All posts tagged Business

  • Starting your first business is like learning a new language

    Starting your first business is like learning a new language. You progress quickly and only then do you realise you know very little. But that doesn’t mean you should stop learning, stop progressing, because when you get to a point when you can converse with clients and business partners, nothing feels better.

    Attending holiday-language lessons gets you only so far, but it’s not until you get into a tricky situation do you realise you don’t have any of the required vocabulary to converse properly. You have a choice at this point: ask someone around you who can translate for you or lose out on what you really want to say.

    Running a business is very similar. You progress so quickly, registering your company, getting your first client, a whole world of possibilities seem open to you. Then, suddenly, you are faced with accounting, bureaucracy and legal issues and you hit a brick wall. If you don’t ask for help, you’re likely to get it wrong.

    When I first started my business, I was shy to ask for help. I wanted to learn and understand everything for myself to maintain ultimate control. After all, a business is like your baby, you want to help it grow, nurture it, but you always want to protect it too. I quickly realised that in order to protect my company, I sometimes needed to ask for help.

    Making mistakes can sometimes cost you dearly, but you will always learn from them. Surround yourself with people who know what they’re talking about and never be afraid of embarrassing yourself. (S)he who dares, wins.

    My top tips for learning to run your business fluently

    – Let people (including clients) know you are just a learner. This might sound totally against everything you think you should do, but believe it or not I got my first client by saying, “Hey, never done this before. New company, want to give us a go?” and landed a contract 15 times the capital I started the company with…

    – Find a mentor. Search Google for local mentor groups. Your local authority will probably have a few links too. Otherwise search further afield via the internet. Even a Skype or Email pen-friend is better than nothing. Someone you can bounce ideas off and someone who has done it before.

     Join a business community. There are startup communities popping up everywhere. I can’t tell you how much I’ve learned from chatting to a stranger over a beer in a local pub. I’ve pivoted entire sections of my business just from a single conversation that opened my eyes.

    Look for free workshops. HMRC run them. Your bank will offer them too. Your local authority may also run events. They’ll help you in the beginning with tax returns and legal advice. You’ll quickly outgrow them, but they make a great starting point.

    – Choose the right tools. No matter your business, some tools just make work so much easier. Try Trello for project management or reminder lists and Evernote or Google Drive for storing and scanning important documents. It really depends on your business, but there’s lots out there that can make your life a whole lot easier.

    – Cheat. Some tools are just too good to be true. My favourite cheat is business accounting software FreeAgent, which makes all your invoicing and accounting a right doddle. Highly recommended.

    – Practice makes perfect. Just like learning a real language, the more opportunity you get to practice, the better you will be. Also just like learning a language, make mistakes and you’ll never make them again. It’s absolutely fine to get things wrong once in a while and, so long as you’re honest, most, including the tax man, will forgive you.

    In bocca al lupo!

  • Pre-requisites to starting your own business

    A few of you will remember the government’s latest initiative to get the people of the UK starting their own businesses. The so called “Startup Britain Bus” has been touring the UK offering advice to potential new business owners. At least that’s what it says on the tin.

    Last week I drove into my hometown, Cardiff, where the bus was stationed for an afternoon. There will be people who have put a lot of work in behind the scenes so I don’t want to be too harsh in my critique, but it was, at least in my own opinion, an unmitigated disaster.

    I could rant here about how huge-corporation graduates from Microsoft, Intuit and Paypal were trying to sell their own products, but I think I’m going to leave things be. Instead I’m going to say what advice I would have liked to see, having already started up myself.

    I have an innate dislike of business speak. Ironic really considering I studied business at university, am an Economist reader and run a small business myself. I want to give you my three pre-requisites to starting a business, cutting out all the crap and confusion that normally accompanies these kind of things. Take from it what you like, but I believe they will set you on your path to achieving what you deep down have always wanted to do: start your own company.

    My three pre-requisites to starting your own business:

    1. Passion. You have to be passionate about your business idea. You are going to spend every waking moment for at least the next 12 months thinking about it. Don’t choose an idea because you think it’ll make you lots of money, choose an idea because you want to change the norm and do something new. Your main idea can be something old-hat, but make sure you are going into it with a little bit of you attached.

