Tuesday, 23 November 2010

What price entrepreneurship?

Dragons Den and The Apprentice might make setting up in business look easy, but James Averdieck of those exquisite Gu Chocolate Puds warned otherwise at the Marketing Society Annual conference last Thursday.

Using data gathered from the business angels he has worked with to build and sell a £ 28 million business, here's what he's learned:

- A business angel will review 2000 business plans on average in a year.
- 1950 of them will go straight in the bin. Of the remaining 50 he/she may choose to invest in 10.
- After 5 years 5 of them will have gone bankrupt, 3 are just ticking over.
- Only 2 generate the returns that keep his business alive!
Even modest mathematicians will be able to calculate this amounts to a 99.9% failure rate!

So what makes a good entrepreneur? For James it still comes down to some simple marketing basics:

1. Start with a great product.
2. Stand out in the crowd.
3. Get people talking about it.
4. Be seen in the right places.
5. Create the right team and culture.
6. Look after your customers.
As a start-up this can seem relatively easy.
So what's the biggest challenge of all?
7. Scaling the business while keeping the quality.

Sound familiar?

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