Get off to a flying Start-up

As a student at Limerick's School of Art and Design, Aoife McNamara had two interests: fashion and sustainability. She also developed a passion for Instagram. By the time she graduated last year, she had 15,000 followers on the social media site, all attracted by her distinctive sense of style. In February, she launched her women’s wear label, AOIFE, which sells exclusively through the site. Customers come from as far away as Australia and America. “It was always my dream to run my own business, but I never thought I’d be doing it at 23,” said McNamara. She joined a start-your-own-business programme run by the local enterprise office in Limerick. “I wouldn’t have a clue about how to run a business,” she said. Now, thanks to a priming grant from the enterprise office, McNamara has taken on a seamstress and invested in a new sewing machine. The business is already profitable. “The start-your-own-business course opens your eyes to just how far you can go,” she says.

Husband-and-wife team Ken Doherty and Gillian Doyle signed up for the course when they set up Cerebreon Technologies, which develops insolvency software, in 2016. Doherty previously worked in renewable energy and Doyle for a credit-management company, predicting debt recovery. Both have PhDs — he in applied maths and she in nanophysics — but neither knew anything about starting a business. The €100 the course cost them was one of the best investments they ever made, said Doyle. Last year they raised €835,000 from a variety of sources, including a business angel syndicate and a venture capital company. For Doherty, the biggest lesson was learning to cope with the lengthy sales cycles that selling into financial institutions entails. “We were a bit naive, in that we should have taken on a specialist in enterprise sales earlier — it’s a specific skill-set,” he said. Having investors brought not just cash, but financial discipline. Doherty had been keeping money coming into the household by doing outside consultancy work. “The advice we got from investors was that we needed to focus on the big prize,” he said. “In fact, stopping the consultancy work was one of the conditions of the investment.”

Cerebreon has 10 employees today but, when the couple were starting out, knowing where to devote time was hard. “There’s a lot to do when you’re starting a business,” Doherty said. “It can feel overwhelming. My advice is that, if there are 100 things to do, you should pick the most effective 20 and focus on them.” Doherty and Doyle also kept a close eye on costs. “An element of our strategy was to base ourselves in Donegal, because the cost of living is a fraction of that in big cities,” said the former. It can help to hold on to the day job — at least until the market research is done. “A lot of businesses start when the person is still in a job, working on the business at evenings and weekends,” said Oisin Geoghegan of the local enterprise office in Fingal. Many people use parental leave to explore their idea. Starting a business is not for everyone. “You have to be comfortable taking the risk and have the self-confidence to do it,” he said.

Microfinance Ireland (MFI) provides low-cost finance to small businesses. According to its chief executive, Garrett Stokes, the biggest mistake start-ups make is to pursue a solution to a problem that may not exist — or, at least, is not one people are willing to pay for. Another pitfall is trying to turn a hobby into a business. “Again, just because you think something is really exciting doesn’t mean there is a market in it,” said Stokes. Proper market research means asking potential customers for their views. “Friends and family are too likely to tell you it’s great,” he said. It is also worth canvassing opinion from industry. “They’ll tell you if it has been tried before — most ideas are not original — and, if so, what went wrong.”

Start-ups are weakest at finance and sales, he said. “Poor sales skills will let a great idea down. Get the right skills on board as quickly as possible, including someone good at sales, or good at social media if you are selling online.” It also pays to network. “It’s the best way to meet people who want to help you or who have that nugget of information you need, or who can recommend you,” said Stokes. Rohit Thakral, of Target Integration, a customer relationship manager software provider, took a loan from MFI this year to enable it to increase its staff from three to five. “It gives me a cushion, in that I’m not scared that if we fail, I won’t be able to pay staff,” said Thakral. Applying for the loan forced him to write a business plan. “It gives you a clear roadmap for where the business is going,” he said.

Stephen Dillon, owner of Startups.ie, organiser of the Start Up Awards and founder of Noki & Co, a non-alcoholic gin and tonic drink brand, is steeped in startups. In his view, the biggest challenge is finding the large amounts required to expand internationally. In the meantime, his advice is to stay as lean as possible. “Turn to other start-ups for things like photography, website design and search engine optimisation. It will not only be cheaper, but you may also be able to do some quid pro quo too,” he said. “The biggest mistake most of us make is underestimating the time it takes to get  traction,” added Dillon. “More than anything, you need staying power.”

-Bryan Meade

-The Sunday Times (Ireland)

-07/07/2019

 

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