How Much Cash Will You Need To Launch A Startup?

How Much Cash Will You Need To Launch A Startup?

As you consider starting your first business, you should be looking at the costs of running a company. There are some obvious things most people will consider: the cost of rent in their area, the cost of inventory, the manufacturing costs of their products. But there are a number of factors that many first time entrepreneurs forget to factor in.

For example, if you haven’t launched a startup or a new business before, you might forget to calculate benefits costs for employees, for example, or utilities in your office or retail location. These might seem like small costs, and each one individually might not be overwhelming. If more than one or two things get missed, however, companies might find themselves without enough available cash to get off the ground in the first place.

Let’s look at some of the costs that business forget to factor in.

1. Licenses, Dues, and Permits

Every area of the country requires businesses to have certain permits, for buildings to be coded in certain ways, and for some sectors of employees to have licenses before they can practice. All of these items have a cost. Some entrepreneurs might think that they can simply run their business out of their basement or garage, but even that can run you afoul of different homeowner’s insurance regulations.

Since each community is different, there’s no way to give an overall estimate of what the licensing and permit costs might be in a particular area, but speaking to the local Chamber of Commerce is often the best way to get more detailed information.

2. Website Costs

Some businesses are entirely formulated around buying and selling websites; this should tell the average business owner something about how complex the process of setting up a website can be. If your website is strictly informational, then you can probably get it set up quickly, on your own, and without a huge cost. Informational websites tend to be pretty static.

Pages exist about employees, perhaps, or services offered by the company. Landing pages generally direct customers to take an action, such as calling your business for a free quote. Many companies choose to pay a content writer to maintain a blog for their company to keep the page fresh in Google SERP.

But if your website involves inventory, online shopping, or other service bookings, however, creating and maintaining that website can get expensive fast. For some businesses, this is necessary; they may not have a retail storefront at all, and their website may be the public face of their business.

3. Repairs

If your company manufactures a product, the item doing the manufacturing is going to break down eventually. Offices lose computers, copiers, and networking devices to age, misuse, and attack. Companies need to be able to respond quickly to broken items to avoid disruptions in business that can cause further problems.

Making sure that a company has the adequate liquid cash to pay its bills and meet any surprise obligations is a good way to make sure the business is successful over time. Remember, the rule on emergencies isn’t if they will happen, it’s when.

4. Employee Benefits

Some companies budget for the amount that they will pay their employees, but forget about tax contributions and other amounts. For example, if a company offers a 401k plan with a matching benefit, the company needs to be prepared to pay that matching amount in when appropriate.

Some experts suggest that paying employee benefits means that companies should budget for 40 percent over their on-paper salary amount.

5. Business Insurance

Some companies try to save money by not buying business insurance; this is a terrible idea. Much like driving a car without insurance, companies are risking their entire business, and possibly even their personal assets, by being negligent in this area.

Don’t be afraid to negotiate with the chosen insurance provider and make sure coverage is right-sized; a business without employees doesn’t need to worry about worker’s compensation insurance yet, for example.

Businesses tend to thrive when they have plenty of available assets and a well thought out plan on how to spend them. But to truly understand how funds will be spent, companies need to make sure that they have an accurate budget and a good plan that allows for unexpected costs. If companies are unsure how to get started in this area, reaching out to a business mentor for advice in their industry can be a good start.

 

Modern Start-Ups

It is really an interesting time for  entrepreneurship and your business, isn’t it? Sales are rolling in, and your customers are happy. Are you willing to do what it takes to expand? Do you have what it takes–in your head and in your gut–to enter a serious growth phase?
Before you decide to enter a high-growth phase, here are five indications that you are ready to make such a move:
1. Migrating from a startup to a fast-growing company requires passion, dedication, and near total immersion. You must deal with pressure and incredible anxiety, take on enormous responsibility, and still manage to balance other aspects of your life―like family and health.
2. Of course, revenue alone doesn’t make a functioning business. Revenue and profits are two very different things. Is your business model structured in a way that you’re not just making a profit today but can continue to be profitable?
If you are already profitable or can see a rational and clear path to scalable and sustainable profitability, you may actually be on the road to growth.
3. Growth only happens when all needed “human elements” are in place. This means people who have either worked in a large and thriving business or understand the technologies needed are the right employees to fuel sustainable, scalable growth.
4. When businesses grow, cash can be consumed by any number of incremental expenses including higher rent, utilities, payroll, and inventory costs. If you are planning to grow, then you must have far more cash at your fingertips than you need to just make payroll. You need to have cash available to put back into the business.
5. You have your processes in place. But as you grow, there must be processes and systems in place to deal with volume spikes and dips.IMG_0550

The Paradox of Growth

The Paradox of Growth

Growth creates complexity and complexity is the silent killer of growth. The roots of sustained performance start deep inside, and they are predictable in a growth environment. Growth also scares a lot of creative entrepreneurs when they think of the challenge of expansion.

 

External Story of any Business

This is the narrative that plays out in the marketplace in the form of:

  • Quarterly EarningsProfitable Growth
  • Returns to shareholders/Market Share

    This is the story that is easiest to track, and it’s the one that most people – boards of directors, investors, the media and the public – choose to follow. It’s a story about how a company wins on the outside by serving the customer better than its competitors.

    Internal Story of any Business

    The second story plays out inside a company and it’s much less visible. It’s a story of:

    Building the business/Retaining a quality workforce

    Strengthening the culture/Upgrading the systems

    Some companies excel externally but are troubled internally; others are troubled externally but excel internally. Ultimately though, companies have to excel in both arenas if they want to succeed. The plot lines have to converge.

    You can’t sustain profitable growth in a competitive market if you are a disaster internally, and you can’t maintain a high- performance culture internally for long if you are failing in the marketplace.

    In order to build a successful business in the 21st Century, the Entrepreneur would have to apply techniques and strategies that have not yet been trail and tested because of the ever changing global business environment.

     

How to Launch Your Own E-commerce Store from Home

How to Launch Your Own E-commerce Store from Home

The world of Ecommerce has developed rapidly over the last 10-years with all major global brands now actively selling their services and products online. In mature Ecommerce markets like the United States, Business Insider states that over 17% of sales will happen online by 2020, and this figure could even go up at the rate it is going.

With the trend steadily moving towards more Ecommerce sales, aspiring entrepreneurs all over the world and have many different Ecommerce platforms to choose from.  In India, Flipkart is leading the way. It’s India biggest Ecommerce platform and currently commands around 57% of the market ahead of Amazon. It’s a large market share if you compare it to the North American market, although the US and Canadian markets are obviously a lot more competitive.

Magento is the most popular with 29.1% with other platforms such as ZenCart and Big Commerce following close behind. Canadian Ecommerce platform Shopify accounts for 10.9% of the market. This is mainly due to it being one of the most “hassle-free to set up” for first digital marketing entrepreneurs venturing into Ecommerce, according to a Shopify review by Ecommerce Guide.

But regardless of the major brands hoovering up the majority of consumers with their large-scale digital marketing campaigns, the market in general also has areas of opportunities for budding entrepreneurs to seize on. After all, the global Ecommerce market was predicted to reach $1.9 trillion by the end of last year – it will undoubtedly surpass that mark this year.

Why Ecommerce Could Work For You

The best part about an online business is its practicality and flexible nature. A physical office usually means a sizable financial outlay to begin with not to mention office equipment and any legalities that come with renting space. Additionally, it can become a financial burden or even a limitation if you’re pinned to a long-term contract that doesn’t allow you the scope to down size or scale up. Online, the world is your oyster and you can react more fluidly depending on how your business is performing.

The Basic Steps to Get You Started

Carving Out Your Niche

At the beginning of the whole process, let’s assume you already know what you are going to be selling online. The real focus needs to be on how you’re going to sell it, and how you are going to reach your potential target audience. The way you operate needs to be unique, otherwise without the big budgets of the high street brands, you will get lost in the sea of consumer brands.

Set Your Price Points

Arguably one of the main things that will determine if your product sells online is its price. Without stating the obvious; if it is too pricey you may price yourself out of the market. If you’re too cheap then you probably won’t function as a business for long. The best way to find that midpoint is to do market research across your competition.