    2. Find out who you’re up against. When I wrote my original business plan I (stupidly) thought that Applingua was a never-done-before business. A day into my plan, I discovered I was so very wrong. Don’t ever assume anything. Spend at least a little time googling who you’re up against. Phone a few potential customers and ask whether they’d be interested in your product or service. Fortunately for me, my potential market is big enough for several competitors.

    3. Get a support network. Don’t attempt to start your own business without a support network. This can be friends, family, a bank or an investor. Starting your own company will take a lot out of you and you will need people to vent to sometimes (friends, family), but also share in the good times too (friends, family, investors). You will want people to talk things through with, to give you an outsider’s view of what you are doing. Never ever be arrogant, always ask for people’s advice.

    Your support network will unfortunately also have to include some saved money. I would recommend at least 3 months rent plus spending cash. I had to move back home to my parents house in order to start Applingua. Living here is rent-free and I’m now thinking of moving out. I am very grateful for my parents’ support.

  • An app, perchance to dream

    I recently made a small app to speed up the invoicing process at Applingua. As the majority of our customers are European, I must validate their EU tax number before zero-rating their VAT invoices. The EU provide a portal to do this validation, but anyone who has used it will know just how frustrating it is. It’s a problem, so this is my solution.

    The app is pretty basic, and pretty ugly too. It’s a v.1 that does the job – a “minimum viable product” for want of a better phrase. Currently you can enter the tax number, choose the member state it belongs to and Europa VAT will tell you if it’s valid and, if available, the address and company name. This saves considerable time over the EU portal that makes you enter considerably more data to get the same information.

    Making apps is certainly not Applingua’s main business, nor will it ever be. Europa VAT won’t even break-even with the time spent on it (a few days in total). However Applingua can profit from it in many other ways.

    Having an app on the app store gives Applingua a little street cred. I’ve dealt with iTunes Connect before, but now I can guide developers right through every step of managing localizations on Apple’s (awkward) platform. There’s definitely going to be a DevZone post on that soon. Additionally, I can now freely add localizations, screenshot code and fiddle with Cocoa Autolayout for new tutorials at my whim.

    Visit the app’s website: http://europavatapp.com

    Get the app directly hereClick Me

  • Q2: ROI on Time and Other Goodies

    Applingua Ltd’s second ever quarter ended on 30th June 2011 and, as promised in my Q1 ROI post, I’ve got some numbers to report.

    Q2 was incredibly different from Q1. Clients, developers and friends started referring to Applingua as an organisation in its own right and not as “Rob’s new project”. Revenue also increased and my client base tripled on Q1. The average number number of projects per client was and encouraging 2.5. 

    In my previous blog post I discussed how ROI  and ROI on Time tells only part of a much bigger story for new small businesses and “start-ups”. Return on Investment  alone can be used to decide whether a company is successful or not, it’s a superficial metric which assumes the sole purpose of a company is to produce maximum revenue. While Applingua could not exist without revenue, nor I without a salary, Applingua was not started as some get-rich quick scheme. Despite this, I still get that age old question from friends who hear I’m going at it alone, “so how much money you making then?”. If only it were as easy as incorporating and drawing a six figure salary over night.

    There’s so much more at stake. Learning opportunities, partnerships, networking. Even personal social life is affected by starting your own business. All things you can’t particularly quantify, but important nonetheless.

    At the end of Q1 I decided to compare 4 ROI metrics: ROI, ROI on Time, ROI (Social Life) and ROI (Learning). I wanted to take two solid financial equations and represent them alongside two of factors I deem important: Learning, because all I ever seek to do is learn new skills, and Social Life, because I’m fully aware no social life will eventually stop me from going at it alone and force me to return to an office environment where I can waste company time bond with colleagues over tea.

    I’m going to continue with these four metrics for Q2 to make a fairer comparison with Q1. If you would like to see how these percentages were worked out, see the original post.

    The big winner this quarter is clearly my return on monetary investment. Remember, however, that 3900% figure is 3900% ROI on initial investment (and I haven’t disclosed how much, or how little, initial investment was). The percentage shows gross profit, not revenue. ROI on time has also increased and I am now edging slowly back to my previous salary. I hope next quarter it will look more like 85%. Remember the bar is raised every month that goes by and is not simply my salary now vs before, but rather foregone salary over the last 6 months vs salary earned during the quarter at Applingua.

