Home' Trinidad and Tobago Guardian : June 5th 2014 Contents Q: I'm from Pakistan, where
venture capital funding is not
yet readily available. How can
entrepreneurs here ensure cash
flow in a startup's early days
and pay salaries to employees?
What are the top three building
blocks needed for entrepre-
neurs to transform a startup
into a sustainable organisation?
After seeing so many tech
startups rocket to billion-
dollar buyouts so quickly
in the past few years,
some new entrepreneurs
might mistakenly think
that starting a business is an explosive sprint
that ends quickly. In reality, it s an endurance
race that only a few survive: According to
Bloomberg, 8 out of 10 companies fail within
18 months of opening for business.
There is no hard and fast rule that dis-
tinguishes the two businesses in 10 that
survive from those that fail: Business-threat-
ening challenges can pop up at any moment,
no matter what you do. However, one of
the best ways to protect your enterprise is
to make choices with the long term in mind.
Here are some tips on three areas where
your decisions will make a difference for
years to come.
1. Choose your clients carefully
When you re launching your startup, it
may sometimes be tempting to take orders
or make deals that you can t afford to fulfill
in hopes of gaining clients. This is almost
always a mistake. If your business grows
too fast, you ll likely end up producing an
inferior product or service and disappointing
those customers; and if you re unlucky, the
JUNE 2014 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG13
entire enterprise will then fall flat.
It may be difficult to take some time out in those
first hectic days of launching your business, but
before you sign any deal, you must consider the pro-
posal carefully, keeping the bigger picture in mind.
Sometimes you may need to pass on an order for
the good of a fledgling enterprise. You might lose a
little business, but it s better to focus on building
steady growth rather than on gaining quick wins;
this is how we ve been building the Virgin Group for
more than 40 years.
The No 1 killer of startups is cash-flow problems,
so as you review any new deals, be sure to think
about how payments should work. A common issue
smaller businesses face is late payments from big
corporations, so be sure that you re clear about pay-
ment terms before you sign any agreement. Don t
be afraid to ask for part of the payment up front, if
that s what the health of your enterprise requires.
When you start delivering your product or service,
send your invoices promptly as agreed and keep close
watch on payments. If you run into problems, be
honest with your own suppliers about the difficulties
- they may be willing to wait until you are paid so
that they can keep your business.
2. Choose your employees wisely
Rather than hiring staff you can t afford, start small
- I began one of my first businesses, Student magazine,
from a telephone box with an idea and 300 pounds.
Doing all the work by yourself may be difficult, but
it will also help you to explore your idea s strengths
When you do
have funds to bring
ensure that they
buy into the pur-
pose of your busi-
ness. This will
motivate them to go the extra mile to make it a
success. (I have written more about how to hire in
other columns - for more, please take a look.)
3. Find a mentor
When we launched Virgin Atlantic, my mentor
was the great Freddie Laker, the founder of Laker
Airways. British Airways muscled his business out
of the market long before we came along, and his
advice was invaluable in helping me to establish a
successful airline, to British Airways dismay.
He was the best sort of mentor: an entrepreneur
whose business had been in the same sector, so he
could warn me when I was about to make a mistake.
And as he reminded me, if you do make a mistake,
all is not lost; it s how you learn from such experiences
If you are having trouble finding a mentor, Web
sites like Eventbrite can be useful. You are likely to
meet potential mentors at entrepreneur meetups and
other gatherings; it is often surprising how willing
entrepreneurs can be to help each other. Whether
you are based in Pakistan or Peckham, Portland or
Peru, we are all part of the same community.
Ibraheem, good luck with your startup! Whichever
industry you decide to enter, don t overlook the pos-
sibility of reaching potential customers online, since
Pakistan has so many mobile customers. Now go for
it!(Richard Branson is the founder of the Virgin Group and
companies such as Virgin Atlantic, Virgin America, Virgin
Mobile and Virgin Active. He maintains a blog at
www.virgin.com/richard-branson/blog. You can follow him on
Twitter at twitter.com/richardbranson. To learn more about
the Virgin Group: www.virgin.com.)
(Questions from readers will be answered in future columns.
Please send them to RichardBranson@nytimes.com. Please
include your name, country, e-mail address and the name
of the Web site or publication where you read the column.)
@2014 Richard Branson. Distributed by the New York
To succeed, start small
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