Entrepreneurs are thriving in the UK, with the ONS reporting record numbers of people deciding to go it alone, become their own boss and start a business. But entrepreneurs – by definition – sit on an ever-winding learning curve and will always be open to new ideas about how they should do things.
What are the best places for inspiration? The international marketplace. Entrepreneurs are encouraged to look at the way their counterparts function in other markets in order to learn new secrets to success. The US is a very good starting point, given it’s been a hotbed of innovation for quite some time.
So what can small and medium sized business owners learn from their US counterparts?
Bravery in business
The key to business success is having confidence and never giving up. In the US, there is an idea that the best and most successful entrepreneurs ought to experience failure within a business to know and understand what it takes to succeed. Failing is a difficult thing to contemplate and have to go through. However, successful entrepreneurs are those who believe in themselves and their ideas, and are confident and tenacious enough to go back to square one – potentially repeatedly – when something doesn’t pan out.
Generally the Americans are considered to be very good at trying things, and when they don’t succeed, trying again. Here in the UK, we are known for being more conservative and more averse to risk, because many of us have an acute fear of failure. However, success comes in time for those who really want it. Therefore SMEs and entrepreneurs need to be tougher, even bullish, and more willing to take risks – and keep going if they fail – if they truly want to take the market by storm.
Financial support and backing
You may have a good idea, but you’ll need financial backing to turn it into a business. In the US, it’s quite difficult for SMEs and entrepreneurs to borrow large amounts of money to start their businesses, because banks tend to lend based on individuals’ credit rating. In the UK, this hasn’t been the case and SMEs and entrepreneurs have been able to secure bank loans in a lot of cases.
However, the advantage of the policy of US banks is that it’s forced US entrepreneurs to work out their finances right at the outset. It’s encouraged them to form a solid financial plan to fund their business venture throughout its lifecycle, rather than being reliant on bank loans. That has led them to secure a much better handle on the finances, and be much more careful with how they spend their money. Those relying on bank loans are often more carefree with their spending. This is why recent statistics show that 44% of SMEs either run out or almost run out of cash in their first three years.
UK entrepreneurs should where possible try to adopt this approach from the US. There’s nothing disadvantageous about working out the finances at an early stage, but losing control of them later can be fatal. Already things are changing. UK SMEs are being forced to think like their US counterparts because UK banks are more and more reluctant to grant loans for business start-ups. Increasingly business owners in the UK are looking at alternative sources of funding like crowd-funding and the government’s Funding for Lending scheme.
The importance of customers
Businesses don’t exist without customers, and while customers in the UK do get good service, expectations in the US are traditionally much higher. This means tolerance for bad service among Americans is very low. Try to match the US penchant for outstanding service by offering better customer service that your competitors. Even simple politeness goes a long way; Americans are so polite to their customers that British people are often taken aback by it. But too often in Britain, those serving customers barely muster a smile, let alone a “hello”, a “how are you” or an “enjoy your evening”. Don’t aim to meet customer expectations; aim to exceed them.
Looking for office space? Visit Send Business Centre here.