Five steps to a smooth(ie) sailing business » SMEInsider

Five steps to a smooth(ie) sailing business

Richard Reed and two co-founders launched Innocent Drinks after customers at a festival stall voted for them to quit their day jobs and make smoothies full time. But how did he get from there to £multi-million success?

In just 10 years, Reed went from the first spark of a concept to selling the company to Coca-Cola. In his own words, here are the five essential steps to making it big time.

Step 1: What’s the big idea?

“I find a lot of people pitch and say they’re going to do something, when they don’t actually have the thing in front of them. Firstly, work out what your idea is – if you’re gonna launch a new make-up brand, start working on your make-up. If it’s all about jumpers – start making jumpers. But having a product idea doesn’t mean you have a business idea. You need to work out how to turn the product into a business – how’s it going to be made, how’s it going to be sold, what’s it gonna cost, where’s it gonna be sold. Giving up a job is the easy bit. The hard bit is the grind of finding an idea, finding a group of people to do it with, testing it, writing the plan.”

Step 2: Work, work, work

“People ask, ‘How can I set up my business when I have a full time job?’ That’s the challenge. It’s evenings, it’s weekends, it’s turning your computer monitor slightly to the left so your boss doesn’t see your actually working on your business. You’re an entrepreneur – you’ve got to bend the rules a little. You’ve got to be cheeky, you’ve got to be resilient, you’ve got to watch a lot less television and do a lot less social media. If you don’t have the drive to do that whilst holding down your job, you probably haven’t got the drive it’s going to require to launch and build and run that business.”

Step 3: Spread the word

“I’ve met a lot of would be entrepreneurs who say, ‘I’ve got a great idea for a business, but I can’t tell you, in case you steal it’. Just… no. You need to be putting the idea out to as many people as possible – the guy in the Starbucks queue, the person next to you at the cinema – as then you can get the feedback on it. What’s the downside – someone’s going to steal your idea, rip it off and do it instead of you? They’re not, and you’re probably exaggerating the significance of the idea. There’s much more to be gained in getting your idea out there than there is by hiding it.”

Step 4: Quit the day job

“The right time to quit is when you’re ready, and only you are gonna know that. But the longer you leave it, the harder it’ll get. The best time to set up a business is soon as you can possibly do it. I’m not saying be reckless, there’s a lot to be said about doing the development and making sure you’ve got something good, but the most important thing after it all, is the start. And start small, start tiny. Do it from a market stall, that’s where we got started. It doesn’t have to be big, go door to door in your neighbourhood selling it. Everything big started small once.”

Step 5: Sell when you’re ready

“In terms of exiting, the classic rule is that you’ll get a better price if you sell when you don’t want to or don’t need to sell. Sell when you’re on a big upward growth curve, when it’s looking really exciting and that the business is going to keep on growing forever. But that’s only if you’re trying to maximise price. The best time to sell is when you want to sell. The money is no substitute for doing something that you love, believe in and get excited by.”

And finally…

In this video, filmed at last year’s Innocent Inspires event, Reed his fellow entrepreneurs give more priceless nuggets of advice on becoming your own boss: