Harris Start-up

A Practical Guide to Starting and Running a New Business
2006
ISBN: 978-3-540-32982-4
Verlag: Springer
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 165 Seiten, eBook

So your dream is to start your own business. But how do you know if it will work and how do you make it a reality?Start-up is a user guide for aspiring entrepreneurs and provides expert advice and guidance on every aspect of launching a new business. It will be of particular value if you are an academic wishing to exploit the commercial value of a new technology or business solution through the creation of a new company. Step-by-step, this inspiring and highly readable book covers how to evaluate the strength of your business idea, how to protect your invention, what legal steps and responsibilities are involved in forming a company, how to position your products in the market, how to create a business plan and raise finance.The case studies, practical exercises and tips in this book will help to demystify the process of starting a new business, give you the confidence to do it and greatly increase your chances of realising your dream.

Zielgruppe

Professional/practitioner

Autoren/Hrsg.

Harris, Tom

Inhaltsverzeichnis

1;Acknowledgements;5
2;Contents;6
3;Introduction;8
4;1 How good is your idea?;10
4.1;1.1 A stable platform;11
4.2;1.2 Industries and markets;11
4.3;1.3 Analysing the market;12
4.4;1.4 Analysing the industry;29
4.5;1.5 So, do you have a business?;36
5;2 How can you protect your ideas?;38
5.1;2.1 Loose talk costs lives!;39
5.2;2.2 Types of intellectual property;39
5.3;2.3 Patents;41
5.4;2.4 Registered designs;54
5.5;2.5 Trade marks;55
5.6;2.6 Copyright;57
5.7;2.7 Working with patent agents and IP lawyers;58
6;3 What is a company?;60
6.1;3.1 The company as a legal entity;61
6.2;3.2 Role and rights of shareholders;65
6.3;3.3 Company ownership and types of shares;66
6.4;3.4 Shareholders agreements;70
6.5;3.5 Roles and duties of directors;71
7;4 How do you market your product?;76
7.1;4.1 Marketing and selling;76
7.2;4.2 The product adoption lifecycle;78
7.3;4.3 Moving from one group to the next;82
7.4;4.4 Critical success factors;87
7.5;4.5 What should be in your marketing plan?;93
8;5 How do you finance your business?;96
8.1;5.1 Cash flow;96
8.2;5.2 Sources of finance;100
8.3;5.3 How does venture capital work?;108
9;6 How do you create a financial model?;120
9.1;6.1 The basic structure;121
9.2;6.2 Business planning tools;124
9.3;6.3 Building the model;126
10;7 How do you write a business plan?;146
10.1;7.1 What should your business plan contain?;148
10.2;7.2 How should the plan be prepared?;153
11;8 Your role and your team;158
11.1;8.1 What do you want to achieve?;159
11.2;8.2 Satisfying the critical success factors;160
11.3;8.3 How important is experience;162
11.4;8.4 Networking;163
12;9 Closing remarks;166
13;References and further reading;168
14;Index;170

Leseproben

6 How do you create a financial model? (p. 113-114)

You will need a financial plan for your business even if you do not need to borrow money or sell equity in your company. The process of creating a financial model is really about planning and understanding the detail of how your business will work and operate. Without a financial model you cannot know what you can afford to spend, what you will need to sell your products for, how much you can pay yourself and your team or even if your business has any chance of remaining solvent.

The first thing to understand about creating a financial model is that it is a team effort involving everybody that will be involved in the running of the business. If you create it in isolation from your team, they will not understand the assumptions you have made and feel that you are imposing targets and restrictions on them without consulting them. Worse still, if you leave it to an accountant to create a plan for you, you will not understand it either.

It is essential that you and your team can buy into the plan, its assumptions and areas of criticality. Fortunately, creating a financial model is actually a very exciting, creative and stimulating experience. In working through the process, you will have many debates and take many decisions that affect the shape of your business and how it will operate. By far the best way to create the plan is to assemble the team (ensuring that they have enough tea and chocolate biscuits for the task), project the computer display so that everybody can see it, then either using a pre prepared spreadsheet template or business planning tool, work through the process in an orderly fashion. The result will be a plan that the whole team understands, believes is achievable and is committed to.

6.1 The basic structure
A financial model consists of a balance between income and expenditure. The income needs to be large enough to cover the expenditure required to generate it and leave some residual profit, either for future investment or distribution to the shareholders. The income side of the equation consists of sales of products and services and any other income you can generate, such as from licenses that you have sold. The total of this income is known as turnover.

The complexity of this side of the equation comes in forecasting what your future sales are likely to be and what prices you can charge. The first element of the expenditure side of the equation is the cost of sales. This is the cost to you of making and delivering the product, or of providing the service. This should only include the direct cost of providing the product or service and as such could include your manufacturing costs including the shop floor salaries, but should not include your sales and advertising costs or the salaries of salesmen. The turnover minus the cost of sales is your gross margin.

If you look at your gross margin as a percentage of your turnover, you can quickly gain an appreciation for the potential health of your business. If the gross margin is low, say less than 10%, you are not making much money from each sale and you will either have to sell high volumes or the rest of your business will need to be very efficient to allow good profits to be made. A high gross margin is much more likely to lead to a profitable business, providing you can sell enough of them at that price.