What’s the first step to start your business?

Well the very first step is to have a great business idea!

Then you have all the bureaucratic and legal steps such as choosing the right business structure, the business name, logos, accountants, office and facilities, marketing strategy, etc. But how do you turn the idea into a profitable business? Here are some thoughts.

1 – Start by analysing your own problems

The easiest and most direct way of achieving that a-ha! moment is to come up with a product or service that you want to use yourself. Think about something that you need and cannot find the solution anywhere else. What is your need? And how do you fulfil it? The advantage of creating something for yourself is that you might find out there is a huge market for it as other people are looking for the same solution. You’re passionate about what you do because you’re solving your own difficulties and it works as a simple way of testing the quality of the idea!

2 – Execute your idea

How many times have you heard people saying – I’ve got this idea – but never tried it – they could have been millionaires by now – who knows? More important than having the idea is executing it. You have a problem, find of a solution, test it and see how much it is worth. It might not be successful the first time around, but do it!

3 – Make the time

“I don’t have the time” – make no excuses. Manage your time efficiently, define the priorities for that day and replace those 2 hours on the sofa in front of a TV to work on your project. As soon as you start, you’ll be sure whether this is something serious enough for a business or just something you could do as a hobby. If, after a while, you see it doesn’t work you haven’t lost anything at all – just a few hours of your life.

4 – Define your limitations

If your product is not for everyone that’s ok, as long as it works for some. Your “customer” (even if this is a friend whom your showing your business idea to) may feel insulted because you do not want to add another service or feature to your product/service – and that is ok if you truly believe in your project. Your limitations are set by answering the question: “Why you are doing this?”

5 -Mission possible

Plan your business in a way that you only commit to what you can do, working within your limitations. This doesn’t mean you’re just being safe, you’re being honest about it. You can promise you’ll provide your product/service to the best of your abilities but don’t fall into the trap of promising the best service they’ll ever get. Set the expectations into a realistic level.

6 –What do you REALLY need

If all the bureaucracy seems a lot to take in and is already scaring you, take a second thought: do you need all of that in the first stage? Maybe you can start in a shared space instead of a river view office with ridiculous service charges? Can you reply to your own emails and handle and all the workload for the first 3 months? Can you start straight away instead of in 6-months’ time? At a later stage, you might need a more complex plan but outline what is imperative to have.

 The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese proverb

 

by Joana Miranda, Manager Admin at ICC – International Corporate Creations

INTERnational Expansion by ICC

icc-expansion-intelligence

Working with ICC,  we’ll take you and your team through a logical 5 step process designed to help that you maximise the value of your business in every possible way, while minimising your risk and ensuring control of investment.

ICC’ll find the best way for your company to:

  • Grow sales
  • Reduce costs
  • Increase your business valuation

We’ve successfully conceived, built and managed international operations for ourselves and our clients in many countries. We know how to do that at the lowest cost and at the same time extract the highest value.

Contact us to learn more!

 

© ICC – International Corporate Creations Ltd

5 key reasons why International Expansion drives up M&A interest and valuations

International expansion should be a no-brainer for SMEs that have achieved critical mass in their home market.   But although I’ve never seen it cited as a reason, perhaps it should be a key consideration for those anticipating eventual exit routes via M&A.

Stating the obvious, increased sales has immediate impact on revenues and profits.   Every country tries to encourage its businesses to export more, but most rely on finding agents and distributors to sell their products and services.  Companies that set up their own international subsidiaries deliver far better results.

But there’s a lot more to international expansion than just increasing sales.   For example, it offers insurance against localised recessions and currency volatility.   As a rule, countries that are resilient when others are suffering recession not only maintain their local markets, but their currency increases in value.   US and UK companies that had operations in Australia benefited massively during the 2008-2010 recession – purchasing power was maintained, and the Australian dollar rose dramatically.   As a result, sales volume increases of 10% translated to revenue increases (when expressed in USD or GBP) of over 50%.  Many companies that had expanded internationally survived when they might otherwise have sunk, and some even grew their global revenues and profits.

Even companies that have nothing to export, but a reasonably sized headcount, can expand abroad.  Setting up Shared Service Centres in lower cost economies – typically to process accounts or manage HR or IT – reduces business costs and increases profitability.  Many companies think they are too small, or have unfounded fears of complications, and may dabble in the water by going to Outsourcing.  However, if it’s big enough to outsource, it’s probably big enough to set up one’s own subsidiary to do the job – and doing that will not only give the company proper control, but typically be 30-40% cheaper.

Future expansion of those SSCs to add in more highly skilled R&D operations can then take advantage of skilled labour that can be difficult to recruit and retain in developed countries.  Such staff often prove far more enthusiastic for the company than domestic recruits, and deliver much higher productivity.

But perhaps the biggest reason of all for international expansion is that turning a domestic business into a multi-national, however small, massively increases the valuation of the company for M&A purposes.  EBITDA, the common basis of most valuations, will be higher anyway, as a result of the increased sales and reduced costs that derive from the international operations.  The fact that a business is international as opposed to being in a single country demonstrates the vision and capabilities of the owners.   Further, it also opens up interest from new potential purchasers who may be attracted by exploiting the company as a fast track route to expansion to new markets that they do not already have covered – pushing up multiples of EBITDA.

So why are there so many companies that remain obstinately insular?   Some think the costs will be too high, some doubt they have resources to cope, some still are even scared by different languages and cultures.  All of those beliefs are wrong.  Businesses should grasp the nettle – expansion can be easy.

 

Article originally published in ACQ Magazine by Oliver Dowson, CEO at ICC – International Corporate Creations https://issuu.com/smartwave/docs/gamechangers_five_sixteen/44