A new wave of scams has erupted across the world over the last few months, capitalising on the one thing that is affecting everyone, coronavirus, and it’s only getting worse. Here are a few to be aware of.
- 4 Aug 2020
Any business owner - part-time or full-time - will tell you that starting a business is tough. Growing it is even harder. To lend a helping hand, we asked successful and established Starling Bank business customers to pass on their tips for growing a business.
Whether you’re a side-hustler or a serial entrepreneur, you’ll need to have confidence in your idea and be motivated to put in the hours to make it work. “When I had a clear purpose of helping other freelancers make their businesses sustainable and lucrative, I saw the first big jump in subscribers,” says Anna Codrea-Rado, a freelance writer who runs the newsletter The Professional Freelancer and co-hosts the podcast Is This Working? “If I am a business, my mission statement is: making work better. Everything I do fits into that.”
Funding can seem like an impossible hurdle. But there are lots of options out there. If you’re a Starling business customer with a limited company or a limited liability partnership, you can apply for an overdraft up to £150,000 if you’re a sole trader, it’s up to £10,000. Limited companies that need a chunk of money for a specific purpose can also apply for a Starling business loan. There’s also an option of flexible credit, available through GrowthStreet, one of many partners in the Starling Marketplace, a space that provides third-party products and services for your business.
Another funding route is to approach potential investors. Jaron Soh and Saher Shodhan have raised £120k from investors, who took a 10% stake in their business. To achieve this, they needed to develop their business pitch. “A compelling pitch always starts with a compelling problem,” says Jaron. “What are you trying to solve and why is it relevant now?”
The problem they aim to solve is that freelance digital marketers struggle to prove their experience and expertise and find work they love. Some freelance websites can be tampered with by fake reviews, making five star ratings meaningless. Jaron and Saher’s business Traktion aims to solve this with a robust verification process, providing a reliable ranking based on the success of the content freelancers have previously worked on.
Some startups need capital to develop advanced technology, hire experts and market themselves on a large scale. Others can be built from the ground up from nothing but personal savings, known as bootstrapping. “For bootstrapped self-starter businesses, cash flow is always a challenge,” says Jamelia Donaldson, founder of the subscription box TreasureTress, providing products for black women and girls with naturally curly hair.
One way of tackling cash flow and generating regular monthly income is to choose a subscription-based model. “Getting people to commit financially before they receive the product is great. Subscriptions kind of automate your revenue.”
Anna also chose a subscription model to monetise her newsletter. “As a freelance writer, you can reach a ceiling. There are only so many hours in a day for writing. Unlike when I write one article that I sell once, the newsletter is scalable. I write it once but I can continue to grow my subscriber base.”
Once you’ve launched, it can be difficult to change your prices, especially if you run a subscription business that requires a high level of trust. Do some research into what your competitors charge and start conversations with potential customers or people who have experience in your industry.
Jamelia priced each TreasureTress box at £20, sent monthly or bi-monthly and containing four to six products, each worth between £5 and £15. “I gauged pricing on the market average for subscription boxes, generally between £10 and £25 per month,” she says. It’s also important to consider and incorporate potential costs you’ll face if and when your business grows, such as VAT or hiring warehouse space.
Anna struggled to decide on a price point for The Professional Freelancer because she didn’t know anyone else running paid-for newsletter options. She asked for help from the team at Substack, the platform she uses to distribute the newsletter. “We took into account the price points of other newsletters and that it was a professional, tax-deductible service. I also projected costs on how many existing subscribers would need to become paying members to cover my costs of writing the content.”
For Anna’s extra content, subscribers pay £9 per month or £90 per year. She now has 6,500 subscribers and makes 90% of her income from her newsletter or commissions, some of which are generated through The Professional Freelancer.
Social media is key for businesses that want to raise brand awareness, reach customers and secure sales. The secret is about knowing where your customers spend their time, whether that’s Instagram, Facebook or another platform. The advantage of digital ads is that you can measure and track.
For Jamelia, Instagram has been an invaluable digital tool for growth. “I announced our launch on Instagram and the first sale came through there,” she explains. Since she set up the TreasureTress Instagram account in November 2015, she’s amassed almost 36k followers.
“At the start, we grew organically, which allowed me to learn more about what customers and brand partners want. Now, I’m a lot more scientific and if we’re going to pay for something, I want to know what the return and the reach will be.”
Anna also uses social media to understand her audience and start conversations that can guide her content. “I mainly tweet about freelance jobs or issues and I’ve seen substantial growth in the last few years.” Anna advises: “Be really clear on what your message is and who you’re speaking to.”
Both Anna and Jamelia have benefitted from the magic of word of mouth recommendations. “For sales, word of mouth is the biggest driver of growth but it’s also the hardest to measure,” says Jamelia. “It was easy at the beginning when there were a few hundred subscribers, but now we’re in the thousands.”
To learn about customers, the TreasureTress team uses social media, Google Analytics and surveys. They also meet customers face to face at events, which cover everything from haircare to starting a business to breast cancer awareness. “We’re constantly learning how multi-faceted our customers are,” she says. The success of TreasureTress is founded on it becoming a community for black women.
Many businesses are a mix of full-time founders, employees and freelancers. “We use freelancers when we have time-based project needs and have a clear understanding of what we need help for,” says Jaron. “For full-time employees, it makes sense to hire when you require someone in-house to own certain problem areas, and when the job-scope isn’t fully defined yet and might need to change.”
TreasureTress is formed of a London warehouse and office, run by seven full-time female employees. Jamelia’s advice on hiring is to ask for personal recommendations, which can speed up a potentially lengthy process, and employ people who come armed with ideas on how to make your business even better.
Whether you’re just starting your business or looking to grow, Starling’s business account has been designed to support you. There are no monthly fees and the app has all sorts of tools to save you time, paper and money.
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