Page 23 - (DK) The Business Book

START SMALL, THINK BIG 21

See also: Finding a profitable niche 22–23 ■ Managing risk 40–41 ■ Luck (and how to get lucky) 42 ■ Take the second
step 43 ■ From entrepreneur to leader 46–47 ■ Learning from failure 164–65 ■ Small is beautiful 172–77

Younger entrepreneurs are In recent years, securing finance
increasingly a part of the start-up for start-ups has become a little
scenario. They may have gained easier. Many governments offer
the necessary skills for business by loan plans or grants. Entrepreneurs
their early twenties, and enjoy the with big ideas can access large
excitement and freedom of running funds of money and managerial Sustaining a business is
their own venture. support from venture capitalists, a hell of a lot of hard work,
whose sole purpose is to incubate and staying hungry is half
Keeping the faith start-ups. For smaller start-ups, and the battle.
While the reasons for start-up may for people with very little of their Wendy Tan White
vary, what all entrepreneurs have in own capital, micro-loans and UK business executive (1970–)
common is the willingness to take crowdfunding finance—such as
risks. Few entrepreneurs get it right that offered by Kickstarter.com—
first time—it takes resilience and are increasingly popular.
tenacity to keep going in the face
of failure, and it takes perseverance The business plan
to remain positive when customers, The key to securing financing is
banks, and financial backers a business plan. A good plan will failure is a lack of cash. While
repeatedly say “no.” Faith in the outline the idea itself, detail any loan capital can help for a while,
idea is essential. While some start- supporting market research, eventually a business must fund
ups require very little capital, most describe operational and marketing its operations from revenue. A good
require funding during their early activities, and give financial business plan will analyze future
growth phases. A business owner predictions. The plan should also cash flows and identify any
must be able to convince banks, outline a strategy for long-term potential shortfalls.
or other financial backers, that their growth and identify contingencies Beating the odds at start-up is
concept is valid and that they have (alternative ideas or markets) if defined by the tenacity to take an
the skills to turn the idea into a things do not go as planned. idea to market, the ability to secure
profitable venture, even though Most importantly, a good sufficient finance, and the business
this may take some time. It took business plan will acknowledge acumen to turn a good plan into a
Amazon six years to make a profit. that the biggest reason for business long-term, profitable enterprise. ■

“Tony” Fernandes Tan Sri Anthony “Tony” Fernandes in the company’s tagline: “Now
was born in Kuala Lumpur in 1964 everyone can fly.” One year after
to an Indian father and Malaysian his takeover, the airline had
mother. He went to school in cleared its debts of $11 million
England and graduated from and had broken even. Fernandes
the London School of Economics estimates that around 50
(LSE) in 1987. He worked briefly percent of its travelers are
for Richard Branson at Virgin first-time flyers. The company
Records as a financial controller is now widely regarded as the
before becoming Southeast Asia world’s best low-cost airline.
Vice President for Warner Music In 2007 Fernandes founded
Group in 1992. In 2001, Fernandes Tune Hotels, a low-cost hotel
left Warner to go it alone. He chain that promises “Five-star
mortgaged his home to raise beds at one-star prices.” He
the finance needed to buy the advises potential entrepreneurs
struggling young airline, AirAsia. to “dream the impossible. Never
His low-cost strategy was clear take no for an answer.”