Resources for new entrepreneurs - Part 1

I am starting a new series of posts on small business entrepreneurship. This 4 part series will cover the process, organisations, and other resources required to build a new business. I hope this series would be useful to you.

Introduction

Many of us wish to start a business but we are seriously in need of information that can help us start up and succeed in owning our own business. Often, we keep waiting and let opportunities pass by. If you are an entrepreneur or want to be one, then you need to actively hunt for information that can help you get funds, acquire the first set of customers, get recommendations from them, hire great employees, partner with people who believe you, and make profits early enough.

Entrepreneurs are typically so busy in creating and marketing products that they forget that there is a massive entrepreneurship eco-system that can benefit them. In this article, we have tried to capture a part of that eco-system.

Choosing a business

You need to first choose a business. Most people choose to do business in their area of profession or study. However, this is not necessary. You should choose your area of business objectively. Certain businesses are at a stage in their lifecycle that makes them unsuitable for new investment. Often, we find that an area of your interest may be already too heavily invested or it is too capital intensive for you to organise funding. If you plan to enter a technology based business, then refer the book Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures by Scott A Shane. This book discusses what factors help determine a potential business’ success and what you should look for in a potential business idea before considering to adopt it. If you yourself are not a technologist who has deep knowledge of the field, then you should have access to qualified people who will join you as partners or employees.

If you plan to enter the business via a franchise, it’s not a bad idea. Franchise route is considered safer because the business has been proven, it has a set of processes and practices that are already worked out and tested, and you get training, support and expert experienced help. And of course a brand that already has a proven goodwill in the market. Don’t forget, it comes at a price in terms of franchise fee and margin out of your sales.

Funding

You need funding for your chosen business. Except for ventures deemed safe by banks, such as certain franchises, most banks are wary of lending to new and untested businesses and people. For such ventures, their own savings or personal debt are the only funding avenues available. In some cases, investment by ‘angel’ investors and venture capital companies may be possible. In such cases, the venture should have a business plan in place (see below).

Venture capital firms have an association in Australia – AVCAL. Check this site to find, know more about and get contact details of active firms. Before you contact a firm, prior research is essential because most firms specialize in industry and domain, and the stage of the investee companies in which they invest. Don’t waste their and your time by not pre-qualifying the venture capital firm before contacting them.

Ausindustry provides grants for commercialisation of new and innovative ideas and can be helpful. If selected, your firm can receive a boost with a grant. You must be prepared to invest time in preparing their application material and documentation.

Business Plan

The business plan must present a compelling case in terms of innovative technology that can be patented, firm chances of expected revenues, a foreseeable breakeven point when the business will start generating profits, long term creation of market value so that investors have a chance of making profits by listings on a stock exchange or a trade sale. The business plan must be prepared by the entrepreneur themselves. However, if you are not very familiar with business issues, then consulting or help in business planning is available. You may check out Bplans or Bizplanit for business plan related software or services. Some other sites are Successfulbusinessplans.

Start-up help and mentoring

A range of firms help small business owners to get traction with their business, attract funding, prepare business plans, protect their ideas and market their product. Trademark and IP lawyers must be contacted to register your trademark and apply for patents. Check out LawCentral for law related resources. Business Strategies International helps small entrepreneurs by handholding them through their initial years.

Australian Anthill is a Web site and a magazine that carries comprehensive articles and resources on entrepreneurship. Check out Dilip Rao’s blog for more information on entrepreneurship help in Australia. Dilip is a successful entrepreneur who knows what it takes to start up an enterprise.

You may choose to get mentoring help at The Indus Entrepreneurs. As a TIE member, you can apply to be mentored by an experienced entrepreneur who often uses global network and resources of TIE to help their members.

The entrepreneurship eco-system is much more than this. There are many other start-up Web sites, groups, books and other resources. You can become part of entrepreneurship associations that help you network with investors, potential customers and partners. We will check out the other resources in the next post.