The Real Reason My First Business Failed - And How To Set Up Your Business in 2017

Are you dreading your return to work after the festive break? Do you long to set up your own business and to escape from the 9-5 drudgery?

​Newsflash. If you want to run a business, there's a 50-50 chance you'll fail in the first five years. I'm living proof of that stat - my first venture closed after just three years, but my second business is going from strength to strength.

So, what went so wrong first time round? And so right this time? I'd argue luck played a small part - but so did the mistakes I made with that first business.

Those mistakes helped me to cultivate my second incarnation as "the freelance writer who gets tech". Here's a (very honest) discussion on the five lessons I learnt with that first business.

​I hope they help you get things right (first time) for your business in 2017:

1. Do Something Different

A few years ago, I started a jewellery company after attending a local silversmithing course. It had moderate success. I received orders, built up a client base and things ticked along nicely.

It did not, however, give me the financial clout to quit my day job. Why? The competition has too high and my ideas, quite frankly, were not original enough. The market is saturated with moderately talented jewellery makers. I needed to stand out. And I didn't.

This is where my writing business got things write.

See what I did there?

I found a niche in the market - I don't just write about science and technology, I've worked in these sectors as a research scientist and software developer. I've lived, breathed and worked on the topics I write about. I'd also worked as a journalist for a number of years.

My scatter-gun CV of jobs in the media, scientific and technical sectors gave me an unusual combination of skills. I can do and write about science and technology.

I am very, very different from other freelance writers. And this difference meant I finally stood out from the crowd.

2. Do The Math

I love maths but completely failed to do some basic calculations with that original jewellery business. Once I factored in the cost of materials, other overheads and how long it took me to make an item of jewellery - I was probably only making a few pounds an hour. And, given the infrequency of my orders, I could not rely on that tiny income.

You will need a basic income to survive. Once you know that figure, extrapolate to include your expenses and anything else that could impact your financial health. Or you could just make it up - which is the (surprisingly) excellent advice given in this blog post.

Setting up a business is a mystery in itself - the variables between your business and a competitor's offering will vary wildly. Just don't throw money at any problems - work out what works for you. Here's a great post covering the basics of setting up a business model.

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3. Market Your Arse Off

You can have the best business in the world, but if no one knows about it, who's going to invest in it?

You must put time aside to research your target audience and market your business appropriately. This seemed like a dark art when I ran the jewellery business. I wasted a lot of money on magazine advertising and chasing Facebook followers when I should have been approaching local shops and building clients organically.

You need to understand your target audience and how to reach out to those individuals. Here's an excellent article crammed with marketing resources and ideas that could work for you.

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4. Prepare For Failure

If your business doesn't succeed, what are you going to do? Make sure you have a Plan B.

For the jewellery business, I didn't quit my day job - I kept it as my safety net because I could commit to both my "proper" job and fledgling business. I did not overly invest in expensive materials and equipment that would now be gathering dust. I kept detailed accounts to continually check the business's financial health.

If I hadn't been so careful, I could have ended up in an awful lot of debt. Yes, you need to invest in your new business - but throwing good money after bad will never save the day. 

Be cautious and make sure you can cover yourself should the proverbial s**t ever hit the fan.

5. Prepare For Success

Here's one thing I failed to do with my writing business: I did not prepare for its success.

I assumed that it would take years to cultivate a client base. I assumed that I would be twiddling my thumbs and chasing work. Thankfully, I was completely wrong.

There is a flip side to this success. How are you going to cope if orders come flying in? How can you meet this demand? As a writer, it's involved a few all-nighters when I've inadvertently taken too much on.

It's a learning curve but it's the most important lesson of all - you must prepare for success. You must be prepared to turn down work to maintain the quality of your work or expand to meet demand.

I hope you've found this post useful, but it's just a tiny snapshot of my experiences. I'd love to hear your experiences and advice to fellow aspiring freelancers and business owners.

Please share your tips in the comments below!