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Entrepreneur Gem Misa gives some advice on how to set up a business in straitened economic times.
It was the height of the recession when I left a steady corporate job to start my own little food company. Two years have passed and I look back and think I must have done something right. My products, RIGHTEOUS All Natural Salad Dressings, are in some of the best food halls in London, and this year we will be sold in Tesco and Waitrose supermarkets around the country. It is too early to gauge the level of success of my business, but I thought it would be useful anyway to share some of the lessons I’ve learned with others who are thinking of venturing down the same path. These are tough times for us entrepreneurs, so we have got to stick together.
Lesson 1: Learn how to adapt because things will almost always change
No matter how many business plans you do, there is always going to be that proverbial curve ball that will turn your plan on its head. So as much as you want to sell apples, you may have to make a few changes and sell apple juice instead. My original plan was to sell gourmet salads in supermarkets, but I quickly saw some issues working against me. There were the more obvious problems like absorbing high labour costs and ensuring each handmade salad was of consistent high quality. Then there were problems I only discovered halfway into the project, for example, finding out that it can take seven days for products to move from a supermarket warehouse to stores. So no matter how fresh the salads were at the beginning, it would be a very different story once they were placed on the shelf. So, rather than persisting, I had to sit back and look at what was working for the business and what was working against it. This is how I began selling bottled salad dressings.
Lesson 2: Make room for errors (emotionally and financially)
When planning for your business, you would normally list your sources of income, compare it against a list of expenses, and from there you would work out your profit. This works in theory, but often you will find that of income sources 1, 2, 3 and 4, only 2 and 4 seem to be working as planned; and along with expenses A, B and C – you’ll find expenses D, E and that very big and painful F unexpectedly pop out of nowhere. So now you are left with a business that is earning half of what you predicted and is spending double of what you had planned. So make sure to leave room for those unplanned expenses and attempt to make a profit or at least break-even on the most conservative and even the worst case sales scenarios.
Lesson 3: Spend modestly – if you can do it yourself, do it yourself
As tempting as it is to buy new office equipment and hire your own staff, try to start small and wait until you’ve got a proven business model before making any major investments. As well as being the founder and managing director of my company – I am also my own secretary, in-store promo girl, and PR representative. I have told myself that I shall reward myself by hiring an assistant only when this business really and truly starts getting off the ground.
Lesson 4: Get out of your comfort zone
My background is in marketing, so this is what I naturally gravitated to when I started my business. I didn’t want to deal with the boring legal or technical sides of the business, so I ignored them until I had to endure their expensive and time-consuming consequences. You must remember that this is your business, and any hiccups or failures can only be blamed on yourself. But on the brighter side, once you have an understanding of all aspects of your business you’ll be more confident about its potential and how to make it that business that you’ve always dreamt it would be!
Gem Misa is the Founder ofRighteous Living LLP, manufacturers of Righteous All Natural Salad Dressings. She previously worked as a Global Brand Manager for Unilever until she decided to pursue her dreams of setting up her own business.