COO at Bishop Collins Chartered Accountants
How To Make A Business
So, you have come up with a great idea for a new product or service.
What are you going to do about it?
Chances are NOTHING like the other 96% of the population who would rather default back to the comfortable couch potato position.
What if you were to act on it and perhaps you became the next Bill Gates, Colonel Sanders or Richard Branson. You wont know until you give it a go.
Now that I have you motivated, let’s do some pre-start up, self-evaluation to avoid failure.
Here are four questions you need to answer by Larry Myler contributor to Forbes Magazine:
- Are you an entrepreneur? Not everyone is cut out to be an entrepreneur, and many would not even enjoy the experience. That’s not a negative judgement; it’s just a fact.
- Are you personally resilient? A quick check of your thesaurus will yield synonyms for resilience, such as pliability, flexibility, buoyancy, hardiness, toughness and spirit. These words are gross understatements of what is needed to push through to success. There will be times when you will be stretched and bent beyond anything you thought you could endure, and then you will need to bounce back quickly, and repeat the process. Is it worth it? Mostly, yes. But before starting your new company, you should know what is coming and be as prepared as possible. Still, nobody is ever fully ready for the realities of a start-up.
- Are you financially prepared? Where will you get the money to start a business? Many entrepreneurs begin with personal savings, credit cards or a home equity loan. After proving their business model, they may move on to other sources of funding such as family and friends, or angel and venture capital partners. It’s a good idea to save as much money as possible before starting, and get your company well down the road of viability before seeking outside funding. The more valuable your company becomes, the less you will have to give up in equity if you choose to go that route. Countless founders give up too much of their ownership because they ran out of money early.
- Do you have real expertise, credibility and thought leadership? If you have been working in the same industry in which you will be starting a business, you probably have enough knowledge and expertise to come across as credible and effective. But many people opportunistically start companies in markets outside of their comfort zone, and therefore must enter a crash course of study to get up to speed. Every industry has specific jargon, issues, thought leaders, restrictions and opportunities. Your prospective customers will immediately know whether you have a deep or shallow understanding of their challenges. You can shorten the learning curve by reading books, blogs and trade journals. You can also spend time with experts, watching them in action and asking them questions. Most experts enjoy sharing their knowledge. Allow enough time to acquire genuine prowess.
Now that you have passed the first stage, you need to develop a plan.
To help with that you need to:
- Define the problem you are trying to solve or the opportunity you are trying to capitalise on
- Explain how your product or service will solve that problem or service the opportunity
- What is the market size you are targeting?
- Is there competition in that market?
- How is your solution unique – what is your differentiation? This is described as USP = Unique Selling Proposition
- Do some market testing of the idea don’t just ask if people like the idea but will they be prepared to pay for it
- Do you have a team to support you? Typically, you need 3 skill sets:
- The creator – product or service designer, developer
- The hustler – to do the marketing, communication and selling
- The manager – to control operations, funds and governance
If you have come this far then you are ready to start your business.
There are many resources available from government and other sources that will guide you along the path.
Below are some links relating to starting up your own business for you to follow up. As a quick summary you need to:
- Come up with a business name and get it registered
- Design a logo
- Decide the structure for your business; company, partnership sole trader
- Apply for GST and Tax file number
- Open a bank account
- Register a domain name for your website. I suggest you register multiple option: .com, .com.au, .net, net.au
- Premises: where will you operate from; home, share offices, co-working spaces, serviced offices etc
- Do you need to register a trade mark or are you unique enough to apply for a patent?
- Do you need manufacturing partners? Need to create non-disclosure agreements, licensing agreements
- Develop employment contracts for when you start hiring people
- Chose an accounting system for record keeping and invoicing
If I haven’t talked you out of going ahead with your idea then I suggest the first thing you do is talk to your accountant who should be able to assist and guide you along the journey.