Richard Branson's 5 Vital Startup Basics
Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.
Q: I'm a high school student in Sydney. I've been selling key rings and other collectibles on eBay for over a year. I've found that I love doing business, and would like to continue this in the future - I'd like to own a company myself.
I would like to expand my business to selling clothing and other items, but a large amount of homework and a lack of money is holding me back. What do you think I should do? -- Felix Yim, Australia
Felix, I really admire your enterprising instincts and ambition to expand your business. Running this startup will allow you to learn a lot about entrepreneurship, and with limited financial risk.
You've made some great choices so far. Your business does not involve growing or manufacturing a product, and the only office you need is likely your room at home. Through eBay you can distribute your goods to markets far and wide, reaching customers instantly and without a marketing budget. These are all tremendous pluses for any business, and especially for a young person without much access to funds.
Given the fact that you're considering expansion, it sounds like your enterprise is doing well, which brings me to your question about homework: I left school at 16 to run Student magazine, because I felt that I could not do well at both. Also, my dyslexia made schoolwork quite frustrating, and I wanted to focus on something I could do well. On the other hand, many people who become successful entrepreneurs complete high school and obtain university degrees.
When you and your family are discussing your options, remember that learning the ins and outs of running a business will be helpful to you throughout your career. I was around your age when I started up two ventures with a friend: growing and selling Christmas trees and then breeding and selling parakeets. They both failed: We hadn't realized that we had to protect our saplings from rabbits, which feasted on our tiny forest, and keeping large numbers of birds proved to be much more difficult and noisy than we had expected. This taught me to assess the risks associated with a business and to make sure that I had the resources and manpower to keep a venture going -- lessons that I have applied throughout my career.
However you decide to balance homework and business, here are a few basic steps you can follow to boost your enterprise:
1. The ABC's of Raising Capital
You indicated that you need money to acquire more products to sell. It can be very difficult for young people to obtain access to loans, but on the other hand, it's unlikely that you need to pay for living expenses right now, so any money you obtain can go a long way.
When I was starting out, I raised the cash we needed for seedlings and birds by doing things like delivering newspapers, washing cars and mowing lawns. Could you earn the money to buy your stock? If this is a good option, try asking your parents, neighbors or the owners of local shops if they are looking for extra help.
2. It's All in the Name
Have you come up with a good name for your store on eBay? A catchy name will help people to remember who you are and what you sell, and make it easier to find on search engines. Then put that name on every receipt and marketing item -- remind customers of it at every opportunity.
3. Hunt for Treasure
One of the best ways to keep customers coming back is to sell unique products that they won't be able to find anywhere else. At Virgin Records, we prided ourselves on offering customers hard-to-find albums -- we stocked live recordings of concerts and many foreign imports. In your line of business, you might search for collectibles at flea markets, garage sales and charity shops.
4. Stand Out From the Crowd
It would be good for business if you can find a way to make your store stand out from the others, especially on a site as popular as eBay. Providing great service is a good start, but your customers may need to know more about your ability to find and curate collectibles. We always looked for stunts or stories to make our businesses noteworthy. Is there something you could do to make news in the community of collectors?
5. Keep in Touch
Once you have customers, make sure you keep them coming back. Send them news about new products, special offers and other developments in their areas of interest. If you look after your customers, they are more likely to buy from you again and to recommend your business to their friends -- and a recommendation is far more valuable and cost effective than an ad.
Good luck! No matter what field you go into, remember the basics of success: Keep enjoying what you do and do what you enjoy.