The High Street is dead for startups

Why would you run a shop on the high street, except for tattoo, vape and coffee bars, I can’t think of a reason to do so.

The greed of local councils and national government  via business rates has well and truly killed the high street. The fact that business rates and the price of the property are linked means that the only people who win are pension funds as their balance sheet increases on an annual basis.

If a group of businesses work together to build the footfall of an area and look after the area, the rates will go up as the value of the properties will increase. If they are renting this from a landlord they will also put the rent up as the business rates should be linked. So local shops owners are not encourage to make the surrounding areas pleasurable. This is why councils are always do it, so it makes them more money through rates. When was the last time you say we will go to this town as they have nice pavements?

Local councils and also shopping mall owners have always been looking for that one mega store to have prime position, thinking it will draw in the customers, yet the majority of people go into town for a coffee these days. So I don’t see anyone soon taking a BHS sized positions and selling coffee. Their model is now destroyed.

If the shopping mall carves up the space into smaller units which doesn’t pay business rates or at a much smaller rate per sq ft, then the council loses out on their income.  So they are happy for the shopping mall to keep paying them for the empty store.

Everyone is locked into a system which slowing killing itself. It seems the stakeholders who make this happen want the high street to be unsustainable, the rent is too high, the rates are too high, the buildings are low quality in terms of size and energy efficiency. If they get someone to invest in the high street, then pension fund is not interested in the community. Its just a mess.

We all know who and what the competition is, Amazon, eBay, alilbaba, all of whom run low cost operations in low cost buildings with low cost employees and a flexible operating base.  

As customers we all want excellent service and this costs money: staff training, support and development over many years to ensure they know the product, the features and the benefits for every customer demographic who walks through the door. The customer is willing to pay, just look at coffee shops, tattoos and vape shops, all of which employ people who are passionate and knowledgeable about the product or service.

The high street should be the experience capital of a town, a place to go and take in the culture of the place, to engage with our fellow human beings on a peer citizen level. A place where it’s safe to walk in the fresh air and look and smell the sights. People are just as happy to go into town and walk around the market, watch a juggler and take a coffee. So all those councillors go figure, how this is going to make money for your town (and don’t just say parking charges or make the pavements look betters). Local councils need to understand they are custodians of an entrepreneurial retail ecosystem and they are failing because of their greed and lack of understanding of the real needs of their community.

High street is dead for startups
High street is dead for startups

Some charity shops should be banned from the high street as they provide no revenue for core services for local people. In some cases their products are more expensive, they don’t provide local employment and don’t engage with local community support. These shops should be handed over to a young unemployed people who can make a go of it and help local people.

Unless something radically changes in the UK, then the high street has lost all hope and will never recover from Woolworths, BHS, Littlewoods, C&A and a lots more. There has been many reports and yet noting has happened.

9 stages of Enterprise Creation

The way we start businesses is changing and through academic research, additional knowledge, skills and tools, the process and issues around growing businesses have profoundly changed in the last twenty years.  This article develops a new staged model which is based on today entrepreneurial mindset and the business community ecosystem which molds entrepreneurs and allows their ventures grow.

The first three stages which emerged are: Discovery, Modeling, and Startup which form the new venture formation stages. The next three Existence , Survival and Success develop the business into a sustainable business entity. The last three stages: Adaption, Independence and Exit provide the entrepreneurship pathways for the entrepreneur.  These final elements complete the model by focusing on the success of the business, how the entrepreneur progresses beyond the business, their separation into different entities and the entrepreneurs eventual exit.

Stage 1 – Discovery

This stage is centred around the focal competency of Opportunity recognition, creation and evaluation. These are the processes by which entrepreneurs identify and evaluate potential new business opportunities. An opportunity by definition is a favorable set of circumstances which creates a need for a new product, business, or service. Opportunity recognition is the process by which the entrepreneur comes up with a prospective idea for a new venture. Evaluating the opportunity takes research, exploration, and understanding of current needs, demands, and trends from consumers and others. The process of researching and surveying allows the product or service idea to develop, so that it can be modelled.

Stage 2 – Modeling

The second stage is about developing the business logic to create a business model. This is split into three parts and starts by setting out a Strategy, formulating a business model and setting the business processes to achieve the strategy . These form the key elements for the plan to start the business and, are an integral piece of submitting any proposal for an entrepreneurial or intrapreneurial business. The model should be underpinned by the resources available and those which may still need to be secured. Resource allocation and availability are extremely important to startups because sustainability and profit (not loss) depend on proper planning and understanding of the internal and external environments.

Stage 3 – Startup

The fourth stage is starting the enterprise. Once the resources detailed in the business plan are mobilised the entrepreneurial process can be effected and implementation can take place. In this stage the business may be trading or begin to research or develop a product. The aim of this stage is to have the processes in place so that the business can have a scalable, repeatable and profitable business focused on distinct customers within an identified market.

