To succeed in business, be brave – and a little bit lucky

By Richard Branson

Published: May 31 2011 16:53 | Last updated: May 31 2011 16:53

Enterprising private companies are an essential part of any thriving modern economy. Today, with confidence still fragile, government spending under pressure and multinationals tightening belts, the role of the entrepreneur is crucial to securing and promoting recovery.

To many aspiring business founders, the economic conditions look daunting, but for an entrepreneur, testing times offer opportunities and the chance to establish a new business or break into a new market.

An entrepreneur’s mission should be to find a business or service that will improve people’s lives by making them richer, more fulfilling or sometimes just more fun. In tougher times, when the markets are muted and confidence is low, a bright and challenging newcomer can find it easier to get noticed. The difficulties of securing finance can be outweighed by the ability to attract good people at reasonable cost and find property.

Frustratingly, for those looking for a formula for securing entrepreneurial growth, there isn’t one. Governments must aim to make it simpler for people to do business, banks should free up capital for companies, and regulators must try to reduce red tape to encourage competition and new business.

However, there is no substitute in business for actually running a company, and that is a risky game where one needs to be brave, focused and sometimes lucky.

Throughout my career I have made decisions using my instinct, but I have also worked very hard at making those decisions work. Facing the challenges of starting up is intimidating, but I often try to help people with that first leap by reminding them of some core values and decisions I have learnt over the years.

First, surround yourself with trusted and talented people. Setting up businesses takes an enormous amount of time and energy. It is easier to make the big commitments when you are surrounded by people you trust.

Second, ensure you define a clear place in the market and a product or service that is different enough to attract customers. Too many start-ups fail by not having a clear offer and message. New businesses need to be innovative, offer value for money, provide quality and fun, and focus on the customer.

Third, stick at it but do not be afraid to admit early mistakes. Many businesses fail in the first few years because they do not honestly assess whether they have got the offer or product wrong. Some soul searching, reflection early on and tweaks to the offer can help make sure your business rides out the tough early years.

Everyone faces crunch times and has to overcome early adversity – the key is to accept you will make many mistakes along the way. It is how you react to them and solve them that matters most.

If you are lucky, you can time your start-up during a downturn. Almost everything costs less than it does during the good times, there are many highly skilled staff on the market, and the competition – existing big businesses – have their eyes on their own operations and issues.

Such a climate is the perfect time for young, enthusiastic and nimble companies to set up and thrive. This is one of those times.

Some commentators blame economic conditions and lack of finance as the key reasons for the failure of more small businesses to do well. Banks do need to keep credit flowing to emerging companies, and governments should cut red tape, but entrepreneurs also need to take responsibility and keep driving their businesses on.

Private ownership can also offer entrepreneurs the freedom to take innovative decisions, without the restrictions of the public market. In a private company, partners can be brought in to help fund growth or acquisitions, but the entrepreneur can keep control of the company’s destiny and direction.

Operating as a private company can give you the freedom to invest in sectors where you have no background or experience. Though this may seem counterintuitive, it is an approach that can shake up a market and bring about real change.

Look for markets where the leaders have become complacent, the customer is poorly served and there remains room to carve out a profitable niche. You will need a skilled team to assess the market and develop a plan that takes the customer experience as the starting point.

So take that first step – ignore the gloom and doom of the media, start up your business and shape the future.

The writer is founder of the Virgin group of companies