What is needed to start up on your own
- Confidence, decision-making ability and dynamism essential
- Set out type of business, roles of those involved at start
- Mistakes and successes of yourself and others useful
Dreaming big, doing self-affirmations and taking risks are key to starting your own business. That is according to serial entrepreneur Jeremy Sanderson.
As chief executive of five firms—two self-owned, three managed for others—and with 15 years of experience in commerce in Japan, Sanderson has first-hand knowledge of what starting a business requires.
“One of the important things for going into business is having the confidence to bet on yourself and take a leap in the dark”, he told a captive audience at Regus Japan Ark Hills on 27 November last year. He was speaking at the British Chamber of Commerce in Japan’s “Small is GREAT VII” event, about what is involved in owning and setting up a successful business.
“Only you can judge whether you can take the risk of leaving a well-paid job and going to start a venture company, which is inherently a risky pursuit”, Sanderson added.
He explained that people with your best interests at heart will try to persuade you not to do so. This is just as his mother had done when, after having been fired, he declined two job offers and set up his first business.
“I always dreamed of having my own office with my own group of people, who were working in harmony to better themselves and trying to create something”, he said.
Despite attesting to the adage, “If you fail to plan, plan to fail”, Sanderson believes that most business is common sense, and is not a champion of extensive business plans.
Rather, he advises anyone starting a business to gather some concepts, get on the phone and meet people.
The entrepreneur outlined a number of key questions to be considered on setting up a business. First, it is important in the early stages to decide whether you want to own a company or a job (be self-employed).
Second, how you set up and grow your business—organically or with a large initial investment—is crucial.
According to Sanderson, the partnership route can be a good way to put together seed capital, but the role and accountability of all parties should be clearly outlined in a shareholders agreement from the outset. “Good fences make good neighbours”, he explained.
Sanderson started his firm, Icon Partners K.K., using his own money and that of his partners, whom he later bought out.
Yet, despite having spent it in eight months, leaving the firm in a precarious position, as it counted cash-flow in days, rather than months, he said he does not believe in borrowing money to start a business. Rather, once the business is solid, one may consider obtaining a loan to grow it.
Third, think about your exit strategy. Sanderson said his long-term entry approach of “growing a business for eternity” requires the profits to be reinvested into company infrastructure.
Those keen to sell their business in five years, however, should focus on fast revenue growth.
Sanderson also advised structuring the business for tax efficiency, and using a reputable judicial scrivener.
A self-confessed “unlikely CEO”, Sanderson, who started his first firm at the age of 41, claims his previous experiences taught him valuable skills.
He had his introduction to commerce at the age of 17. “I realised that if you work hard people pay you money and it’s rather nice, so if you get opportunities you need to have the courage to take them”, he said.
During his time in the police force, where he served in a number of positions, including as a firearms officer and royal protection officer at Buckingham Palace, London, he learned the need to study. Fate, too, played a role.
While recovering from a motorbike accident, Sanderson found Japanese language tapes in his local library. “I found I loved it and then very quickly decided it was going to be the direction of my life henceforth”, he said.
It was this passion that brought him to Japan, and resulted in his setting very high standards for himself that were to make a difference in later years. His jobs in Japan, too, helped him in his pursuit of setting up his own firm.
“The first company I worked for was a master class in how not to run a company”, he said, pointing out that the good thing about idiot bosses is that you can learn from them.
The lessons include how not to allow oneself to be taken hostage by “superstars” and saboteurs; leading from the front; and being willing to use your own money for the firm if necessary.
“In the first year of running a business, you won’t know what you are doing; it’s a very steep learning curve”, Sanderson said.
Yet, if you have decided to accept the high level of risk to start a business and can take responsibility for it, he explained, you are well qualified to do so.
Tips to becoming a successful chief executive
- Have a high pain threshold
- Take risks and move forward
- Have an excellent ability to control cash
- Be a polymath and a lifelong learner
- Gain, train and retain good people
- Be multi-skilled and willing to do any task