Stage 4 – Existence

At this stage the business has two core focuses; to gain enough customers to create a profitable business and, at the same time establishing production or product quality. The majority of businesses fail at this stage due, in part, to either one or both of these factors. At this stage the organisation is a simple one, the entrepreneur does everything and directly supervises subordinates, who should be of at least average competence. Systems and formal planning are minimal to nonexistent. The company’s strategy is simply to remain alive  which requires the focal competency of tolerance of uncertainty, risk and failure

Stage 5 – Survival

At this stage the business should be a viable entity in terms of cash flow and resources, it has enough customers and satisfies them sufficiently with its products or services to gain repeat sales. The organisation is still simple. The company may have a limited number of employees supervised by a junior manager or supervisor. Neither of them makes major decisions independently, but instead carries out the rather well-defined orders of the entrepreneur. Formal planning is, at best, cash forecasting. The major goal is still survival, and the entrepreneur is still synonymous with the business. The entrepreneur starts to implement ideas through leadership and management which provides opportunities to scale.

Stage 6 – Success

Entrepreneurs at this stage have a number of options: capitalise on the company’s accomplishments, expand or, keep the company stable and profitable. The entrepreneur has a number of ways to capitalise, from exit to taking a ‘founders dividend’ from the business. If the entrepreneur want to expand  then the core tasks are to make sure the basic organisation stays profitable so that it will not outrun its source of cash and, to develop managers to meet the needs of the growing organisation. Through the entrepreneurs leadership all managers within the business should now identify with the company’s future opportunities rather than its current condition demonstrating a success to its stakeholders.

Stage 7 – Adaptation

Businesses which reach this stage normally have a number of factors pushing them to adapt, these are normally grounded in changes either to the micro or macro environments. Businesses at this stage will normally be entering a phase of rapid change and will have to have secured the required finances to develop. At this point key management is in place with a set of operational systems. Operational and strategic planning are now a key focus. The organisation is decentralised and, at least in part, divisionalised. The key managers must be very competent to handle a growing and complex business environment. The systems, strained by growth, are becoming more refined and extensive. Both operational and strategic planning are being done and involve specific managers. The entrepreneur and the business have become reasonably separate, yet the company is still dominated by both the entrepreneur’s presence and stock control.

Stage 8 – Independence

A business at this stage should now has the advantages of size, financial resources, market share and managerial talent. Innovation and Intrapreneurship  are now key factors in keeping the business in market position. The organisation has the staff and financial resources to engage in detailed operational and strategic planning. The management is decentralised, adequately staffed, and experienced. Business systems are extensive and well developed. The entrepreneur and the business are quite separate, both financially and operationally.

Stage 9 – Exit

At this stage the entrepreneur is focused on exiting the business and making their separation permanent. An exit strategy will give the entrepreneur a way to reduce or eliminate their stake in the business and, if the business is successful, make a substantial profit. This stage removes the entrepreneur from primary ownership and decision-making structure of the business. Common types of exit strategies include Initial Public Offerings (IPO), strategic acquisitions and management buyouts. The organisation at this stage is generally profitable, has a definable set of resources with a clear and realistic strategy to continue. The CEO and founder(s) are separate.

 

9 stages of Enterprise Creation
9 stages of Enterprise Creation

The full paper:  Bozward, David and Rogers-Draycott, Matthew Charles (2017) Developing a Staged Competency Based Approach to Enterprise Creation. Proceedings of the International Conference for Entrepreneurship, Innovation and Regional Development. ISSN 2411-5320, can be found at http://eprints.worc.ac.uk/5377/

Amazing Entrepreneurs we have forgotten

Sometimes we forget that we humans just continue to do the same thing over and over again. The old adage “Nothing is new under the sun” always comes to mind. So every now and again I need just to remind myself of this fact that there are Amazing Entrepreneurs we have forgotten.

Even with the internet, fastest ever broadband, mobile phones and instant everything, there are many before us who just; firstly made this possible for us and secondly also had it all.

Lets look at five I admire.

Matthew Boulton, Entrepreneurial Manufacturer

Born: 3 September 1728

Birth Place: Birmingham, West Midlands UK

Industry: Entrepreneurial Manufacturer

Matthew Boulton Carl Frederik von Breda 30 Most Influential Entrepreneurs Of All Time

 

 

 

 

 

Website: www.matthewboulton2009.org

Wiki: https://en.wikipedia.org/wiki/Matthew_Boulton


Richard Trevithick, Steam Engine

Born: 13 April 1771

Birth Place: Tregajorran, Cornwall, England

Industry: Inventor, mining engineer

Influence: Pioneered Steam Engine

 

Website: https://en.wikipedia.org/wiki/Richard_Trevithick


Isambard Kingdom Brunel,

Entrepreneurial Engineer

Born: 9 April 1806

Birth Place: Portsmouth, UK

Industry: Civil & Structural Engineering

Website: https://en.wikipedia.org/wiki/Isambard_Kingdom_Brunel

 


Andrew Carnegie

andrew carnegie 30 Most Influential Entrepreneurs Of All Time Born: 25th November, 1835

Birth Place: Dunfermline, Fife, Scotland, UK

Industry: Steel Tycoon

Influence: Pioneered many manufacturing processes.