This way you will gain a good understanding of the market you’re about to enter. In an ideal world you need to have a margin of 30-35% profit so that you have the ability to post healthy revenues as well as give you the opportunity to scale the business over time. This margin will also be determined by what industry you’re operating in, so it’s imperative to do your research.

Finding Your Manufacturers

Not everyone manufactures their own products in-house, even more so if you’re working from home. Therefore, it’s an absolute must to sort out your manufacturers, availability and shipping costs before even building your site. These can make or break your dream before you’ve even started as they all need to be factored into your overall cost per product and will affect your top line.

Finding online manufacturers is a tricky game so you need to be ready to do your research.  Sites like IndiaMart, Alibaba, ThomasNet and Bambify are a good place to start.  Take your time in making your decision and don’t be afraid to try our different manufacturers in order to find the right one for you.

Let’s Get Technical

Once you understand your market and services/products that will help you grow your business, the next step is building your Ecommerce platform and getting the hosting package that suits you, along with everything else that comes along with your newfangled business venture. Here is a run-down of what you’ll need:

Choosing an Ecommerce platform – As stated above, one of the best for beginners is Shopify as it has a very easy interface and is extremely user-friendly, is good for scaling up and growing your business. It’s also very cost-effective.

Domain Name – Make sure it stands out; it’s easy to read and is a great representation of your product/s and brand.

Logo and Website Skin – Again, this needs to represent your brand to your target market so make sure it’s something you’re proud of and can work with for years to come.

Hosting – Find an affordable hosting package that will give you a stable platform to sell your products online.

Testing Your Business Idea

Testing Your Business Idea

Before you go ahead to actually start your business, there are ways to test your idea to see if it is capable of really making you money or not. Somewhere between scribbling your idea on a piece of paper and starting a business, there is a process you need to carry out that mainly determines either your success or failure in business.

A lot of times, would-be entrepreneurs get carried away by their “epiphanies” the moments they imagine they have found the perfect idea and forget to test the idea to find out if it is actually viable or not.

And mostly if there is a need for your business idea in the market. We call it “evidence based market research“.

There are some steps required to test your business idea; these steps are necessary so as to keep from wasting valuable time and money on unfocused or untargeted activities. Of course, there are times that an idea turns out to be a great business idea anyways, in spite of a lack of market research. Unfortunately, a lot of other occasions, an untested idea always crashes and burns.

If your idea for a business seems too tiresome and clunky, it is great to create a model for it. It’s not only when the idea feels clunky that a model is needed, creating a model is very easy to do and updating it is a breeze. With a model, you get to enjoy a clear overview of the building blocks of your business idea: the customer segments, channels to reach out to clients, value propositions, revenue streams, key resources, customer relationship, principal partners, activities that create value, and cost structure.

Execute a market survey After a model has been created, the next step in testing your business idea is to execute a market survey. A Market Survey is an organized effort to gather information about your target audience or customers.  Absolutely no business should be launched without the execution of a market survey. A Market Survey provides important information to identify and analyze the market need, market size and your competition. There are sites where this can be done, you just create an online questionnaire and share the link to the survey with your target audience, this transcends geographic boundaries and helps you gain a broader perspective and is often more preferred to the traditional method of printing out and handing questionnaires yourself, although a combination of both is the best approach.

Another way of carrying out a market survey is to conduct a Focused Group Session both before and after the completion of your Minimum Viable Product . Here, you invite people from your chosen target demographic to participate in a group discussion on the products or services. They would be advice to speak freely about what they want done; that is before the product is ready and what they want to be changed, when it is done. A focus group is a very good idea and would help achieve the following: It helps you find out your customers first impression of the product. It helps gather real -time customer’s feedback on the virtues and vices of the products.

When your idea  looks a Flop, you discover a lot of holes in it, it doesn’t mean you need to totally scrap the whole business start-up plan and resign yourself to life as an employee. Sometimes, the “terrible” idea is just in need of some reworking. It can be disheartening when an idea is revealed to be a flop, considering the amount of time and money you have already invested in it, first during the idea stage, and then the market research stage to test it, however, giving up is never and has never been the right option. Rather, it is recommended that you take time out and focus your energy on determining exactly why your idea would not work and where it needs improvements to ensure future success.

