demystifying the startup process
DESCRIPTION
TRANSCRIPT
What are
frequently asked
start-up questions?
Where will I get seed-funding?
How do I know if my idea is a good one?
Can I protect my idea?
Will I have tax obligations?
How do I know if an opportunity exists?
Should I go it alone?
What structure should I choose?
What are the pre-venture
considerations?
Idea
Opportunity
Value Proposition
Required Resources
What do I look for in assessing an
idea?
New Market
Providing customers with a product or service
that does not exist in their market. The product
or service may exist in other markets but is not
currently available in your market.
New Benefit
New Technology
Provides customers with an improved product.
Basically a “me-too” product strategy that
provides a “new benefit” not offered by the
competition.
Replication
Is the product a replication of existing products?
That is, a “Me-too” idea – no point of
differentiation and no innovation.
Introduced for the purpose of providing
customers with a new product that does not
exist in any market.
How do I identify and analyze the
opportunity?
• Changing demographics
• Emergence of new markets
• Social change
• Regulatory change
• New Technologies
Identification
• Is there an un-met or under-served need?
• Will your product/service meet that need?
• Are there people willing to pay?
• Do you have an advantage relative to your competition?
• Feasibility Assessment
Analysis
tip……
in choosing a business idea, stay committed
to solving the problem but be
flexible in finding the solution….It is
the solution that is important, not the product
or service
“If I had asked people what the wanted, they
would have said faster horses”
–Henry Ford
What is your value proposition?
Benefits of the product/service
Differentiation
Proof of value
What resources are required? Key
human resources
• Management
• Technical
• Marketing and sales
Financial
Licences, patents
and legal protection
Physical • Equipment,
materials, location, location, location
Knowledge Resources
• Knowledge economy (intellectual capital)
• Currency of business
• Intellectual property
• Structural Capital
Checklist ….
Idea
Opportunity
Value Proposition
Resources Required
What is the venture creation start up model?
Document Strategic Direction
Formalize your business
Develop internal structures and processes
Implement
Harvest
How should you document your strategic direction?
THE BUSINESS PLAN
• roadmap that describes where you’re going and how you’re going to get there
• guide to achieving your goals
• tool to spark investor interest
• helps to foresee problems
• helps employees understand the company’s reason for being and where it plans to go
THE STRATEGY MAP
• Used to document the enterprise’s primary strategic goals and performance measures
• Diagrams that allow you to quickly visualize your performance
THE BUSINESS MODEL
• The plan an enterprise uses to generate revenue and make profits. Components:
• Customer segments
• Cost structure
• Channels
• Revenue streams
What are the key elements of the
business plan
Description of your
products and services
Market and industry analysis
Competitive analysis
Marketing strategy
Management team and operations
plan
Financial analysis
What are the key activities involved in
formalizing a business?
Choose a name
Choose a business structure
Register trademarks
Acquire licenses and permits
Register for tax payments
tip….. different legal structures protect you in different ways and
offer varying tax advantages
What Business structure should I
choose? • Often, for a micro or small
business: Sole Trader
• For a group of sole traders: Partnership
• Requirements to register: Fee of approximately $2,500.00
• Tax Registration Number (TRN)
• Fill out BN1 or BN2 Form (available online)
• Identification
• For more info: www.orcjamaica.com
• Companies Office of Jamaica – 1 Grenada Way
• Options – Sole Trader
– Limited Liability Company
– Partnership
– Co-operatives
What is a trademark?
A sign that is graphically represented and capable of distinguishing the goods or
services of a person, company or legal entity from those of another.
Can be comprised of words, letters, numbers, designs, names, slogans,
symbol, colors, images, packaging, etc. or a combination of the foregoing.
Who needs to apply for licenses &
permits?
• Ecotourism projects
• Food Processing Plants
• Manufacturers of edible fats & oils, packaging materials etc.
• Modification of Wetlands
• Aquaculture facilities
• Slaughterhouse & Abattoirs
• Agro-processing and processing of agricultural
• Industrial projects
• Solid waste treatment/disposal facilities
• Housing projects
• Import, export and re-export for specified plants and animals
• Food Handlers
Who must file a tax return?
Self-employed Individuals (including
Partners) and employees with other
sources of Income
Partnerships
Companies Other Bodies
tip….. • persons earning under the income tax
threshold of $J507,312 annually
• businesses earning less than $J3m annually
are exempt from tax payments
How do you achieve internal efficiencies
Document Core
Processes
• Product delivery
• Customer invoicing
• Customer servicing
Document Management
Processes
• Human
• Org charts, Roles and Functions
• Technology
• Accounting – Book-keeping systems/software programmes
What are the key activities in
marketing and branding
Creating a logo
Website?
Advertising and/or
promotion
What are your funding options?
• Most businesses funded this way
• Institutions look at your cash flow, collateral and the liquidity of your assets
• Establish a relationship with your banker prior to your loan request (may factor in the decision to lend)
Debt Financing
• Designed to assist fuel the growth of small businesses.
• Research is critical to identifying Grants
• Investment in exchange for an equity or ownership stake in the business Equity Financing
You don’t have to give up a stake in the business
Cost of borrowing – i.e. - interest
Collateral required
Debt
Free money .
Highly competitive
How you use the funds is strictly defined
Grants
May be more convenient
May have less “strings” attached
May be available quickly
Limited one-time source of funding
Can hurt family relationships
Equity
What are the pros and cons of
each funding option?
How do banks determine whether
to loan you money?
Character
• Credit history is very important!
Capacity
• What is your track record of debt repayment?
Capital
• How long will personal resources support both you and the business?
Conditions
• Current economic conditions
Collateral
• Assets the company pledges as a source of repayment for the loan
• Timely
• Fills market gap
• People willing to pay
• Social, regulatory change
• Interest, passions,
Commitment
• Gives meaning
• Enjoyment
• Capabilities and
skills
• Good at the needed
tasks
• Dedicated,
consistent activity
ENTREPRENEURIAL
SUCCESS
How do you achieve lasting
success? (slide adapted)
tip…..
THANK YOU