Yorkshire Business Mentor
Start up and SME business support
Name: Julian Horrocks
Position in the organisation: Co-founder
Years with the organisation: 5
Number of employees: None
Yearly revenue: Peanuts, it keeps me in beer and cigarettes
What does Yorkshire Business Mentor do?
YBM is an umbrella group of three like-minded individuals – David Thornton, Ron May and myself – who have decades of experience of starting and running businesses and support entrepreneurs and SME owners start/develop their own businesses.
For would-be entrepreneurs, we act as a sounding board, offering objective, impartial and constructive feedback on their proposed businesses. For both entrepreneurs and SME owners, we table ideas, make suggestions and recommendations and offer solutions to any issue affecting their businesses: we do whatever they want which normally involves providing second opinions and strategic input, making introductions, acting as an ambassador for their business, carrying out tasks and providing the ‘thinking time’ for the business which the owner hasn’t time to do.
What is your one motivating factor to assist Start-ups and SMEs?
Give something back by helping people start up and grow successful businesses. We operate on a semi-philanthropic basis. Initially, we give a few hours of our time free of charge to each mentee. Thereafter, if s/he wants to retain us, then we charge but at nominal rates – we’re not motivated by income generation: £20, maybe £25, per hour for a pre-revenue start-up, slightly more for SMEs, depending on their size and profitability. The reason we charge is because this instils discipline into the relationship and, anyway, offering something for free isn’t valued.
What are the most common mistakes start-ups make whilst setting up business and what tips would you give them?
One common mistake is being over-optimistic when forecasting the volume of sales that your new business will generate – and the speed at which they’ll be generated. Another is failing to raise sufficient working capital – start-ups often fail because they just run out of money.
One tip is: when planning your business, ask yourself the following questions – what need or demand does my product/service satisfy, what issue or problem does my product/service solve, why will anyone be interested in my product/service and want to buy it? Then, come up with a convincing answer. Another is: after you start trading, achieving breakeven on a regular basis should be one of your primary objectives since, until this is achieved, you are burning through your working capital. Consequently, your management of cash in the early days is crucial.
Could you please describe a successful case study on a pre-revenue start up?
The mentee’s business idea was a good one but s/he was a bit hazy about the target markets. By drilling down into more detail, we identified the most likely target markets and the key marketing/selling messages to be employed with each one. We then produced an action plan listing those markets, in order of priority, and a timeline setting out milestones by which certain targets were to be achieved – this injected more structure and focus into the business.
How can technology further assist companies in their growth?
Technology offers two benefits – first, it’s income generating since it provides a route to market and, second, it can generate efficiency savings for companies i.e. they can reduce overheads and make more productive use of time. It enables start-ups to test a business idea and carry out market research relatively quickly and cheaply: it can also be used to launch a new product or service. For some businesses, social media is a useful tool although it’s unlikely to produce results overnight – social media is long-haul, requiring persistence and consistency in terms of quality and relevance. The fall-out from Covid-19 has illustrated the vulnerability of some Companies’ business models – whether they change and adapt by making greater use of technology remains to be seen but it seems likely. It will depend on the extent to which Covid-19 does, as is so often claimed, permanently alter our lifestyle, habits and behaviour.
Negative feedback can cause major disruptions to a start-up, how should companies manage negative customer feedback?
Always listen to customer feedback, whether positive or negative. The market research carried out before the start-up commenced trading should have alerted the entrepreneur to whether his/her product or service will be received positively or negatively – hence why market research is so important. If the target market does react negatively, then perhaps the wrong market is being targeted or the marketing/selling messages are wrong e.g. the benefits of the product or service are not being explained or the wrong person is handling the sales and marketing or the pricing of the product or service is wrong. Equally, perhaps the business idea itself is just wrong – entrepreneurs need to know when to stop banging their head against a brick wall. In my experience, most do.
No matter what a business offers, there are other companies who provide the same products or services. What is your strategy for competitive differentiation?
Competitive differentiation does not just mean price – it comes in many forms e.g. a product’s reliability, quality, longevity, design and its features and functionality. Some products are unique in that they are bespoke to an individual customer e.g. soft furnishings. A high level of personal service – or rapid and efficient customer service – can constitute competitive differentiation.
One of these may amount to a USP – if so, then exploit that USP. Even if it doesn’t, any ‘difference’ factor should be consistently used in the marketing and promotion of the product or services. The ‘difference factor’ may also provide a name, or strapline, for the product – perhaps even for the business itself.