Q&A: Entrepreneurs share their secrets on running a successful business

Earlier this week, BusinessZone.co.uk editor Dan Martin joined the judges from the South East heat of The Pitch 2009, our £50,000 competition for entrepreneurs, for a live webchat on The Guardian website.

As well as discussing the contest and how contestants can get involved, the panellists shared expert advice on starting, running and growing a successful business. Subjects covered included how to come up with a business idea, whether it's a good idea to run a business whilst also in full-time employment, finding and pitching to investors and how to overcome pitching nerves. Here are highlights of the Q&A.

Q: I have been thinking about starting my own business but I find it hard to come up with an idea and I'm also not sure I have the right skills to do it. How do I know?

A: Simone Brummelhuis, founder and CEO, The NextWomen: First, why do you want to start your own business? Freedom, money, leadership, not happy in your current job, think you do it better? The answers to these questions should bring you further in your search when and what business to start.

Ideas: They are everywhere, invite a group of friends and you will come up with tons of ideas, also websites as trendspotting give you ideas for business, or find a business which flourishes in another country and copy it in this market. It's not the ideas which are the problem, but the execution.

Skills: Think what steps you need to make in order to make a business happen, and whether you can do that. Money, time, knowledge, technology etc., Start something on the side of your current job and see whether you want to do it, whether you can handle the insecurity, no money, get your first client etc. Or take an internship with a startup and see what it means to start something from scratch.

Skills you need: perseverance, positive thinking, endurance, teambuilder, focus, but also you need to be the sheep with five legs!

A: Dan Martin, editor, BusinessZone.co.uk: The key thing is to not throw all your eggs into one basket. Start off small, test the market and see what works.

Q: In terms of The Pitch, what qualities will the judges be looking for? What will set the best candidates apart from the rest?

A: Simone Brummelhuis, founder and CEO, The NextWomen: I am looking for an investor presentation and not for a sales pitch: I'll be expecting a short talk about product, team, competition, competitive advantage, financials and investment need, target market and who is or will be the first customer, and risk involved starting the company.

A: Dan Martin, editor, BusinessZone.co.uk: There are four criteria which the judges are basing their decision on: innovation, understanding of the market, communication/engagement with customers and financial management. Your business may not be up and running yet but if you can demonstrate a clear understanding of how you are dealing/intend to deal with each of the four areas, you'll stand a good chance of winning.

Q: What's the best way to present my pitch?

Start with a story about the problem that you are solving. Use short sentences and a mantra in your presentation that sticks. It helps to compare your company to another well-known business.

Q: I am setting up a social media services business having left a media company. There are a lot of journalists starting up their own businesses as the traditional ones scale back. I would like to get an idea about the market and what it wants.

A: Dan Martin, editor, BusinessZone.co.uk: Good on you for starting your own business! I'm a big fan of social media and I think you've certainly made the right move. There are a lot of big companies out there that want to use social media but don't understand how they can. Key for you is to demonstrate how it can benefit them. You could maybe take on a couple of clients for free or at a discount rate and build a social media campaign for them which you can then use as case studies.

A: Andrew Groves, head of resourcing, Yell: Without wanting to sound cruel, a lot of the journalists being made redundant are quite often the less able ones (there are, of course exceptions) or the ones who were less willing to accept the sizeable shift from print to online that is going on in any media business worth its salt.

Then there are the freelancers whose work streams have dried up so it's a tough market. You need to become a jack of all trades: sales, marketing and your core skills in journalism. If everyone is offering similar services then you need to be the one they choose and your networking skills need to be top notch.

Crucial to your sucess will be 'gathering information'. That's a behaviour we look for Yell. It's all about ensuring you are totally up-to-date and at the cutting edge of your market at all times. If someone can offer a more up to date view of what you are doing then you wont be first choice. Do everything you can to build your reputation on the internet through LinkedIn, Facebook, forums etc. There are so many free marketing tools on the internet, try to be everywhere that your potential clients are hanging out.

Q: Any general advice for small businesses looking for angel investors?

A: Bill Morrow, co-founder, Angels Den: There are three things to consider when pitching for investment. Get the idea across clearly. Often, in say, digital, people get very lost when they hear buzzwords or concepts. Practise that elevator pitch.

Your cash flows must make sense. Identify your revenue streams and make realistic assumptions. No one believes it when they hear that you are going to make millions in year three.

Perhaps most importantly, stress the team (either in place now or in the future). this is what people buy into.

To actually find angel investors, a good starting point, having exhausted all of your contacts, is the British Business Angels Association website which lists all of the angel networks in the UK. The number one question for them all is 'how many deals have you actualy funded in the past year?' and then ask how much they charge upfront. Angels Den has funded more deals than all of the others combined. We have spent over £1.3m accumulating the largst database of angels in Europe but that alone means nothing; it is whether or not they actually invest that is important.

