Attaining a director-level position within a well-established company is regarded by many as the pinnacle of business success – yet it’s not uncommon for directors to move on to start up their own ventures. If you’re ambitious enough, entrepreneurship represents an opportunity for business success on a truly personal level, no matter your age, background, or level of career success to date.
In 2012, I decided to move on from my director-level position at a FTSE 250 recruitment company in order to develop a new business of my own. My reasons for doing so were similar to those of other would-be entrepreneurs: a desire for independence, ownership of the risks and rewards, and the opportunity to turn my business idea into a reality.
I did – but it wasn’t easy. When you leave the boardroom behind, you’re abandoning relative security and embracing the unknown. The initial excitement dissolves into panic, you subject yourself to constant pressure and your decisions to constant scrutiny, and the spectre of potential failure looms large at all times.
If you want to avoid unnecessary complications, ease the transition, and launch a profitable business, you’ll have good answers to the following questions.
1. What’s my company’s competitive difference?
Establishing competitive differentiation should be the starting point for any new and aspiring company. As an entrepreneur, you’ll need to think about how you can make a real difference in your chosen market, specifically what needs to be changed – and how you can change it in a way that hasn’t been done before. Your company should either make something easier or fix something that’s broken.
If you’re struggling, use your own experience for inspiration. What frustrated you the most during your time in the boardroom? What caused inertia, inefficiency, or anything else that prevented you from achieving your business objectives? The solutions to these problems are often simpler and more attainable than you might think.
Whether you find them, of course, often depends on your team. It doesn’t matter how good your idea is if it can’t be executed, so find people who share your excitement for the project – and who have the skills necessary to bring it to fruition.
2. Do I have the necessary funding?
When it comes to launching a business, securing funding is crucial – but it isn’t easy. It doesn’t matter how comprehensive or well-organised your finances are, creating a new company almost always costs more in terms of time and resources than you might expect.
If you’ve got a good enough idea, you’ll likely be able to take advantage of several funding options - all deserve some consideration. It’s up to you to decide how much of your equity you want to release, if any. You may also be entitled to assistance from government programs.
Explore all your options, and develop a compelling, focused pitch for potential investors: no entrepreneur was ever limited by having too much money.
3. Am I asking for input whenever I need it?
While you can’t make decisions by committee, there’s no shame in asking for help from time to time. No entrepreneur is an island – well, no successful entrepreneur. When you’re in charge, there’s always a temptation to make decisions unilaterally: to tackle challenges head on, without apologies or justification.
Resist it. You don’t have to take anyone’s advice, but it’s often helpful to seek outside perspectives in the midst of a tricky or complex situation. Good companies are run by people who are willing to learn and to open lines of communication.
4. Am I leading?
The appeal of taking the lead on an exciting new venture is a driving force for many entrepreneurs. The reality is altogether less glamorous.
Leading a business is complex and multifaceted. On one hand, it’s about guiding the progress of the business by securing funding, pacifying investors, and hitting growth targets. On the other hand, it’s also about leading people, including balancing the interests of multiple departments, making key hires, and forging a strong company culture.
If that sounds like more or less everything, it is. Most importantly, however, you need to be the calm at the centre of the storm. If you can avoid chaos, be consistent wherever possible, and stick to your original company vision, your stakeholders will thank you for it.
5. Am I using my experience?
Many modern entrepreneurs tend to be completely unready for the rigors of business. Being a director-entrepreneur, you won’t have that problem – so put your experience to good use.
If you’ve spent time in sales, recruitment, and product development, you’ll likely have an understanding of what the people who work for you are actually doing, and how to get the best out of them. This experience will only be of good use to you when it comes to planning out the structure your new company, making hires, and developing internal processes.
Richard Prime is co-CEO of recruitment finance provider Sonovate.