Business start up guidelines for start up Entrepreneurs and other Business stakeholders
The phases for the construction of a business are varied and many of the following will deal with that relating to the conception and organization of the business through intermediaries. Too often it is taken for granted. Intermediation takes place either between individuals or between legal entities and is an activity that is part of the more general phase of planning and therefore has great influence on the success of the project.
In the case that such intermediation takes place between natural persons it is important to immediately clarify the boundary between human relationship and business relationship, on pain of confusion and conflicts. Too often it is assumed that conflicts do not arise, but it does.
In the human environment, empathy guides the relationship and communication between individuals. Trust is established naturally among people who have the pleasure to communicate each other frequently. To ensure successful communication there are important rules to be respected.
Using the empathy in communication to conclude the business certainly creates confusion and risks making potential conflicts real. Only declaring it explicitly reduce the negative impact in consequences.
In the business relationship it is generally the economic interest that drives the relationship and all that has to do with empathy must be kept outside the moments of meeting and reflection about the business. Therefore Economic interest but also personal and / or company motivation are the engines of the business.
For personal and / or company motivation, it implies that the person / company is ready to participate in the construction of the business and to finance resources and / or means of its own part of the business.
Creation of business with motivation of economic interest
1) When we talk to one or more people with the intention of proposing / verifying / starting a business all participants must be aware that everything has a monetary cost, time gasoline tickets, phone food etc. The first meeting can also be convivial where the business is part of the fun evening but it must be clear that everyone pays their share or if one pays for all this can not be charged to the future business. This approach is defined as unprofessional due to informal methods.
2) The formalities of a relationship where you want to create business also create quality and therefore professionalism.
A relationship is formal when, in the moment in which one of the actors has an idea of business, he writes it, even in the form of a draft, a project-like format.
If the aspiring intermediary or entrepreneur who thinks the business does not know how to elaborate the project idea, he must be able to acquire the knowledge by contacting a professional consultant.
3) Before sending your business idea to those that the creator thinks are the future partners we must ensure / protect ourselves with a Non-Disclosure Letter. This is common practice at the level of professionals but it is hardly ever applied when informal communication takes place. Once this Not Disclosure letter is signed, the project can be sent to all stakeholders.
4) Once the text / project of the business is shared, a meeting must be organized.
This meeting to have a decisive and sustainable character must be well prepared with the following methodology:
a- Establish the date: the creator identifies and contacts potential partners and after verifying their interest in the business asks them for availability for two dates indicating a period generally one week.
b- it proposes a place that generally has the characteristics of being easily reachable by potential participating partners. In theory you can also participate from home by connecting via Skype but the communication it will have not the same efficiency.
c- Writes the agenda and sends it to potential participants.
The agenda will have these characteristics
6- illustration of the project illustrating the role (promoter, consultant, entrepreneur, intermediary) and task of each potential partner in the business.
7- request for comments from participants who are asked to confirm their interest in the project for one or more of the roles indicated above.
8- if conditions are favorable, the decision (yes / no quantum) to formulate a budget will be made here.
9 – The above discussed is reported in a summary document called minutes of meeting and sent to each of the participants for their written agreement. Participants are obliged to communicate their agreement explicitly; otherwise they will be excluded from the business.
10-A Project Coordinator is appointed to carry out the preparation phase.
5) Choice of business approach and budgeting.
The phase 5A preparation is divided into the various activities necessary to complete this phase. The “Coordinator” heard the various participants each according to their expertise decides on the following types of approach to the business namely to act:
- Coordinator/Development and formulate its budget.
Each of these above functions requires a different involvement and the “Coordinator” once selected one of these functions must estimate his costs and submit it to the partners for the necessary approval before start.
Contact or simple intermediation means only making contact and following the discussion in its early stages helping people to understand each other and facilitating discussion and if the case negotiation
The brokerage activity consists of the following phases:
- a) Request for identification of a potential partner and subsequent acceptance
- b) Creation of the contacts
- c) Promotion of meetings and help with negotiation translation and serious guarantee of the interested persons presented
If limited to the above, the value of this brokerage is estimated at 1000 euros plus a percentage of 5 per thousand on collections for the first 3 years.
The thousand euro must be available immediately upon acceptance of the request a)
- d) In the event of conflict between the parties, the Intermediary will take on the role of Coordinator
5A2: – Coordinator/project Development
– Coordinator act as developer for the project and it means that participates actively in the implementation process. In this case the various phases of the chain are decided together, in a transparent manner by the parties involved as well as the composition of the price from production to the final consumer
The activity of the coordinator requires a variable time two-three months to design/develop the project and has to bear the costs of organization of all necessary activities eg organize -transport samples- write -lay down report- travel -meeting interlocutors- select and lead a team and paying activities lunches and dinners to third parties, soliciting and assisting other partners.
In the case of Bulgaria, I estimate this budget around 2000 euros per month
This phase will be completed with the preparation of the Business Plan
– Consultant/Advice means that the Coordinator act as consultant and advises only the stage of preparation for the entrepreneur and will submit calculate the project budget that will allow him / her to achieve the desired result.
Probably there will also be the need to carry out market research and studies to verify its feasibility. If competent the Coordinator will estimate the cost of such studies / market research otherwise will ask for external companies to request preventive measures. The realization of this research and preparatory to the decision of the business will be subject to an ad hoc contract
The development of a business plan is necessary for the financing of the initiative
It is up to the Coordinator to propose a Budget that provides for the realization of the Business Plan to bring to the attention of banks or possible investors
If it is required to bring important projects to the attention of capital markets (Venture Capital and Equity) it is necessary that the entrepreneur, in addition to the Business Plan, is equipped with certificates of equipment such as:
1 – certificate of economic conformity performed by a recognized Financial Auditor eg Ernst Young etc
2- certificates related to intellectual protection eg patents, rights etc
3- the certificate related to the risk analysis eg DNV GL
4- proof of the possibility of assuring the risk
5- certificate of technical conformity by laboratory-type organisms Universities etc.
Once obtained these certificates will be the same Entrepreneur who will be the coordinator of his project and can bring the business plan to the attention of the markets.
This phase will be followed by the negotiation phase with investors to whom the entrepreneur participates in the board assisted by an expert consultant.
The cost of this process must be borne by the entrepreneur and is estimated to be around 10 thousand euros.
A loan obtained is passed to the construction phase.
The assembly of the project according to the complexity and the necessary investments can take from one to three months and its cost must be included in the Business Plan previously presented.
The general rules for the realization of the business are: determination of the risk, who works earns and for which% the capital invested should be remunerated.