It takes money to grow. What started out as a healthy cash position suddenly went south when you pushed the grow button. You need to take steps to make sure your cash grows as your business does.

I

Ideas. Where do ideas come from?

Intellectual Property. Investors love them but they don't necessarily protect your business.

Interviewing Skills – develop them and come up with some good questions.

Investment Rounds – carefully plan each of your investment rounds – your valuation, investment required, equity to give away.

J

Joker. People are more productive when they’re happy at work. Use humour to keep the mood light and move meeting roadblocks out of the way.

K

Key Drivers. These are the product or business attributes that you excel at. Know what your key drivers are, how the competition compares and what targets you have.

Kill Your Product. Don't let your product die a slow lingering, painful death. Kill it.

L

Limit. Limit your liability with a limited company structure. If it doesn't work out, you can quite legally go bust and start again. And it's all been some ghastly, horrible mistake, you can walk away free of debt, ready to get on with the next great idea.

Listen. You love the sound of your own voice and you've got something really important to tell people. But when words are coming out of your mouth you're not learning anything - except how fabulous you are. Listen to what people are saying and learn from them. It's free.

M

Matrix Management. Larger organisations might employ matrix management structures. With a few simple rules these can be very effective.

Mentor. Get yourself a mentor, someone who doesn't have a vested interest in your business, but with whom you can vent your frustrations and bounce ideas.

Minimum Viable Product. Go for the MVP as fast as you can.

Month End. Fix it firm.

N

New Shares & Old Shares. Get some money out for yourself by selling some of the shares you own during an investment round.

No Barriers. Don't put artificial barriers between you and your customers or suppliers. Thoroughly understand their businesses, so you know how to get the most out of the relationship.

Non-Disclosure Agreements. Completely useless. If a customer or supplier wants you to sign one, then just make sure it's mutual. Otherwise don't bother.

O

Options and Shares. Use share options to incentivise staff; you’ll get them back when they leave.

Organisation Points of Tension. It's critical that you think about organisational design.

P

Paranoia. The idea of strategic inflection points.

Payables. Manage the money that you owe to your suppliers.

Pitch Deck. The essential information you need to prepare for investment.

Process. It's important to have processes in your business, so you know how to handle different interactions, but be careful not to kill initiative.

Product Management. One of the key roles in the business.

Q

Questions – ask them a lot and listen carefully to the answers.

R

Receivables. This is the money owed to you by your customers. Late payers can seriously damage your cash flow.

Recognising Revenue. Receiving the cash from a customer might be very different from when the sale is registered in your accounts.

Recruit, Retain, Develop.

Rich. How to get rich.

Risk of Failure. Use risk as a way of experimenting and understanding more about your customers, competitors or suppliers.

S

Sales & Marketing. As soon as you can afford to, separate these roles.

Secret Sauce. This is about the secret ingredient in your business that your competitors can’t emulate. IP is not a protector any longer, but your secret sauce can be.

Sell In Versus Sell Through. Understanding what your customers’ customers want. Sell in is sales, sell through is marketing.

Sizzle Verses Sausage. Sell your sizzle.

Spinning Plates.

Spreadsheets. Do everything on spreadsheets until you have the money and understand enough of the process to buy-in software.

.

Successor. Whether you're an entrepreneur in a large corporate organisation or you run your own business, planning your succession is key to advancement.

T

Teacher. Be the teacher, and teach your team their roles so they can do them and get better at them. Telling people what to do, without explaining why, creates a team of automatons -

U

Under Promise and Over Deliver.

Unique. You need to offer your customers something unique.

V

VAT. Register for VAT as early as possible, and get money from HMRC.

Vision. Having a vision is important. It sets your mission into context and drives the operational performance of the business.

W

When is a Sale a Sale? When you have the cash. Before then it's just an unfulfilled promise.

Work/Life Balance. An amusing concept, not grounded in reality.

X

EXtraordinary Performance - you need extraordinary performance from your team because you’re up against strong competition with infinite resources.

Y

Year End. Fix it.

Z

Zero to 100. This is about one minute being able to talk to investors about your vision, mission and operational plans and the next minute talking to your team about the intricate details of your website colour and design. And feeling comfortable in both discussions. As the CEO you need to know everything about your business until you can delegate the responsibility to someone else whom you trust to handle it with the same care and attention-to-detail when you did it.

Please butt me if you think I've missed something.

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