Lessons from my first year in business
Tuesday, August 30, 2011/
Even the most successful entrepreneurs struggle in their first year in business. Indeed, many of the most innovative and profitable businesses in the world were built using the lessons learnt in those formative start-up days.
To help mark StartupSmart’s first birthday on Thursday, four of Australia’s leading business builders spoke to us about their own first year experiences.
They may now have combined revenues of more than $50 million, but respectively, the founders of Kikki K, Job Capital, RedBubble and Emma & Tom’s faced a variety of challenges in their start-up phases, ranging from bewilderment over financial terms to crashing delivery vans.
In their own words, each of them explain how they got through their first 12 months, as well as provide some invaluable tips for start-ups that are tackling their opening year.
Business: Kikki K
In a nutshell: Beautiful stationery sold in artily sophisticated stores.
Revenue: $35 million
I look back with fond memories. It was an exhilarating time of growth and learnings. While it feels like a lifetime ago, it also feels just like yesterday.
Even though we have come so far, we’ve just scratched the surface of where we are headed – which is, and always has been, global!
From the beginning I was very much focused on the big picture – with a vision to open beautiful stationery boutiques in my favourite cities across the world.
This vision carried us through the tough times. But in the first year our more immediate goal was just to survive – keep growing, keep developing products, meeting customers’ needs and building our business and our brand from the ground up.
We achieved this by being resourceful – leaning on friends, family and contacts where possible – and being really passionate about what we were doing.
It’s certainly not easy, so it’s important to stay focused and not get weighed down by all the hurdles that come your way.
I had no formal training, and English was my second language – so the hurdles were always going to be big!
Apart from not understanding some of the business terminology, I also had almost no skills in the areas of finance, accounting or bookkeeping, no idea about marketing, no idea how to run a retail store, no idea how to recruit employees and no idea what performance management was.
I’d never even heard of logistics or operations and had no idea how to put together a product development schedule, run a trade show, negotiate a lease, make a sales presentation, build a website or write a position description.
Having said all that, I had a great idea, a clear vision, boundless enthusiasm and I knew that I could always find a way to overcome challenges.
Like any start-up business we have made so many mistakes, but we welcome them all as learning experiences, and always have.
One of the mistakes that come to mind was when we expanded our store base quickly outside of our home base of Melbourne and into Sydney.
We didn’t realise at the time that when you set-up teams in new geographic areas a long way from your base, that you need to pay particular attention to ensuring the culture of the new team is aligned to the core business.
Because we had such a positive, fun, family style culture in Melbourne we just assumed that would evolve in Sydney without us needing to do anything extra – but of course it didn’t.
About a year after opening in Sydney we realised that our Sydney team had developed its own culture quite different to the wonderful culture we had in our home base.
In response to this we put in place a number of initiatives that helped us realign the culture of our team.
For example, we focused on more effective communication with our new teams, better processes for recruitment that meant we employed people who were a good cultural fit and better reporting processes.
We’ve now taken these learnings on board as we enter new geographic areas – and learning from this early mistake has brought the company great long-term benefits.
I think very little followed our expectations. In fact, being flexible and open was imperative as we were learning on the run.
Things never run as smoothly as you’d like – and as a start-up you really have to take every opportunity as it presents itself.
Being named Melbourne’s Most Innovative Store just six months after opening was a delightful surprise!
We always felt we were creating something unique and something special, but this recognition – and the media coverage that followed – really confirmed it for us.
Our first year was definitely the most challenging. Having limited financial resources was probably the hardest challenge I faced in my first year.
However, I overcame that by being creative, working hard and with “do it yourself” as my mantra in the early days.
It did not immediately get easier after the first year – but in the years that followed, the business grew and finally we were able to add resources to assist and help us grow – and that certainly made things easier.
If you’re a new start-up, definitely do something you’re really passionate about. You’re going to need to invest considerable energy and time into it, so make it something you really enjoy.
Having a crystal clear vision of what you want to achieve is essential.
Let it guide your decision-making and your team, and when times get tough (and they will), your vision has to be strong enough to pull you and everyone else though.
And most of all, have fun!
You can read a full StartupSmart profile of Kikki K by clicking here.