New entrepreneurs are too hung up on putting together extensive business plans and on having a great idea, a business start-up adviser will tell a Workingmums.co.uk event in Manchester tomorrow.
“Programmes like Dragon's Den spend 90% of time on the idea; nine per cent on research on the marketplace and just one per cent on the team. The main thing that real top venture capitalists care about is the team. Entrepreneurs spend too much time on the idea,” says Neil Lewis of Media Modo.
He says they also tend to over-obsess on the business plan. “I have never seen a business plan which turned out to be true. People write them because they feel they ought to or because everyone else is doing it. I do not know a venture capitalist who has invested in an 80-page fabulous document if the owner could not also express what their business did in one sentence. If they can't write it on the back of an envelope they cannot really communicate what it is and what they are trying to do. Often an 80-page document is an excuse for not taking action.”
Lewis, founder of Media Modo, a start-up support group, is taking part in a seminar on starting your own business at Workingmums LIVE at Manchester's Lowry Hotel tomorrow. LIVE is a one-stop shop for all things flexible working, with hosts of family friendly businesses and franchises exhibiting and seminars on everything from work life balance to childcare.
Lewis set up Media Modo in 2009. His background is in information publishing. He set up his own business in 1999, beginning in e-book publishing and moving eventually into property brokering in central Europe. He knows the highs and lows of running your own business. At one point his business had a £4m turnover, having started in a back bedroom. The business operated in Spanish and English.
“It grew organically, but the wheels fell off, the property market collapsed and we attempted to innovate but failed. The analysis of the property market was dreadful for five to ten years. It didn't make sense to invest. We sold information products on the net and that peaked in 2004 and people started expecting everything for free again. The business closed down and I walked away,” he said.
He added that he learnt a lot about business during this period. “I learnt a lot in the eight years that the business grew, but twice as much when it shrank and closed,” he said. One of the critical things he learnt was about the importance of creating a good team and Media Modo has a tool for helping start-up businesses develop good teams.
Lewis advises would-be entrepreneurs to grow their business while working part time in a paid position. He also advises them to hook up with freelances. “They are more flexible and are used to a degree of uncertainty and pressure. Their number is really growing,” he says. Media Modo, which produces a series of business tools including finance tools, also runs a freelance group in the North West.
Women and business
The organisation is also about to launch a business accelerator in Manchester on November 11th. “We are aiming to create and launch five high growth businesses in a weekend,” says Lewis. “It's about giving people the freedom to do something new and different. It helps generate insight and learning even if they fail.”
He says women make up around half of his audience at freelance events, but adds that there are far fewer women at accelerator events. He thinks this may be because freelance work gives people the ability to choose their hours and cuts the costs of childcare. “It has real advantages for working mums and carers,” he says. He is not sure why women are not as attracted to the accelerator - whether it is the way the course is structured, whether women are more focused on local businesses rather than high-growth businesses or feel they don't have the right technical experience for them.
Lewis believes that women will benefit from new workplace cultures which are less hierarchical and more about loosely based networks which focus on relationships. “Women have just as much opportunity to be successful in this model as men,” he says. "The problem is that the media is still fascinated by the old command and control business models and leaders such as Alan Sugar. The more effective modern style doesn't have the same profile.”
He says that in addition to technology allowing more home-based start-ups, another factor in women entrepreneurs' favour is their facility for using social networks like Facebook. “They seem more comfortable than men communicating on these platforms,” he says.