Although no entrepreneur wants to hear that his “idea” is flawed, only by listening and reacting to feedback from others can he give his idea a chance for success. Ask yourself, is the weakness one that can be overcome, if the answer is yes, work on overcoming it. However, if your answer is no and the weakness discovered in your plan cannot be overcome and the idea made to create true value for your customer and your business, it is time to leave that idea and pursue another one.

Now for the other option after testing, wthen Your Idea is great and Ready to Go.

factor to consider is , you want to set a price that is competitive and still capable of influencing people’s Pricing decision to buy from you, this is especially necessary if there is much competition. now, do not immediately dismiss this advice, think about it. When you start always pricing high, when high the pricing structure isn’t working, you can go a tad lower, your customers would be happy that your product is now “cheaper” and they’ll purchase more from you. If however you start low, you can never go up without losing a lot of customers who will feel your services are too “costly.” It is best to test different pricing offers, each month, set a new price for your services, and remember to keep going a little bit lower until you reach the minimum percentage of profit you have decided to make on each product.

Ways to Get More Referrals for Your Startup Business

Ways to Get More Referrals for Your Startup Business

A study by market research firm, Nielsen, showed that 92% of customers trust recommendations that came from friends and family. Word-of-mouth is a powerful marketing force that is based on trust that you can nurture and have consistently in your business. Best of all, it is cost-effective compared to other marketing strategies.

A wonderful analogy for a business is a web of connections. The truth is that every person that your startup interacts with has his or her network of people your business can give value to.

Here are solid ways to get more referrals for your Startup Business.

1. Don’t be afraid to ask

The first way is to just ask for the referral from your current network of friends, colleagues, family and an initial bunch of customers. Ask them nicely if they could refer your business to their network. You might even throw in a little cash incentive for every referral they bring to you.

2. Over-deliver with your current group of customers

The only way your current customers will refer you to their network is when you delight them and provide way more value than they expected. Marketing guru, Seth Godin, always reminds startups to be purple cows by standing out from competition through excellent products and customer service.

Let the uniqueness of your brand stand out and unleash happiness on your customers. That is the only way your current customers will proclaim on their social media platforms that everyone should try your products and services.

You can over-deliver by managing expectations and not making them expect too much. You can also be exceptional in after-sales service.

Tip: give them a bonus after you have successfully provided the product or service to them.

3. Make sure your contact information is accessible and easy to share for people to share.

This means that your contact information (email, website) is in all your business materials, including your invoices, email signatures, marketing materials and of course, social media. This allows your contact information to be accessible and easy to share by those who interact with you.

Business cards are not dead provided you make them unique and related to your business. Give them away freely even if the person may just be an acquaintance. There’s still the chance they might refer you to their friends especially if they respect and think highly of you.

Finally, make sure that your contact details in your customer’s mobile phone so that they can easily share your details with the right people.

Make it easy for them by providing your brochures, latest newsletter or any of your marketing materials that they can easily distribute that will describe what you offer to the market.

4. Optimize your website for conversion

Optimize your website so that there are plenty of calls to action there that will influence your website visitors to share or refer the site or content to others.

If you have an online store, make a request for referral at the end of the successful transaction. They just had a positive experience with you, and they will be more receptive to a request to refer your product or service to their network.

4. Be helpful

If you want to get referrals, you should also be willing to make referrals especially the services or products your current clients promote. Of course, only do it if you truly believe in what they are offering. By creating a win-win scenario, you boost trust and gratitude from your existing clients and the law of reciprocity will now take over and they will also gladly promote your business to their network.

5. Stay in touch with current and previous clients and associates

At the end of the day, referrals work because of relationships. So strengthen your existing relationships and warm up those previous relationships in your network. Catch up with them through email, chat or a quick cup of coffee. This helps you to know their current situation so that you can help give suggestions or give help personally or through recommendations.