Website: www.carnegiescience.edu


Anita Roddick

Anita Roddick 30 Most Influential Entrepreneurs Of All Time Born: 23 October 1942

Birth Place: Littlehampton, UK

Industry: cosmetics

Influence: Green Product Pioneer.

Website: www.AnitaRoddick.com


So today spend some time thinking about these amazing Entrepreneurs we have forgotten and how people still have the same needs, wants and needs for us Entrepreneurs to make or sell them products and services.

Do you know your Exit Strategy?

You will need to ensure you are motivated to exit the business and that means understand the path for your exit strategy. In every sense you must learn from the exit from your business and the experience should motivate you to build a new enterprise which is more amazing and motivated that this. The five common Exit Strategies are:

Initial Public Offering

The stock market offers you the opportunity to increase the capital available to the business, the money invested and also the rewards available to you. The motivation for being independent will have to reduce as shareholders and accountability move into play.

Acquisition

When you have created a truly unique, thriving and attractive business, it will be becoming an appealing proposition for other businesses. When they offer you the large sum of money for your business, what motivates you to say ‘Yes’? What will you do everyday when you no longer have your business to run? The opportunities are then truly amazing and you can become a member of ‘Serial Entrepreneurs’ club.

Liquidation

Walking along any footpath can be uneasy and the same is true about business. The vast majority of entrepreneurs have a company liquidation in there bag, an experience they will never forget, an event which created some the best lessons they have ever learnt. No expects you to walk straight away, so why do you expect to be able to manage a business from day one without making mistakes. This should be expected, however it is in the learning about business, enterprise and yourself which you can create a truly amazing and vibrant business next time around.

Sell to another Entrepreneur

One of my favour saying is that “People buy from people who are like them”. This is the case from buying your newspaper to buying a company. Entrepreneurs look for opportunities and therefore within your network you will know people who want to buy and run your company better and pay you for the chance.

Shareholder

This option which many entrepreneurs follow is to become a shareholder which then provides revenue for the rest of their lives (e.g. Bill Gates). In some cases the shareholder provides revenue for many generations to come, such as the Guinness family. This exit requires you to create a good team around you who are motivated to continue to move the business forward.

So before you start out on your venture, think about your exit strategy and  what you will need the business to look like for you to achieve your goal.

 

The five types of student entrepreneur

After working with over 20,000 students in the last ten years, I have started to stereotype those coming through into five simple student entrepreneur categories. There is no real theory and a great amount of research here, but I just wanted to share my thoughts and observations on these student entrepreneurs.

Wanta-preneur

This group of people want to mega rich, famous and of course a owner of a super big business. They just want it all! Yet hard work, planning and dedication to entrepreneurship is not at the core of their motivations. They sometimes do start businesses, normally with co-founders who do all the work, while they talk about their business, the people they know and the mega plans they have.

Pros : Great talker who other may believe
Cons : Lacks hard work and dedication

Business-Anarchistic-preneur

Staying the same is not an option, so these people think of distributive technology, business models and taking all the biggest businesses, traditional methods and societies. They know that they will succeed as its only there ability to change the world that will save it.

Pros : Out of the box thinking
Cons : Others don’t take them seriously, just too radical

Social Entrepreneur

This group not only want to start a business but one that helps others. They have great amounts of passion, dedication and drive to see this business idea into a fully developed business. These people understand the need to develop others, work in teams and share the value of their business with as many people as possible.

Pros : A Team player
Cons : Takes too long as brings too many people with them

Geek-preneur

The richest people are Geeks, so why not start the the next Microsoft, Apple or Facebook. These people can make technology work for them and create small dynamic businesses which engage users throughout the world in their dream creation.

Pros : Easy to start boot strapped business
Cons : Lacks people skills to engage others

Just-do-It-preneur

This group just get on with it, never thinking for one moment they can’t. What they lack in skills, knowledge and network, they balance with the shear determination and brut force. They are the bull in the china shop style of entrepreneurship.

Pros : Self belief and determination to make it a success
Cons : Lacks style and skills which makes others believe

As with all people and businesses it about having the team, a set of skills and maybe every business should have a mix of these.

 

So which type of student entrepreneur are you?