MT Expert's Ten Top Tips: Make a million before lunch

How do you get the maximum return from a start-up? Here are ten top tips on making that first million.

Last Updated: 31 Aug 2010

Wondering how to turn your brilliant business idea into a juicy capital gain? We asked author and Sunday Times enterprise editor Rachel Bridge for her tips on making a fat profit – and fast...

1. Make your start-up easy to sell
If you want to make a serious amount of money from your business, you have to sell it. Becoming profitable as soon as possible will make it easy for a buyer to put a value on it, as well as giving a buyer the benefit of a ready income stream and confidence that they are buying something with a future.

2. Don't borrow
Securing a business loan comes with as many headaches as being turned down for one. Arrangement fees, administration fees and renewal fees and interest will all up the cost of borrowing, and it’s very likely that you will have had to put up your home as security for the loan. Borrowing from friends and family’s just as stressful: they might be more forgiving if you miss the odd payment, but think about the consequences if your business fails and you lose all their money. The answer? Start a business that doesn’t require a chunk of money to get it going.

3. Don't be an inventor
One of the most common misconceptions among would-be entrepreneurs is that to create a successful business, you need to invent a new product. Sadly, it takes years to get an invention from drawing board to the shelves of Tesco or B&Q and it requires far too much risk and pain for someone financing it by remortgaging the family home and feeding the kids baked beans on toast for a year.

4. Do something you understand
If you want to create a million-pound business from scratch, there’s one very obvious thing to do: something you know about. It’s amazing how many people jump into starting a business with no experience of the industry they’re entering.

5. Put your business online
It’s hard to believe the internet is only 20 years old. By now, even the smallest stores have realised having a website can increase the flow of customer traffic to their 'real life' store. But as a first time entrepreneur you can do away with the idea of having a shop altogether. Putting your business entirely online means your overheads are much smaller.

6. Get to grips with risk
There’s calculated risk, and then there’s foolhardiness. When you’re starting a business for the first time, you need to be very clear about which one you’re taking. Starting any business involves taking some kind of risk, but there are different levels, and you need to find one you’re comfortable with. Be clear about what you stand to lose – not just what you stand to gain. Fortune may favour the brave but it does not favour the foolish, and simply putting everything you own on the line doesn’t make it more likely you’ll succeed.

7. Remember: outsourcing is your friend
Entrepreneurs used to be limited to outsourcing book-keeping and accountancy. These days, though, you can outsource pretty much everything, from administration to manufacturing. Outsourcing means you only pay for what you actually need, which means when times are quiet, you’re not paying for an underused employee to sit around twiddling their thumbs. In turn, that leads to lower overheads and greater flexibility. But you do need to be just as rigorous in choosing an outsourcer as you would be choosing an employee. Ask around for word-of mouth recommendations and interview several possible outsourcers before narrowing down your choice. Always ask for references, and choose on ability rather than price.

8. Set tangible goals
Goals are the key to creating a successful business by marking out a distinct path in what could otherwise be a whirl of confusion. Have a strong idea of what your ultimate goal is, as well as smaller, regular tangible goals to meet along the way.
9. Ask for help
When you’re running a business, it’s tempting to think you can and should do everything yourself, but by creating a team of experienced people who can give you practical help and advice, you can make use of their knowledge. It can be hard to admit you need help, but it can make an amazing difference your chances of success.

10. Break the rules
One of the most compelling reasons to start a business is knowing that this is the one area in life where you really can do it your way. There are few areas in life where you can genuinely tread in untouched snow but amazingly, thrillingly, starting up a business is one of them. Rules are not there to be blindly followed, they are there to guide and to suggest – and then possibly to completely ignore.

- Rachel Bridge is the enterprise editor of The Sunday Times. She'll be performing her one-woman show, ‘How To Make A Million Before Lunch’ at the Pleasance as part of the Edinburgh Fringe Festival. Got any more tips? Add them below…

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