The Centre for Enterprise and Entrepreneurship Studies hosted the first panel event of the year with a panel looking at the non financial motivations of starting a business.
Chair: Professor Nick Williams
Students who take enterprise courses or modules at the University of Leeds benefit from the advice given by the CEES Enterprise Ambassadors. These are entrepreneurs who give their time to pass on their knowledge and experience to our students. This advice is invaluable to future entrepreneurs as they have already learned the main ‘do’s and don’ts’ of setting up their own businesses. We currently have 23 Enterprise Ambassadors, three of whom joined this panel to discuss their experiences.
Panel: Rana Harvey (http://www.monstershop.co.uk/)
Richard Wright (http://preparetosell.co.uk/)
Jonathan Straight (http://www.jonathanstraight.com/)
Why did you become entrepreneurs?
The reasons for starting up on their own were varied. Jonathan Straight, a serial entrepreneur and philanthropist said that he first started his own company as he felt he was probably unemployable and didn’t want to work for somebody else. He spotted a gap in the recycling business and so set up Straight Ltd a supplier of recycling containers.
Richard Wright said he had been rather arrogant in his youth, and thought he would be able to run a business better than other people himself. He soon discovered that his arrogance was somewhat unfounded and learned the hard way that gaining practical experience and looking at the theory behind business models is just as important as enthusiasm. Richard said that his big mistake when he started up was underestimating the competition!
Rana Harvey said that her first business was as a result of personal/family circumstances, she needed to be able to work flexibly and not be bound by the constraints of working for someone else. Making money wasn’t the primary motivation, however it was extremely important to make a profit in order to keep the business running.
Richard said that when you are younger, profit is more important and as you mature and are more financially stable, the profit becomes less important. Making a difference and focusing on other areas than profit become more important. Rana agreed that at first, making money is the most important aspect, and as you mature you realise that what makes you happy is more important.
Panel Chair, Professor Nick Williams, wanted to know what motivated the entrepreneurs to continue with their enterprises when money is no longer the main point. Why keep starting up and running their own businesses, and have social principles had an effect on their business choices?
As the business becomes more financially stable, the motivations are no longer money driven.
Jonathan said that in his experience, the business enterprises he has tried that didn’t have an underlying social basis had not brought success! He said that when he ran the recycling container business, the containers were made from recycled materials. “If you are going to make a recycling bin, why not use recycled plastic?” When you employ staff, the responsibility of having to pay their salaries is terrifying. It’s not the making of the money that brings the pleasure, but the satisfaction that you are providing employment. He now works with charities and social enterprises and these bring him greater pleasure and sense of achievement.
Good morals and principals?
Nick asked the panel if they thought that they had always stuck to their principals during their time as an entrepreneur.
Jonathan Straight said yes, although he possibly used to shout a lot at the start of his ventures and was maybe less pleasant to work with. However, he said he has always used his word as his bond, and if he shook hands on a deal, would always honour it, even if it became apparent that it was not a great deal for himself.
Without trust in business, people will not deal with that organisation for long. Honour is everything.
He added that he has definitely calmed down and stopped shouting since his early days of entrepreneurship!
Richard agreed, that at the outset, his motivations were more selfish, over time the added values were more important such as the responsibility for the people in the team and their livelihoods.
Rana had attended a large trade fair that had cost a lot to exhibit at. It became apparent that many businesses there offered ‘incentives’ to buyers to place orders with them, such as ski trips etc. She noted that most of the businesses who used to entice buyers with sweeteners are no longer in business. She stated that offering good prices and good customer service is her means to keeping business.
Rana explained that over time, her sense of responsibility towards her employees had increased. For example in the early days, if someone couldn’t do the job, she was less sympathetic and would look to employ someone else. Nowadays, Rana says that she is much more careful about who she employs as they will be giving up a job to take up employment with her company. If they can’t do the role, then she looks at helping them with training to enable them to work better.
Why carry on?
All three of our enterprise ambassadors agreed that money is not a good motivator to continue in their enterprises. Jonathan felt that it must be unpleasant for those entrepreneurs who are never satisfied with their results and need to keep making more money. Once the money is stable, it would be easy to become complacent and stop taking risks. Other motivations must be sought to keep the business going.
When and how to take on staff?
A member of the audience asked how the entrepreneurs made the decision to take on staff. Rana said that she realised that she needed to be able to sustain paying staff, so she ran her business with an imaginary member of staff for a year to see whether the business could afford this. When this proved that the finances could support this, then she recruited. She likes to have a long and varied interview process, in order to really find out how the candidate works – setting tasks and unusual questions is one way of doing this. Jonathan said that he has always found that his best employees were people who had written to him to introduce themselves. Richard had taken the decision not to have any employees in his business! Nick asked how important employee’s personal values were. Rana felt that their personality is more important than values – if someone has a great idea, then the values come later on. Jonathan said that he can see if someone has ‘that twinkle in their eye, or a passion’, he can tell they are the right person. Richard agreed, that people buy from enthusiastic people – however the danger is that the enthusiasm can get lost the larger the organisation becomes and the more detached the person becomes from their original role.
How did you find what you wanted to do?
Look for a gap in the market – if something is annoying or missing for you, then it’s probably annoying someone else. Rana replied, if you are studying business, then learn the fundamentals and apply these to your venture.
Test the market – for example, pretend you have your idea ready for sale. Advertise it online and see if there is a demand.
You can reply that something is out of stock – but you have then got a list of interested customers – now make the product.
Did you have any mentors?
Jonathan said he learned from reading books and finding his own way in business. Rana said she had great help from attending the Goldman Sachs 10K Small Business Programme – a programme run with the University of Leeds and Goldman Sachs. Small business owners attended a programme of intense workshops on how to run a business and the networking with other entrepreneurs in the same situation was invaluable. Sharing their experiences and supporting each other is something that has continued after the course ended.
Where did the money come from to start your business?
Rana – borrowed money from the bank. Jonathan and Richard used their own money.
Do you have any difficulties running your own business?
It was unanimously agreed that running a business is a series of sorting out problems! That’s what it’s all about – and what provides the excitement
If you would like to find out more about the enterprise opportunities available at The University of Leeds. Please visit the enterprise page here.