    Social life still takes a back seat again compared to my life pre-Applingua, but has improved considerably since being able to afford myself a fixed monthly salary and learning to say no at weekends unless absolutely necessary. I also set up @CardiffTweetup to meet new tech tweeps in my home town. Our second TweetUp is this week! Learning hasn’t particularly slowed down on Q1. I attended some great workshops (like this one), I learned a lot from new clients and from running a business. I also learned from my mistakes, I made a few which did cost me big on my margins, but we all live and learn.

    So there you have it. Applingua and my personal stats from Q2, April – June 2011. It’s been fun and things are definitely looking up for the future. Come back in 3 months and catch up!

  • Q1: ROI on Time and Other Goodies

    During the recent The Big M Conference, Raam Thakrar of Touchnote gave a talk on app distribution and monetisation. While there were many great points to take away from that day, one thing Raam said has played on my mind since: ROI on Time.

    Perhaps it’s my fault ROI on Time had slipped my mind, I should have gone to those economics lectures in first and second year instead of hanging out at the SU bar. So what exactly is it? Well, the concept is pretty easy: how much salary did you forego to start your own project? It’s very similar to the opportunity cost principle. How much salary are you missing out on by taking or rather making your own path?

    It’s quite difficult to find a good equation for ROI on Time online, so I’ve decided to work out my ROI on Time by adapting the standard ROI equation. Comments are enabled for feedback on this post.

    ROI on Time equation

    The perfect opportunity to calculate my ROI and ROI on time came last week when I finished my first ever quarter at Applingua Ltd. The results did surprise me. My initial investment was low and I know I surpassed what I put into the company in my first 2 weeks, but my ROI on Time was actually higher than I expected. During my business planning, I estimated I couldn’t expect a salary before May. That turned out to be two months early in March. The ROI on Time result sits just short of 50%, so in a monetary sense, I am actually losing out (and should perhaps quit and join an established company again). I would be interested in Raam’s opinion on when ROI on Time should be measured, after one quarter, 6 months, a year?

    It got me thinking. Starting a company isn’t always about money. In fact, if money is your only reason for starting a company I would suggest you stop now. A graph showing my ROI and ROI on Time would only be showing a very one sided argument for going into business. As many people in my position know, you often have to sacrifice certain things such as a social life to put in the time and effort to get your company started. A break in salary also affects socialising. So here’s that equation:

    Social Life Equation

    On the flip side there are also non-monetary benefits to starting your own company. Above all for me this has been the learning curve. I went from a basic academic knowledge of starting a company, to the practical rollercoaster that it really is. I now know how to navigate UK company regulation, from VAT returns to National Insurance Contributions. I’ve managed 11 freelancers over 2 different projects at once (with, admittedly varied success). I can’t even list the thousands of things I have learned from the industry itself.

    It’s difficult to create an equation for this. I tried first to quantify how many “things” I have learned. Difficult to quantify. I then tried to work out engagement: how often I am looking things up, how often I am seeking advice from others. Also quite difficult to quantify over the period of time that has passed. I then thought about it differently, about overall skills learned. Not those individual tidbits you learn everyday, but more the skills I could take away with me if I were to quit tomorrow. Again, not easiest to quantify, but there is distinctly a set of skills which are totally new to me now which I had no hope of learning before:

    ROI on Learning

    The results for social life and learning aren’t surprising, but I think they deserve to feature in any personal start-up ROI graphic. They are just as important as money to me and indeed if social life were to suffer for too long, I would certainly have to reconsider my choices. So let’s take the following graphic more as a benchmark to compare with Q2 and Q3 results.

    ROI on Everything

     

    So there we have it. The big winner is learning. The losers are social life and personal earnings. Company ROI looks strong and is good, but considering the small initial monetary investment, I’m aiming for triple that by the end of next quarter.

    All statistics should of course be taken with a pinch of salt. The old saying, ‘lies, damned lies and statistics’ rings true just as much here as any other report you read. While on paper I am earning less than before, I am far better off than I was. I had to move back home to start Applingua, I’m not paying rent or bills and we share food payments. This is a huge part of everyone’s salary, but not mine at the moment. Living at home has also an a negative effect on the social life score, as I don’t benefit from colleagues sitting right next to me.