Tuesday, August 6, 2013

How to launch a startup business that lasts

Like quite a few successful technology companies, the story began with a teenager starting a business in his bedroom equipped just with a PC and a dial-up modem. That teenager was me and I was 14 when I started a web-hosting business.

Since then I've grown my company, 4D, into a fully fledged co-location and connectivity provider with data centres in London, Surrey and Kent. Here are my top tips for launching a startup business that lasts.

Work 24/7

I left school at 17 to devote more time to the business; being an entrepreneur is a full-time job and if you are serious, you have to forget evenings and weekends or nine to five. Think 24/7 – or something that is quite near to that.

Think big

By the time I was 21, the business had grown to a six-figure turnover but I realised that most of my revenues were being absorbed by renting space in other suppliers' data centres. This led to the idea of buying one of my own.

The only problem was where would I get the money?

I thought the business concept might appeal to one or more private investors. So the first step, and with hindsight the most important one, was to prepare a credible business plan. To do this I bought an off-the-shelf package and simply followed the instructions. Step-by-step, the business plan emerged with a financial model which turned out to be remarkably accurate.

On the basis of the business plan I was able to convince a private investor to put up the money, not just to acquire the building, but also to finance the growth of the business during the first two to three years following the acquisition of the new premises.

The funding of the initial working capital was important because my business plan showed substantial losses until sufficient revenue could be generated to cover the very significant running costs. Unfortunately, the overheads have to be paid from day one, whether you have one or 100 clients.

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