Optimize your email marketing so that you can create customized lists of customers and associates who might like a specific type of content. Then regularly send relevant material to them so that their information needs can be met. Plus, they will be thankful that they’re always on your mind.

By nurturing your relationships, you’ll always be on the top of their minds when it comes to the industry you are operating in.

6. Treat those that referred you to new clients very well

To those that referred you already to new customers, you should treat them like VIPs. Give them a call or write them a personalized note to thank them for referring others to your business. Find time to treat them to coffee or a quick meal. Alternatively, if you have an existing referral payment system, promptly pay them along with a personalized call or note.

If possible, host a party once in a while with those that played a big role in growing your business through their referrals.

This strategy will nurture your relationships with them further, and they will gladly continue to be your biggest ambassadors to their network

Final Thoughts

Getting referrals is probably the best way to grow your business especially if it is a localized business and if you do not have a big marketing budget. Always remember that the heart of the business is all about relationships. Don’t see business as just transactions. Behind the transaction are real people with which you can nurture win-win relationships for the long-term.

 

Start-up costs for an accommodation business

Start-up costs for an accommodation business

After much soul-searching, you’ve decided that you want to open your own guest house, boutique hotel or B&B. There are many factors to consider, such as where your business will be and who your target market is, but much of these decisions will be based on your budget, so that may be a good place to start.

Here are just some of the costs associated with setting up a new accommodation business:

  • The cost of building or buying a new premises
  • The size of the entire property and its location (rural or urban) will influence the building costs. For example, the cost of transporting equipment, furniture, etc. will be higher if one is further away from an urban area
  • The level of refurbishment, renovation or upgrades needed; including landscaping the garden and building/maintaining the pool
  • Room: Beds, TV, linen, furniture, towels, curtains, bathroom mats, lamps, coffee sets, décor
  • Dining Room: tables, chairs, table-cloths, cutlery, crockery and glassware, décor.
  • Kitchen: Appliances (perhaps industrial sized) like fridges, stoves and coffee machines, cooking utensils, bains maries, hot-plates, etc.
  • Public areas: Furniture, mirrors, décor and other fixtures
  • Consumable stock for the kitchens and bedrooms
  • Office: Computers, printers, copiers, booking systems, furniture, office supplies (guest register, purchase orders, letterheads, etc.), switchboard
  • Licenses and levies: there are various documents you will have to apply for, such as a zoning certificate, trading license and perhaps a liquor license. These cost money, so it must be included in the budget
  • Marketing: A professional website, ads, business cards and brochures will be needed
  • Other modern conveniences, such as Internet access/wifi, DSTV, air-conditioning
  • Hiring employees is a significant start-up and on-going cost. In the beginning, employees will have to be trained and provided with uniforms

The extent of these costs will depend on the type of establishment and its target market – perhaps the star grading you hope to get – as this will dictate the quality or luxury of the materials that need to be purchased.

Financing your start-up

Any financial institution you approach to finance your business will expect you to have an own cash contribution and an asset you can use as security. This means that you will need a smaller loan, which will help when it comes to having enough monthly cash flow to service the debt. In order to cover any finance repayments and to keep your business viable, you should not have more than 50% of the value of your business being debt.

Create Your Marketing Plan

Create Your Marketing Plan

Your marketing plan should be a clear, concise, and well thought out document that guides you through your marketing program. Using a marketing plan template will help you focus on the objective of your marketing and how you intend to accomplish that objective. Whether your company provides products or services, your marketing plan is essential to your success.

The six major elements to creating a successful marketing plan are listed below. Creating a marketing plan template from these points can help you stay on track. You may only need only a sentence or two per section… or you might want to break each down into a few succinct bullet points.

  1. The Purpose
  2. Your Target Customer
  3. The Benefits of Your Product or Service
  4. Your Positioning
  5. Your Marketing Tactics
  6. Your Marketing Budget

As you go through each section, keep the following tips and hints in mind:

Keep your marketing plan simple.

Many small business owners get so involved in details that they lose sight of their goals. By keeping your plan simple, you will create a clear roadmap that focuses on what you need to accomplish.

Write your marketing plan down (as opposed to thinking about it and keeping it in your head).

