starting a business
- starting a business
- idea & value proposition
- product development
- business model
- product distribution
- go-to-market strategy
- business financing
- organisation structure
- business structure
- exit strategy
starting a business
- An entrepreneur will experience a variety of emotions on their journey – excitement, anxiety, joy, and frustration. This is all because the element of uncertainty always exists.
- The time between day 1 and break-even point should not be underestimated. In some cases, this can be several years.
idea & value proposition
- All businesses need to start with an idea.
- Business ideas should work towards solving an unmet need or want.
- Along with an idea, should exist a value proposition i.e. a feature(s) that attracts customers to the business offering, over others.
- Businesses sometimes fail because not enough research has been conducted beforehand.
- Research can be split up into different parts:
- Competitors – the other businesses who already exist
- Target market – the people whom the business is selling its offering to
- Regulation – the legal hurdles to cross in order to operate
- Assistance – possible government grants made available to certain industries
- For many businesses, it takes a number of constituents to build a product or service before an official launch.
- To organise this, it is often necessary to consider:
- Tangible resources – this might include equipment or a premises
- Human resources – a team of staff committed to help contribute through their skills and expertise
- Suppliers & contractors – an external team to conduct needed work, with cost-effective solutions
- This refers to the way(s) in which a business will make money. For some business types, there can be several options.
- Popular business-models include:
- Direct one-off sale
- Direct subscription
- Sale to intermediary
- Sale of enterprise
- This refers to the way(s) in which a business will make their product or service available to end-users.
- A business needs to select distribution channels that suit the spending patterns of end-users.
- This video uses a case study of Apple, and how it distributes iPhones through different channels.
- Branding refers to the way(s) in which a business is perceived by all stakeholders (i.e. customers, suppliers, and employees).
- Advertisements, customer service, packaging, and logo designs should reflect the brand strategy, not the other way around.
- For entrepreneurs to understand their brand, they need to address issues like:
- Company vision, values, and culture
- Quality standards
- What makes them different
- Launching a business is not as simple the click of a finger. There needs to be a strategy in place of how this is done, relating to:
- The suite of traditional advertising and marketing tools used to inform segments of the target market.
- Timing of how a product or service is released.
- The pricing and promotional strategies to initiate a customer base.
- A tough part of running a business is knowing which methods are optimal for raising money (also known as capital). Answers become clearer when considering:
- Needed investment (i.e. over 3-5 years)
- Personal savings
- Cash flow stability
- Desired stake of ownership
- This video presents the pro’s and con’s of methods like self-financing, debt raising, and equity raising.
- This refers to the way in which a business organises its chain of management and decisional power.
- Some businesses are better suited to vertical structures, whereby decisional power is concentrated in the hands of one, or few managers.
- Some businesses are better suited to flat structures, whereby decisional power is decentralised, and each employee operates with some degree of independence (or autonomy).
- Businesses operating in Australia, can have different structures for tax and legal purposes.
- Sole trader – a simple structure , often suited for a single business owner
- Partnership – a simple structure, often suited for two or more business owners
- Company – a separate legal entity, often useful for business owners seeking limited liability
- This refers to the administrative (or back-end) functions of a business, that are required to stay operational and achieve efficiency. For some businesses, this may require its own set of staff to manage.
- Operational functions include:
- Legal compliance
- Management of client payment systems
- Management of accounting records
- Management of premises
- Management of data and information
- All businesses should have at least a loose exit plan, in the instance that the owner(s) wants to withdraw for seen, or perhaps unforeseen reasons.
- It is common for businesses to face high financial costs when changing ownership or unwinding the operation.
- This video presents different strategies such as direct sale, IPO, and liquidation.