Good people and belief in your product go a long way in business

In the final part of a series on starting your own business,  John Downes talks to two people involved in recent start-ups about some of the challenges this presented

In recent Business 2000 articles, we've heard what the experts think are some of the key considerations for anybody thinking of starting their own business.

The cost of renting a premises, designing a good business plan, and conducting adequate market research are just some of the issues raised.

We've also talked about tax and pension provision, which, while not always the first thing that comes to the mind of someone starting out, are nevertheless worth bearing in mind.

But what is it like to actually start your own business?

Are there any potential pitfalls which you should look out for and, if so, what should you do to avoid them?

Ms Katherine Carroll is a director of Wexford-based company Stable Diet Ltd, which produces granola-based products such as toasted cereal, bars, cakes and preserves.

Ms Carroll - who first started producing products for her local health shop from her own home - has been in business for approximately five years.

According to Ms Carroll, one of the major pitfalls which she experienced when starting out was getting the pricing of her products right.

"I operated entirely on my own for the first years, so I was focusing on making the product right," she explains.

"But it's important to have the confidence to charge enough for your product."

Having enrolled on a business course, she found it was a good way to mix with other people in a similar position to herself, she says.

It struck her that, no matter what it was you were looking to sell, you had to have a well-worked out business plan.

This makes you sit down and focus on where you want your business to go, she says.

"One thing you have to do is believe in your product," she also believes.

"When you are cash-strapped and your sales are slow, it is important you have this to keep the positivity flowing."

If this belief in your product is important, then making sure you employ like-minded people, who take pride in the quality of their work is also essential, according to Ms Carroll.

To this end, she received help from Enterprise Ireland to train her staff in the preparation of food.

When she and her partner made the decision to enlarge her company - Stable Diet currently employs some 20 people - she immediately approached her local environmental health officer about how best to proceedwith the expansion.

"The amount of help out there is huge," she says. "All you have to do is pick up the phone and ask for it."

But perhaps the biggest step on the learning curve for her, she says, was grasping the extent to which she needed to grow her business in order to recoup the cost of setting it up.

Buying suitable equipment, adhering to safety standards, and establishing a payroll system all require a financial outlay which needs to be met by an adequate turnover, she points out.

Mr Mike McDonagh of McDonagh Redsail, which buys, sells and processes fish, says a key consideration when he started his Galway business two years ago was to find a factory that was located near to the docks.

He also had to invest in modern facilities and equipment.

One problem he has experienced is the unreliability of customers, he says.

While the fishing industry is a broad one - he has customers as far away as China - the capacity of a customer to pay you on time can severely impact on your business's cash-flow.

"You have to be very careful with who it is you're advancing credit to," he says.

"You can't be over dependent on any of them."

He also had to address the issue of supply, he says.

The nature of the fish business, he explains, is that it tends to vary from oversupply to undersupply. This means it can be hard to find the right balance and keep suppliers happy.

"Fishermen are our lifeblood, if they are not happy with the prices they are getting, they will go elsewhere," he says. "If there is oversupply, it is bad for everyone.

"The whole trick is you need good people. Anybody can buy machinery.

"When I left school there was no money, but loads of people. Now there is loads of money for equipment etc, but not labour," he says.

And his advice to anybody thinking of starting their own business?

"Don't be thinking about it, just do it" - but not without a lot of planning and preparation of course.