A: Simone Brummelhuis, founder and CEO, The NextWomen: Do you really need them, or do you need a leadership or business mentor and a first customer? Can you really deliver a maximed result in a couple of years so that your angel is happy?

Q: What do you want to achieve with The Pitch as a competition?

A: Dan Martin, editor, BusinessZone.co.uk: A major aim of The Pitch is to demonstrate that despite all the doom and gloom that's around at the moment, small business entrepreneurs are out there using good old-fashioned creativity and innovation to achieve success.

We are keen to ensure that as many people as possible get access to some of the most successful business experts in the country and, perhaps more importantly, in their region. We have tried to make sure that the judges in each heat are local to the region in which it takes part.

Unlike Dragons' Den, we're not about humiliation. Even if you don't win a regional heat or even make it to one, we're giving entrepreneurs access to the expertise they need. Once all the regional heats are over, the videos of all pitches will be published on BusinessZone.co.uk which will serve as a great business resource.

I'm toying with the idea of starting a company at some point and wondered if I might come across a hurdle with my employer. What would Yell's stance be?

A: Andrew Groves, head of resourcing, Yell: At Yell it would be difficult, particularly if you worked in sales as working your patch is already like running your own business. I can't see anyone would have time.

I am sure it happens and if it didn't effect your work it may not become an issue. How many people can leave to start a business rather than growing one whilst working?

Your contract with your employer would protect your employer to a certain extent and you could in some cases find yourslef unemployed so I would be careful especially if your new bsuiness conflicts with your current employer.

What you do in your 'own time' is really up to you. If you can run a business and still be a good performer at work then it should not be a problem.

A: Dan Martin, editor, BusinessZone.co.uk: A friend of mine is currently running a business from home whilst also in full time employment. She has now got to the point where she has to decide whether to make the leap and quit her job. The business is starting to take off but she can't fully concentrate on it because of her full-time position. This article might help.

Q: Do you think it's someting I should keep to myself at work, or would you suggest I mention it to my manager?

A: Andrew Groves, head of resourcing, Yell: I would keep it quiet to start with, it will probably not be viewed favourably and may put tension into your relationship with your line manager. However, if your relationship with your line manager is very good you may want to be open, but be mindful it may portray you as someone who sees their future outside of their current emplyer and hence scupper any promotional chances. If your current job is really just a 'day job' and you aren't looking for promotion or expected to work longer than usual hours then I dont see why you can't be open as long as you deliver day in, day out at work.

As a small business owner looking for investment, I am always really keen to hear about grants and competitions for funding and help but I am a really nervous presenter and I'm worried that when it comes to the crunch I could let myself down. Do the judges bear in mind things like nerves or will they dismiss you out of hand for being a bad pitcher? Is this something I just need to 'get over' or should I seek training?

A: Simone Brummelhuis, founder and CEO, The NextWomen: Prepare, prepare, prepare, in front of the mirror, in front of your mother, father, your friend, your butcher, and ask them for comments. Think like you are always pitching, even when you are just telling someone about your business; word of mouth is very important.

Q: What should I wear when pitching my business?

A: Simone Brummelhuis, founder and CEO, The NextWomen: Something does not distract, and shows that you are a business man/woman, if you look sloppy, than chances are that your business is also sloppy.

A: Dan Martin, editor, BusinessZone.co.uk: I think smart is definitely always the best option. While some investors/judges may prefer a more casual look, a suit generally doesn't offend anyone! I was at an event with Peter Jones from Dragons' Den yesterday and he advised dressing appropriately to the situation so in his view, pitching a business means dressing smartly.

Q: I've just recently started my own web marketing business and currently work a lot from home and from client offices. Do you think there is a credibility gap for homeworkers? I was thinking of getting some office space to have a physical presence. What would your advice be?

A: Dan Martin, editor, BusinessZone.co.uk: There has been a big increase in the number of people starting businesses from home and in theory there's no reason why people should view you differently. If you have a good website, it's pretty easy to paint a picture of a bigger business with its own premises.

You also could opt for using a PO Box address or change the address of your house to something more businesslike - for example, 19 Grosvenor Avenue could be The Bayview, 19 Grosvenor Avenue. If you have to hold meetings with clients or you fancy working somewhere differently one or two days a week, you could also look into the likes of eOffice and Regus which offer good value meeting space and hot desking facilities.

A: Simone Brummelhuis, founder and CEO, The NextWomen: A lot of people work from home, that is no problem, but you can always become member of a business club, like The Hospital Club and One Alfred Place in London, where you can schedule meetings.