How important is business experience?

There are no rules about how much experience you should have when you start a business.  But you might like to find out more about how different types of experience can help and whether you have them. The likelihood is you actually have a lot more relevant experience than you thought.

This guide shows you how - and suggests some ways to up your experience, should you feel lacking.

Industry-relevant experience

  • Experience working in a similar field or the same industry will of course mean that you have a greater understanding of that market and the way in which businesses in that field work.
  • This will help you identify customers, marketing strategies and opportunities for growth.
  • It usually also means you have access to a ready list of contacts, which can be really useful when you're trying to find suppliers, advice or other people to work with.
  • Experience can also give you more confidence in a certain area than if you've never done anything like it before - you have a better idea of what to expect and can foresee problems more clearly.
  • If you are planning to enter an industry with no prior experience of it, have a think about whether you'd benefit from trying to find a job in it for a year or so first to build your experience. You might even want to consider a bit of work experience or an apprenticeship. Alternatively, talk to as many people as you can in that industry, read trade mags and books and anything else you can get your hands on to give you a deeper understanding of the sector.

Experience in business

  • Just because you haven't run a business before, doesn't mean you don't have experience in business.
  • You learn things from any job you've ever had - the most efficient ways of doing things, how to speak to people, problems to avoid. And often you learn from former employer's mistakes as much as from their successes.
  • Try writing out the key skills you picked up from each job, what you thought worked about the way the business was run and what really frustrated you.
  • Take careful note of what frustrated customers, suppliers and other staff at previous jobs.
  • This gives you the basis for figuring out the best way to run your own business.
  • You may have also bought and sold stuff before on a more casual or personal basis - whether that's cigarettes in the playground, clothes over eBay or a house you've sold for a profit. It's all relevant - you know how to make profit, handle stock, handle buyers and close a sale.

Experience of one skill

  • Any job gives you a skill - whether you've worked in sales, marketing, administration, reception or McDonald's. Because wherever it was, you had to be facing people, handing stock, or just putting in hard work.
  • That means you have one skill area sorted - you just need to think about boosting the others. Which is where short course comes in handy.
  • Qualifications in academic subjects give you skills too - if you did well in an arts subject, you're a good communicator. A science, and you're good with numbers and problem-solving. And so on.
  • Apprenticeships and vocational courses are a huge help - you've got on the job experience and know how to apply skills, as well as having had the opportunity of learning how things are done from the pros.

Business qualifications

  • There is a huge range of certified business courses and qualifications you can do to ensure you get your knowledge to a certain standard before embarking on starting up.
  • These are by no means necessary to run a business, but they can help you improve areas you feel weak in, or give yourself a better grounding in overall business and management theory.
  • Courses of study looking at overall business and management theory are particularly useful if you want to build a fairly large business and don't feel that you really know how. They can also help you structure a business and make sure you account for all the groundwork necessary.
  • You can choose a short, relatively cheap course such as an introduction to business, or do a longer, more intensive one, lasting anything from months to years - just look very closely at the course content before committing to check it's not too basic or advanced for you requirements.
  • If you've already completed a business studies or management degree or post grad, or equivalent, you'll have a lot of the grounding knowledge for the technicalities of business - but there's no substitute for actually applying theory to practise.
  • You can also take a short course just to improve one particular skill - such as accounting or marketing.
  • These courses are usually better for fitting in around working hours, as they'll often be in the evening or just for a couple of days.
  • Look at the experience of the course tutor when choosing.
  • And, of course, compare prices from different colleges and look at what topics they cover and how in-depth they go. Speak to the course administrator to find out if it'll match your level.
  • The MBA is the most well-known business qualification, and one of the most advanced.
    • You by no means need an MBA to run a business. The vast majority of business owners don't have one.
    • It's expensive and takes usually a couple of years.
    • But if you're aiming to become a fully-fledged entrepreneur, setting up, quickly growing and selling companies for big returns, you would likely benefit from the advanced knowledge it offers.
    • Find out more in our guide on the MBA.
    • You can also look into MSc in Entrepreneurship or Business Studies as an alternative.
  • Find out more in our guide on business qualifications.

Life experience

  • Think about other businesses you go to and what works for you as a consumer - how much of a difference customer service makes, delivery time, the way premises is presented and how the website looks. Writing down what you like and dislike immediately provides you with a set of ground rules for how you're going to run your business.
  • Dealing with serious problems and stress in your personal life also gives you some of the resilience and emotional experience needed to cope with running a business.
  • The more life experience you have, the more confident and determined you're likely to be - a huge asset when running a business.

No experience

  • Having said all that, experience is no substitute for determination and passion, and often these traits can help you go a lot further.
  • Even if you're completely new to a market or type of business, if you're really willing to apply yourself you can learn about it and you will go the extra mile needed to make up for lost time.
  • You may also have a fresh way of looking at things that can help.
  • If the whole idea of starting up is very daunting and you just don't know where to start, it might be worth getting a job in a relevant field to explore things more thoroughly, build some contacts and get a clearer idea of how your business will work. Or do a business course to get a clearer idea of what starting up entails.
  • If you have already have a clear idea of how to start and have a natural understanding of how business works, you may well be ready, and some reading up and speaking to people will help fill the gaps. Use your own confidence as a gauge and look at the rest of the guides in this section to assess yourself against the wide range of skills you need to run a business.
  • Also, bear in mind starting up doesn't mean jacking in your job tomorrow and gambling your life savings on a business idea.  In fact, quite the opposite - new businesses are best started in your spare time whilst you keep any existing job (read more on our guide on deciding when to leave your job).  This means that if you're not sure whether or not you have enough experience yet, you can just set up a website or a smaller scale of your business, and feel things out before committing the full monty.

Checklist

  • Read relevant books
  • Read trade magazines to get a better taste for and understanding of your industry
  • Talk to business owners running similar businesses to you
  • Attend local small business owner support groups to get a deeper understanding of the skills you'll need
  • Take a short course to supplement a skill you feel weaker in
  • Consider an MBA or similar qualification if you want to become a multi-company fast-growth entrepreneur
  • Consider working in the industry you want to get into for a while before committing to starting a business if you're not fully confident yet
  • Find a business that will capitalise on your current experience

Resources

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