starting a business

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.

research

  • 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

product development

  • 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

business model

  • 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
    • Fee-sharing
    • Franchising
    • Sale of enterprise

product distribution

  • 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

  • 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

go-to-market strategy

  • 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.

business financing

  • 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.

organisation structure

  • 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).

business structure

  • 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

operations

  • 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

exit strategy

  • 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.
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