The key to entrepreneurial success is relationship-building
Padideh Tosti isn’t your ordinary entrepreneur. With a background in intelligence and a PhD looking at drug-trafficking she comes to the table with a different set of experiences. After years working as a business consultant in London she has now started a company, Mirus World, helping start-ups, entrepreneurs and SME’s to find funding.
– The world has changed a lot during the last few years, explains Tosti.
– We are never going to go back to the way we used to do business, so we need to find new solutions. I wanted to be part of this time of creativity.
According to Tosti it’s a challenging environment for start-ups and entrepreneurs today, because;
- There is so much innovation out there right now, for every investor pound there are many projects. Which means that the competition is high.
- A place like London is also challenging because companies from abroad come here to compete for the investment opportunities the city has to offer.
- Today’s environment is also crowded because a lot of people who have been laid off in the city have started their own companies.
- Another challenge is that the barriers of entry to business are a lot lower than before. Young people can easily get involved and start their own business for example. It is in other words a crowded playing field.
So how do you stand out in this environment?
1. Try to be a little bit better than your best
Investors are busy and sometimes overwhelmed with opportunities. For some of the more innovative new businesses, there isn’t much historical evidence of which products will work and which will fail, compared to the property market, for example. Investors need to be able to assess the value of the product or business. Have good written proposals that demonstrate this, going the extra mile to explain your value.
2. Check the validity of your business proposal
Are you doing it because you can or because it is a business? You need to deal with the money question. Passion is important, but you also need a business case.
3. Don’t say you’re like Facebook or Twitter
We hear this all the time. But the environment has changed a lot since Facebook and Twitter started. Just because they were small and disruptive companies who made it doesn’t mean you will be able to do the same. Again, make the business case for today.
4. Don’t just find a market worth several billions and think that your product will crack even a small percentage of it
This is another statement we have become allergic to. In order to gain a share in a large market you need a lot of time and a lot of money. It takes huge effort and unless you know exactly how to do it, it’s better not to mention it unless you can show how.
5. Bring structure to the company
Have proper agreements in place and include contingencies if a partnership goes bad. Have a structure.
6. Know you’re as good as the investor
Don’t feel like you’re in an inferior position to the investor. Be confident about your strengths and your weaknesses. Be proud of your product, don’t go to the investor cap in hand. And remember that investors can smell shortcomings from a mile away.
So to sum it up. The best way to impress an investor is to have a solid, viable project and passionate, capable staff.
– Remember that investment alone isn’t going to get the business running, there is no magic that will happen. A good way to think about it is to figure out what your business needs and then find an investor that may compliment that gap, says Tosti. But do not expect an investor to do the all work for you.
Having a good pitch is just as important as knowing who to approach and finding an investor who is right for the business. The only way to do this is researching and networking – talk to others!
Relationships are the key to any successful business
– You must network. The keyword for the post-2007 environment is relationships. You need to be out there meeting people, make time for it because it’s the core of everything you do.
According to Tosti this is also a good way of combating the more problematic side of entrepreneurship – loneliness.
– It goes for entrepreneurs, SME’s and CEO:s, everyone should be out there talking to people. Go with openness and know that someone out there might have the answer to your questions, but that you might also be able to help someone else.
And in that lies the key to how we should all network, says Tosti.
– Go to events and even if an event turns out not to match your needs, go out and explore again and you will find doors that open other doors. I have never been to a networking event that was useless and I have never met a person that was useless. No person is useless in life or in business, they may just not be relevant to your needs now. Truly successful people in all aspects of life have a tremendous respect for others.
Image via Tim4.