It is important to have a document that will remind you what you are trying to accomplish. A marketing plan template is an excellent place to start.

Be direct and be clear.

If you’re not sure, ask a friend, relative, colleague or employee to read your plan. They should immediately grasp your goals.

Don’t build in too much flexibility.

You may be tempted to plan for various market contingencies. If your market changes that quickly, then you should incorporate that into your plan. But create a strategy you can keep to – that’s the purpose of having a plan in the first place.

Review your marketing plan often – quarterly or even monthly.

That doesn’t mean you have to revise it every month. But take some time to evaluate it and make sure you’re on track.

Finally….never stop marketing!

Once you have your plan in place, you need to take action. Commit yourself to your marketing program. Don’t let yourself stagnate. Keep at it, and you’ll be giving your business the opportunity to flourish.

KIMBERLEY First Facts

Colonial Commissioners arrived in New Rush on 17 November 1871 to exercise authority over the territory on behalf of the Cape Governor and by Proclamation dated 5 July 1873, New Rush/ Vooruitzigt  was named Kimberley after then Secretary of State for the ColoniesLord Kimberley.

Kimberley was the initial hub of industrialisation in South Africa in the late nineteenth century, which transformed the country’s agrarian economy into one more dependent on its mineral wealth. A key feature of the new economic arrangement was migrant labour, with the demand for African labour in the mines of Kimberley (and later on the gold fields) drawing workers in growing numbers from throughout the subcontinent. The labour compound system developed in Kimberley from the 1880s was later replicated on the gold mines and elsewhere.

The city housed South Africa’s first stock exchange, the Kimberley Royal Stock Exchange, which opened on 2 February 1881.

On 2 September 1882, Kimberley became the first town in the Southern Hemisphere to install electric street lighting.

 The rising importance of Kimberley led to one of the earliest South African and International Exhibitions to be staged in Kimberley in 1892, It presented exhibits of art, an exhibition of paintings from the royal collection of Queen Victoria and mining machinery and implements amongst other items.

South Africa’s first school of mines was opened here in 1896 and later relocated to Johannesburg, becoming the core of the University of the Witwatersrand. A Pretoria campus later became the University of Pretoria. In fact the first two years were attended at colleges elsewhere, in Cape Town, Grahamstown or Stellenbosch, the third year in Kimberley and the fourth year in Johannesburg. Buildings were constructed against a total cost of 9,000 pounds with De Beers contributing on a pound for pound basis.

South Africa’s first school of aviation, to train pilots for the proposed South African Aviation Corps (SAAC), was established in Kimberley in 1913. Known as Paterson’s Aviation Syndicate School of Flying, it is commemorated in the Pioneers of Aviation Museum (and replica of the first Compton Patterson Biplane preserved there), situated near to Kimberley airport. In the 1930s Kimberley boasted the best night-landing facilities on the continent of Africa. A major air rally was hosted there in 1934. In the war years Kimberley Airport was commandeered by the Union Defence Force and run by the 21 Flying School for the training of fighter pilots.

Work on connecting Kimberley by rail to the cities along the Cape Colony‘s coastline began in 1872 .The railway line from Cape Town to Kimberley was completed in 1885, accelerating the transport of both passengers and goods.The railway connected Kimberley with cheaper sources of grain and other products, as well as supplies of coal, so that one of its local impacts was to undercut (mainly African) trade in fresh produce and firewood. The railway reticulation eventually would link Kimberley with Port Elizabeth, Johannesburg, Durban and Bloemfontein in later years. The railway reticulation eventually would link Kimberley with Port Elizabeth, Johannesburg, Durban and Bloemfontein. The major junction at De Aar in the Karoo linked early twentieth century lines to Upington (later to Namibia) and to Calvinia. From the 1990s there was a decline in the use of the railways.

Robert Sobukwe started the first black-owned law practice firm in No.2 (Ghetto) a township in the suburb of Galeshewe in 1975 after serving a 9 year jail term for incitement, he was banished to Kimberley under a law called “Sobukwe Clause”which kept him exile here in Kimberley.

robert sobukwe

the-real