Sir Tom Hunter is one of the richest men in Scotland. The son of a grocer, he began his career by selling trainers from the back of a van.
This led him to build up a chain of sports shops which he sold to JJB Sports in 1998, making over £250m.
He is known for his extensive charity work and has pledged to give away £1bn in his lifetime.
In this video he discusses his advice for young entrepreneurs with pupils at Oakgrove Primary School in Glasgow.
With many banks tightening their purse strings and grants or other start up incentives becoming much harder to find, many entrepreneurs may need to find alternative sources of funding to get their start-up off the ground or fund their expansion. Indeed, 65% of entrepreneurs planned to seek alternative finance in 2012, according to a survey by Huddlebuy.
With this in mind, in December 2011 Business Secretary, Vince Cable MP launched a taskforce to open fresh funding channels for small UK businesses – putting particular emphasis on the opportunities of Crowdfunding.
What is Crowdfunding and how does it work?
Crowdfunding is an alternative method of raising finance for a business, project or idea, popularised by Kickstarter.com in the United States.
Unlike angel investment, in which one person typically takes a significant stake in a small business, with Crowdfunding an entrepreneur can attract a ‘crowd’ of people – each of whom takes a small stake in a business idea, by contributing towards an online funding target.
It is believed that, in many cases, this model is more successful than attempting to source the full investment required from a single individual or organisation. Furthermore, while some investors may be hesitant to invest in an unproven idea, Crowdfunding provides an alternative way to source seed capital from a number of backers.
How much does it cost?
The majority of Crowdfunding platforms won’t charge you for publishing a pitch, however they typically take around 5% commission when you reach your target – so you need to factor this into your investment total. If you don’t meet your target, you don’t pay a penny.
Sites such as Crowdcube.com maintain the quality of pitches on their site by validating each one by financial scrutiny. They also only accept pitches from Limited Companies. These challenges are not insurmountable however, especially for the committed entrepreneur.
To encourage people to invest in your start-up, most websites ask you to offer staggered rewards (such as exclusive access to your first product or a five-year discount on your services) according to how much people invest.
The HMRC can also offer tax incentives through the Enterprise Investment Scheme (EIS), where investors can claim 30% tax relief on qualifying investment opportunities.
Is Crowdfunding for me?
Some questions to ask before you embark on a Crowdfunding campaign.
Despite the general doom and gloom about the economy, bank lending and business outlook – now is exactly the right time to start your own business.
Here are 7 reasons why every young person should start their own business
1. Part time income vs. Part time job
If you are fortunate enough to find a part time job, chances are you will be rewarded at the UK national minimum wage of £3.68 per hour (under 18s) or £4.98 (under 21s).
Working 15 – 20 hours per week is barely going to cover your essential expenses, let alone help you save for anything more substantial.
If you applied those 15-20 hours per week into your own business, do you think you may be capable of generating more than the £60 – £100 you are earning now?
2. Follow your Passions
Your own business can give you the opportunity to follow your passions. Do you have hobbies or pastimes where you can literally lose yourself for hours? Would earning money from these ever really feel like work?
Ask yourself the question has anyone ever earned money from doing what I love? If the answer is yes, look for ways in which you can do something like that too.
3. Information Available
With the popularity of TV shows like the Apprentice and Dragons Den there has been a real increase in access to advice, tips and inspiration to start your own business. Even the Government has realised that supporting enterprise is the way out of the recession.
There are more websites, books, TV programmes, podcasts, videos and courses available today than at any other time in history. Chances are your local library has more business advice than you could ever read – for free!
4. Low Cost – Low Risk
There was a time when starting your own business involved high start up costs for premises, vehicles, machinery or other equipment. Banks wanted collateral or security on loans, which meant that aspiring entrepreneurs either needed money behind them or had to put up assets such as a home to get started.
For many this risk was too great and crushed dreams before they could really begin.
The internet is a real game changer. Businesses can be started online for pennies, ran from bedrooms, kitchen tables or even coffee shops. The internet allows businesses to trade worldwide 24 hours per day, while free services such as YouTube, Facebook and WordPress allow you to get your message out to a potential audience of millions.
5. Personal Development
Running your own business can be great fun, but is also likely to involve some effort. The payback is not only financial but can also be measured in your own development. Skills of communication and financial awareness together with qualities of perseverance and self reliance can be by products of the business process.
These life skills will be of benefit whether you chose to remain self employed, employed or enter higher education.
6. Mindset
Allied with personal development will be the mindset you develop as an entrepreneur. The can do attitude, the openness to try new things and explore new possibilities will be of great value to you as an individual and to any potential future employer.
It was once felt that the entrepreneur was a bit of a maverick who didn’t fit well into corporate life. More recently however big business has realised that the flexible, innovative, can do approach is exactly what is needed to move their company forward.
7. Little Acorns – Mighty Oaks
Everything big was once small. By starting your own business you are launching something which one day may be the next Google, Facebook or Marks and Spencer. You don’t need to wait until genius strikes or come up with the next amazing gadget or phone app. People have achieved substantial business success in every conceivable area. The one thing they have in common was that someone had the courage to begin.
I’ve recently finished reading the excellent biography of Steve Jobs written by Walter Isaacson and had several big business lessons and ah ha takeaways which I wanted to share.
Business lessons from Steve Jobs #1
Firstly Jobs was a perfectionist, obsessive about detail. He wanted customers to have a great experience in not only using an Apple product but even in taking it out of its box. The design and feel of the packaging was created to give the user the impression of quality and ‘specialness’. It made me think that we sometimes put all the effort in making the sale, but miss the opportunity to show the same level of care and attention to detail in the packaging.
Business lessons from Steve Jobs #2
Secondly when he accepted the diagnosis that he may not have long to live, rather than staying home and feeling sorry for himself or taking time out to recuperate, Jobs redoubled his efforts at work. His thinking was that if there was only a little time left better spend it doing what you love. Made me think how much time we may waste in jobs or situations that we aren’t loving and how much happier and fulfilled we would be if we committed to living our passions.
The book does not portray Jobs as a saint, but certainly a genius in many different ways. Please comment below on any business or life lessons from Steve Jobs which resonate with you.
