The credibility conundrum

Starting out in business is difficult enough, but one of the biggest challenges is being seen as credible. So just how do you go about making your business a serious prospect?

When considering credibility in business, it"s hard not to return to the tale of Gerald Ratner who, in a speech at the Institute of Directors in 1991, famously pointed out that much of the jewellery sold by his eponymous chain was "total crap", and that some of its earrings were cheaper than a prawn sandwich. Ratner may have been joking, but in doing so he killed his credibility in one stroke. His high-street chain bit the dust soon after.

Credibility is a magic ingredient, its components hard to pin down, but it has a lot to do with ensuring there"s a clear correlation between what you say and what you do. Gain credibility and potential employees, customers and investors will all be drawn to your offering. Without it, your name won"t be worth much more than the proverbial prawn sandwich.

But if having credibility and losing it is one thing, then attaining that elusive quality in the first place presents another challenge entirely.

This can be a major problem, especially for an entrepreneur setting out on a new venture. Yes, there are basic steps to take - a clean website, social media presence and registering as a limited company will all add a veneer of professionalism. But what if you"d taken a huge leap, such as leaving a distinguished career as an equities analyst in order to start a fashion brand? You"d quickly get a harsh lesson in how credibility really works.

"When I was an analyst in the City, covering companies like BP, I had access to all the top management," says Heidy Rehman, who recently left a respected job at Citi to found Rose & Willard, a clothing brand for women. "But when I moved into fashion, everyone just wanted to know my fashion credentials. They weren"t up to much, and so I was right at the bottom of the pile. I didn"t know anybody. They just wouldn"t take my calls."

Fast-forward a year and Rehman"s clothes have been worn by Kate Middleton, Esther McVey and Sue Perkins, and the brand has been featured everywhere from The Times and BBC Breakfast to Vogue and Grazia. So how did she do it? By ignoring those blocking her and heading straight for the people who really mattered: the customers. "I decided to focus on the customer and not the industry, dealing with them directly through social media campaigns."

Social media can have a huge impact on credibility, offering an easy route to get the message out to the wider world. But it has to be handled carefully. Users will quickly see through missives from a flimsy chancer with no real substance. By contrast, Rehman"s cause was helped by having a quality product.

"You have to ask whether it"s a good idea that addresses a genuine need people have, and whether it"s easy for people to wrap their head around," says Graeme Smith, CEO at Jersey Business. "If so, your credibility immediately goes up."

Smith offers one simple suggestion for rooting your reputation in something solid. "Before you even think of the bigger market, identify the to-die-for clients in the local area and deliver to them."

He cites Total Solutions Group, a Jersey tech company offering information management software for large organisations. The company identified an issue facing Jersey health surgeries, developed a solution and, having used the island as a test-bed, is now exporting its technology to the NHS. "It"s a lot easier to sell to the NHS having shown you"ve done it across a number of surgeries in Jersey," says Smith.

Indeed, a visit to Total Solutions" website now shows testimonials from Royal Bank of Canada and Lloyds TSB, as well as citing other credible companies as customers, from Jersey Telecom to Dyson. And this credibility by association extends beyond clients to include professional bodies and well-regarded patrons.

Finding a mentor

Professional accreditation is likely to be non-negotiable in a professional field such as those that dominate the Channel Islands, so it"s useful to get a well-respected mentor on side to bolster your business"s credibility.

The good news is that securing their help needn"t be as daunting as it may seem. "I found that I had people believing in me way before I believed in myself," says Rob Grundel, Founder of Somekind, a London-based consultancy that helps companies develop their brand. "People saw my passion for the work, and my desire to connect with people and do a really good job. When I started out I let some offers of help lie stagnant for a year because I believed I wasn"t ready yet. I should have let them be the judge of that."

Jersey Business offers a service to match up potential mentors with new businesses. "A lot of successful business people do want to give back and can get excited by the prospect," says Smith. "That door is often open."

Indeed, getting to know people is perhaps the most fundamental factor in gaining credibility. New businesses are far more likely to build their initial client base through shared coffees and personal connections than web traffic or LinkedIn profiles. And so we come to networking, a process Grundel prefers to call "speaking to people really honestly about what you"re trying to achieve".

Grundel thinks this is the most important thing an entrepreneur can do to build credibility. "This way you"re connecting as a human being, saying: "I"m trying to do this in the world". You happen to be doing it through your company, but the company is almost by-the-by - because people are buying into you."

Handling your contacts

Nowhere is this more important than when an individual leaves a large organisation to set up their own business in the same field. Someone who"s worked at one of the leading players in law or funds, for example, may have the expertise and the track record, but being a small wheel in a big machine is a whole different kettle of fish to running your own firm, managing staff and balancing the books.

Yet while it"s a bold step, there"s no reason why it shouldn"t work - if handled in the right way. The good news is that can be easier in a small area like the Channel Islands, as it"s physically easier to get in touch with others to let them know what you"re doing.

"Going solo is something you can get wrong," says Tony Brassell, General Manager of Startup Guernsey. "Headhunting the clients from your old company doesn"t go down well, for example, and isn"t recommended. But many people end up working for their old business as a private company. If you work with them and maintain good relations, they"ll recommend you or pass work your way, especially if you have a skill that they haven"t replaced."

Rehman and Grundel show that it"s perfectly possible to go it alone and build credibility from scratch. Yet there"s no getting away from the fact that it"s a long game. It took more than 5,000 prototypes and about 15 years of debt and lawsuits before Sir James Dyson - these days perhaps the most respected inventor in the UK - released his bagless vacuum cleaner to the market. It may seem remarkable that he managed to endure such a vast period of professional disappointment without damaging his credibility.

Yet Dyson"s simple explanation throws Ratner"s gaffe into stark relief: "People buy products if they"re better."