Harley Davidson, Mattel, Disney. What do all these brands have in common? It’s not just that they are all iconic names that grew to dominate in their industry. Each of them also started out as a “garage business” as a way of escaping the nine to five.
By this we mean they were started by individuals who took a skill, talent, passion or hobby of their own and put it to work on a small scale. They then developed it into something much bigger. Doing what you love can certainly be a wonderful motivator. However, it takes more than passion alone to achieve success. So, what else needs to be thrown into the mix? This guide aims to help you find out.
Check your audience shares your passion
Harold Matson and Elliot Handler started out selling picture frames from a garage workshop. As an enjoyable sideline and a way of putting their talent to work, they had the idea of crafting dollhouse furniture from frame scraps. Soon, they found that the furniture was more profitable than the picture frames — and the toy specialist, Mattel, was born.
Escaping the nine to five
Whether it’s handmade toys, or amazing graphic design, you might have an inkling that there’s a market for your craft, but you can’t always be sure. Adopting an approach similar to the Mattel founders can be a great way for any entrepreneur looking to explore their passion.
You may dream of escaping the nine to five eventually, but it’s usually safer not to abandon the picture frames completely until you know that customers want to buy your dollhouse furniture.
If your considering growth, investors like evidence
Scaling up gradually in this way can also help if you want to get investors on board or secure a loan/grant. Investors invariably want to see a track record. This is evidence to show that you have been able to attract customer interest, even if it’s still just a part-time, small-scale enterprise.
Using your passion to dominate the marketplace
With passion usually comes curiosity, knowledge, and opinions. If you have an interest in something, you are likely to have your own perspective on it. This can be used to your advantage when it comes to promoting your business.
Become an expert
If you are offering a service to businesses, although you might not have the resources of larger competitors, you can compensate for this by establishing yourself as a specialist. Use your personal interest in your chosen area to establish your credentials as an expert in it. For instance, you can do this by posting articles via LinkedIn, or contribute to debates on Twitter. These are great areas in which you can build a personal authority on your chosen subject. This can go a long way in helping you gain the trust of potential clients.
Combining personal authority and passion
Personal authority and passion can be used in a similar way if you are selling to consumers. Climbing and outdoor specialist Patagonia is a great example of this. The business was set up by a climbing enthusiast who started producing his own equipment. That was over half a century ago, Patagonia is now a leading name in its field. However, it’s clear that this is still very much a company that was formed by enthusiasts, for enthusiasts.
Tell your story
Through telling — and selling — your story on your website, and by expressing your expertise in the way you describe your goods or services, you can demonstrate your personal investment in the company. This will go a long way in showing customers that you are a name to be trusted in your field.
Starting your business
When you’re setting up your new business as a way of escaping the nine to five choosing the structure for your company set up can be hard to fathom.
Two of the most popular structures are forming a limited company, or sole trading, also known as self-employment.
Here we look at the differences between both types of business and compare running a limited company vs being a sole trader:
|Sole trader||Limited company|
|Is your personal financial liability protected?||X||✓|
|Would your business name be protected?||X||✓|
|Is it quick and easy?||✓||✓|
|Would it be free?||✓||X|
|Do you need to complete a Self Assessment tax return?||✓||✓|
|Do you need to complete Companies House returns?||X||✓|
|Can you sell your business on?||X||✓|
|Is it tax efficient?||X||✓|
|Do you need to keep company accounts?||X||✓|
With our company formation packages your company incorporation can take as little as three hours to complete and our online form can take 20 minutes to fill in. It’s an online process but you’re not alone while you’re doing it. Our support team can be on hand to help during office hours, 9am-5:30pm Monday to Friday, either by phone or email to make your company formation as straightforward for you as possible.
Take the first step today.