This is a good read and a well laid out summary of the challenges of starting a company I found it on http://www.startups.co.uk/ , It started me thinking around the subject of fast growth, how it can mask company inefficencies, but on the other hand it allows you to have cash to fix problems quickly and without budget constraints.....
Company name: Versarien Ltd
Founders: Neill Ricketts, Will Battrick, Jim Murray-Smith
Age: 41, 32, 61
Staff Numbers: 3
Date started: 20/12/10
Tell us what your business does:
Versarien is an advanced materials company specialising in a new form of metal foam with exceptional heat transfer properties.
Where did the idea for your business come from?
Versarien is commercialising a technology that has been developed from a Technology Strategy Board project. The original concept was the product of some research from the University of Liverpool but Versarien has significantly developed this original idea.
What’s your unique selling point?
The material replicates structures that occur in nature – in this case with a very large surface area and excellent heat transfer properties. The product is unique in that it is very scalable, material-efficient and cost-effective to manufacture.
What were you doing before starting up?
I am a graduate mechanical engineer who is passionate about UK innovation and manufacturing. I was made redundant from my last job as a main board director of a UK technology PLC. This company was one of the best performing shares on the AIM market during my time there and created significant shareholder value.
Have you always wanted to run your own business?
I have run my own business previously. I find the constraints of most organisations and the inability to think outside of the box very frustrating. I like to develop good teams that outperform expectations. However some corporate people tend to be intimidated by this fast progress. I like to work in companies that do not limit their success by their own blinkered approach.
What planning did you do before you started up?
We worked hard (and continue to work hard) to plan. We spent a large amount of time on developing a good business plan. A number of contacts aided in the market research.
How did you raise the money to get started?
We are still raising money and it has been a very difficult few months. Raising money for a pre-revenue business is one of the hardest projects I have ever done. It is harder to raise a small amount of cash than a much larger one. We have had a few rejections but only if our technology didn’t fit a sector.
Is your product manufactured in the UK or abroad?
Our product is manufactured in the UK in small numbers at the moment. We use the capacity which is available in the supply chain when needed and source our raw materials in the UK.
What challenges have you faced and how have you overcome them?
We have had to be very creative in trying to manage a limited budget and still achieving everything we need to. We have had to forego wages and put everything we have into the business. Prioritisation has been the key, in my humble opinion, and using every trick in the book to beg, borrow – but not steal.
Where is your business based?
We are currently operating from my office in Gloucestershire (at home), but we are hoping to move into a factory unit shortly. We have located a very favourable unit on a revitalised Rank Xerox site in Mitcheldean, and Gloucestershire First has been very supportive in helping us.
How have you promoted your business?
We have networked heavily, cold-called and built a website. Our marketing is in its infancy and we have just commissioned a press release that will be distributed to our target sector.
How did you decide how much to charge for your product?
We have looked heavily at the market and our offering provides a higher performance for the same price.
How many staff do you have?
We only have three at the moment and another three waiting to join. We tend to use sub-contract services and contacts when needed.
What has your growth been like?
We are not in a position to offer our product in volume yet, but we hope to be profitable in month nine of the plan. We are ahead of where we thought we would be.
What’s the impact on your home life been like?
The lack of available funding and the pressure to keep going has been very disruptive on home life. The constant stress and will power to ‘maintain the faith’ is very difficult. Everyone wonders why you bother and why you don’t get a ‘normal’ job. It can be very lonely. The team around me is very supportive though and I have a great network of people in similar situations.
What would you say the greatest difficulty has been in starting up?
The greatest difficulty has been finding a way to get to the funding that is available. The current flux generated by the reorganisation of government support hasn’t helped, but it is there if you work hard at it.
What was your first big breakthrough?
There have been a few, but the best would be either attaining a generous Technology Strategy Board grant, securing our first substantial commercial order or getting through to the final of a national competition.
What would you do differently?
I would not have relied on optimistic funders, but chosen to use the funds we had to get on with the doing – and done less of the talking. Given hindsight I would have bootstrapped the business at a much earlier stage.
What advice would you give to budding entrepreneurs?
I’d advise to set a good plan, to be very critical of your plan and to ask for lots of advice. If you can find a mentor who has gone through it then you will learn a lot. Turn over every opportunity out there.
Where do you want to be in five years’ time?
We hope to take the company public in three years and that it will be a significant global materials supply company by this stage.