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In the beginning, there was a business plan...

on Friday, 17 August 2012. Posted in Start-up Diaries

Each month entrepreneur Nicola Barron tells us stories from the coalface of running her craft workshop business, Homemade London

In the beginning, there was a business plan...

  I started Homemade London two years ago, to offer craft workshops to people who wanted a sophisticated, luxury experience. It was my first venture after taking redundancy from the BBC, where I had worked for more than a decade, and my answer to the question that must haunt everyone who takes redundancy without a job to go to: what do I do now?

  In the three years since I began to think about the business, I have made nearly every one of the mistakes common to firsttime entrepreneurs. That’s not because I hadn’t prepared: before I started, I enrolled on a business course, read every start-up guide I could get my hands on, spoke to every experienced business person who would give me the time of day and buried myself at the British Library’s Business and IP Centre for weeks on end.

 As a result, I felt I ‘knew’ what starting a business involved. But at the back of my mind, I also thought it would be different for me. I think that’s probably the natural state of the entrepreneur – otherwise we’d never put ourselves through the pain. Every new business is based on the belief that your company will offer something a little bit different. And if you’re different, then maybe none of those scare stories you hear about will happen to you.

  But they did. Homemade London enjoyed the classic start-up trajectory. Year 1: Loss, leading to doubt, leading to fear. Year 2: Signs of promise, leading to adjustment, I leading to hope. This column isn’t about how to avoid that journey, but how to deal with it. I was pretty proud of my business plan. I’d written and re-written it. I got my business loan from Lloyds TSB on the strength of it and, while it painted an optimistic picture, I was secretly pleased with myself over the restraint I showed over my financial forecasting. But after two years, Homemade London the business looks nothing like Homemade London the business plan. That’s because I’ve had to adjust as I’ve gone along, doing more of what works and less of what doesn’t – tweaking prices, replacing courses, trying to build new revenue streams and abandoning activities that looked unlikely to pay off.

  The balancing act to get right is to stay completely faithful to the essence of your original vision but to be flexible about everything else – to strive for perfection, but never to wait for it. That’s the Beta Principle adopted by companies like Google, that are happy to launch early and let their customer base act as the ultimate feedback loop. For a business like mine that has to deliver a wonderful customer experience every time and relies heavily on word of mouth, this suck-itand- see approach can’t apply to the workshops themselves, but it can to our business model. For example, when I first opened the shop, I imagined that the mainstay of the business would be evening classes, booked by individuals and small groups. While I waited for these classes to take off, I relied heavily on hen and birthday parties at weekends to keep us afloat. After about six months I realised that rather than parties being peripheral, it was actually our core business.

  For start-ups, time and money are at a premium, so I switched my focus to building up the party business and growing our corporate offering during the week when it was quieter. That decision proved fundamental and required a hundred other little changes to the business including a shift in mindset for myself and my team of teachers. A large proportion of our customers, be it for a corporate event or for a party, haven’t actually made the decision to take part in one of our workshops themselves so we’ve got a big job to do to win them over: more often than not it’s not what we’re offering our customers but how we offer it, that’s most important to them.

  In those first crucial months you need to be attuned to what your business is telling you – even if it contradicts the logic of your own business plan. The entrepreneur’s gut instinct never lets you down.

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