13 August 2017

Lawrence-in-studio - funding at the right time is essentialWhat’s the one thing you need to get your business off the ground?

When I speak with budding entrepreneurs, often the answer I hear is ‘funding’. Whilst this is true, it would be easier to set up a business in the short term if you had an influx of cash to help you to buy what you need, in the long term, I don’t think it’s always the best course of action.

Every month I receive hundreds of messages from growing businesses and startups, people looking for advice and more often than not, for investment or free services. There seems to be a trend for this now. For looking for funding before giving it a shot on your own. I wonder if programmes like Dragons’ Den fuel this.

I will always help where I can, and I believe that the best way to do that is to provide advice and support – not a handout or freebie.

You could say that that is tough love: Not giving someone what they want because you know it will be better for them in the long run. But, trust me, I speak from experience and I am certain that I would not be where I am today if it weren’t for the tougher times and the lessons that we learned along the way.

Appreciate the landmarks

I also believe that you appreciate the landmarks and smaller things along the way too. The moment we moved into our first office, we had truly earned that move. The office wasn’t a big space and we had a shared receptionist with the other businesses in the building. That was a proud moment for us. It was also hugely motivating. We were – and still are – helping businesses to grow and as a result, growing ourselves.

Some years later, we moved into City Tower. The highest office space in the city with views stretching from the Pennines to Winter Hill and the West Coast. It was a special place to be and, again, I really felt an extra level of pride because we had strived to make it to that point. We had waited and moved when the time was right, when we had earned it.

It’s important to note that am not saying here that taking on funding is the wrong path for everyone. The key is knowing what to take on funding for. It should always be used to accelerate the natural growth process. Is it worth giving away part of your business or owing money so that you can have funky furniture from day one, or is it worth sitting on boring chairs for a while and not being in debt?

There is no replacement for being frugal in the early days of a business.

Understandably it is tempting, with Brexit on the horizon and an uncertain economy for a while. In my opinion, it’s potentially the worst time to take on funding. Instead, look at how you can strengthen from within. How can you strengthen your product, how can you improve your service and make your offering more compelling. 

What’s more important than funding? For me, it’s support. There’s no replacement for the confidence that being surrounded by supportive people brings.

We had a wonderful amount of support in the early days. I remember Gail’s mum, June, asking me what I planned to do when I returned from New York having sold my business to Granada. I was in a period of real flux and it could have gone many ways. The internet was not really taking off over here in the UK yet so to set up a business focussed on this technology was a big step.

I told June that my plan was to set up a hosting business and I will remember her response forever. She simply said: “Wonderful. I am sure you will be fantastic at it.”

Having this backing from our family and friends, I knew we could make it. Even in the 20-hour days, the times when Gail and I wouldn’t see each other as we were both working flat out, I knew it would work. It had to work. 

We built UKFast from the ground up

Looking at where we are as a business now, it would be easy to assume that UKFast has always had incredible workplaces and awesome employee perks. Sadly this is not the case. We’ve always had a great culture, but we have added the environment and perks year on year literally from the ground up.

We built UKFast with no external investment, only recently accepting funding from the bank for our recent acquisitions and growth with Secure I-A, Pentest and a few other things that we have in the pipeline!

There will come a time to sell shares, I am sure, but only to accelerate growth when the right opportunity arises, I am not saying “don’t take on funding,” just be careful and bide your time. If you have a very strong idea, why give away a huge chunk early on. Get the business working and then get  the money you need for a smaller chunk of equity.

Whilst it may seem tough at the time, struggling along and going without will actually stand you in the best stead later in your business journey.

If you ever need advice or support, I’m here to help. Or if you have any questions about your business journey, I am alway happy to answer them. 

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