Tips For Getting A New Business Off The Ground by Luke Johnson

Over the weekend, in The Week, I read these start-up tips by Luke Johnson which were originally published in the Wall Street Journal Europe.   Luke Johnson, chairman of private equity house Risk Capital Partners, has made a success of businesses as varied as Pizza Express, bingo and dentistry.

Here are Luke’s tips if you are contemplating going into business for yourself:

Consider moonlighting or going part-time. A steady income to cover personal overheads can be a life-saver while you develop your concept.

Do what you know. Don’t plunge into a new sector without doing extensive homework. If you start up in an  industry you know, you’ll benefit from contacts and credibility.

Always write a comprehensive plan. Even if you don’t need to raise cash, it’s worthwhile expressing your thoughts coherently. Include a timetable, product and customer descriptions and financial projections as a minimum.

Consider finding a partner. Teams are generally more likely to succeed than one-man bands – and are often seen as a better prospect by capital providers.

Never give a bank or landlord a personal guarantee. You risk being made bankrupt if the business fails. Too many first-timers agree to such demands.

It’s the execution, not the idea that counts. First be sure you’re willing to do the gritty essentials, like selling and book-keeping.

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