An inventor’s idea or innovation can only be shared with the world when proper management of its business side is present. It is one thing to design a solution; implementing it on a larger scale is a whole other ball game. That is why those with entrepreneurship know-how are preferred to take on the formalities of a venture to make sure that the transition goes smoothly.
Startups can be capital intensive. As much as possible, they need to scrimp and save whatever they have to stay afloat. The first thing investors look at is how the proponents of the business idea handle their finances. Carrying the brand of one’s innovation with a formidable knowledge of their company’s numbers is a huge advantage when trying to earn the trust of potential stockholders or lenders.
Furthermore, being aware of key terms and practices in business will keep entrepreneurs from losing ownership and control of their startups. Here are some important things to consider if proponents want to pursue the business end of their idea:
The first thing a proponent should consider is ensuring that they have legal ownership of their idea or innovation. Aside from being credited for their efforts, it also keeps greedy hands from stealing ideas or innovations once the patent is approved. Patents can cost a lot of money, so, if willing, they should find a partner that has the resources to guide them along this path.
Intellectual property can also get tricky, so it is okay to seek counsel regarding their legalities. It is better to be clear and aware now rather than work on the idea or innovation without being sure of the ownership. Reading up on the different kinds of patents can help.
Sole Proprietorship or Partnerships
Once you have settled on the roles and responsibilities of your team members, you need to register your business to make it official. There are different kinds of companies, but startups can have an easier start when they are registered as a sole proprietorship or partnership. These usually have fewer requirements with the state compared to corporations. It should also have lower taxes, possibly helping with the deductibles for the first fiscal year.
The sole proprietorship should belong to whoever came up with the idea or innovation. In cases where partnerships are preferred, choosing upon the various kinds of partnership should be the done before deciding on which individuals will take on certain roles. Some partnerships take on angel investors, while others have a team of founding members as partners.
Whichever form of partnership is decided upon, an agreement must be prepared to ensure that each partner’s duties, benefits, and protocols are clear and sorted in case there is a falling out.
Businesses can thrive without owning a physical office. Buildings make up a massive chunk of the cost of startups, aside from the payroll. Instead, entrepreneurs can use virtual offices to temporarily provide a business address and office space to cater to some of their formal needs. Shared office spaces are more economical for startups. This is a financial decision that investors could consider as a responsible move by the proponents of the venture.
In cases where the business owner wants to grow its number of employees, figuring out a work-from-home setup can greatly reduce the costs of holding physical offices for them. The money saved can be used for more hires that can cater to a larger customer base. Whether the company intends to produce a good or a service, there will always be an administrative team that needs to work on the company’s numbers. These positions can be performed remotely, considering the advances in technology for online collaborations.
Crawl, Walk, Run
Starting small until the business is self-sustainable is more desired than entering the market as a large corporation, only to become bankrupt in a few months. Customer acquisition, brand recognition, and the growth of the company will take a lot of time. It is better not to rush the process and aim for the venture solely funded by retained profit. The benefits will be a lot greater once the payback period is reached.
Working on the management side of a startup can be just as tricky as coming up with the idea itself. There is a need to educate the market on what the company can offer and deal with the formalities of an organization. Therefore, a holistic approach to commerce is the best way to go about innovation and invention.