Follow the DREAMS -

Stop making excuses and get started

By Luke Johnson

Published: April 28 2009 22:00 | Last updated: April 28 2009 22:00

In my travels, I meet quite a few would-be entrepreneurs. Some of these characters have a vision of starting or buying a business, but always seem to find reasons to do nothing. Their excuses as to why they have not created an enterprise sound convincing, but in truth none of them really stands up to close examination.

First on the list tends to be a lack of capital. There are lots of solutions to this one. My first business, when I was 18, was a venture with an Oxford nightclub where student friends and I promoted themed evenings and took the door money, while the venue owners kept the bar takings. The operation needed no capital at all – always the best type for absolute beginners.

Other situations may need some funding, but often less than founders think. I am often impressed at how first-time restaurateurs seem to fit out premises on a shoestring – using second-hand equipment, helping out themselves with the refurbishment and so on.

Most things can be done on a budget if your life’s dream depends on it. And even now there is equity backing out there. There are all sorts of pockets of institutional and private cash for a sound project, from government agencies to angel investors. It has never been easy to tap these sources of finance, so you need to be good – and persistent. Howard Schultz, founder of Starbucks, did more than 250 presentations to raise the early-stage funding to really kick-start his coffee bar chain.

A second imagined obstacle is income: people get addicted to a nice safe salary as an employee, and are unwilling to give it up for the uncertainties of the entrepreneurial life. It is true that plenty of the self-employed earn less than they would working for others – and may put in longer hours. But they do it because of the freedom and fulfilment it brings – and because they refuse to give up on their hopes.

Howard Schultz, founder of Starbucks, did more than 250 presentations to raise the early-stage funding to really kick-start his coffee bar chain

During my early 20s I took little time off – when I wasn’t working for others, I ran sideline businesses at weekends and during holidays – until I felt able to finally break free and become a full-time entrepreneur. In some ways I wished I had not delayed, but had taken the plunge straight from university.

I accept that there are those who have heavy domestic responsibilities – a mortgage, family obligations and so forth. But anything really worth having requires sacrifice – do you want to deny yourself opportunities and live a life of regrets? Right now many are facing redundancy, so there may not be any salary coming in anyway – what have you got to lose?

A third reason is the idea: too many wannabe entrepreneurs are waiting for a breakthrough concept to arrive one day, fully formed and ready to launch. But capitalism is not like that.

Most new businesses do something pretty similar to many others – they provide familiar services or products, fulfilling a definite demand – with perhaps an incremental improvement. You do not need an earth-shattering invention to achieve success.

Those triumphs are rare, and usually happen after immense heartache. What you want is a solid proposition that generates sales and cash quickly, using the skills you already possess, with economics you understand, and serving a known market.

A fourth reason is risk aversion. Too many people fear failure more than they want to win. Of course, your start-up might prove a vain attempt at the prize, so you may lose money, time and pride. But 2009 is, in fact, a great time to fail. All around us companies and institutions are going wrong, including many of the world’s largest and grandest. Everyone who has achieved much has suffered setbacks. And you know what? No one really notices or cares. As Confucius said: “Our greatest glory lies not in never failing, but in rising every time we fail.”

I predict that many great companies will be started in the next year or two, by those brave enough to believe in the future, energetic enough to seize the day and optimistic enough to deny the possibility of defeat.

There is never a perfect time to begin the journey. But if you have ambition and are willing to apply the effort, stop making excuses – get out there and start battling.

lukej@riskcapitalpartners.co.uk
The writer is chairman of Channel 4 and runs Risk Capital Partners, a private equity firm

Copyright The Financial Times Limited 2009