PBL Task 6 – How to take a business from idea to reality.

1. What are the steps in a starting process of a company?

Determine your offering – have the business idea. According to Ken Sundheim and his article in Forbes magazine, it is important you will think what do you want to do for a career, and start your business based on your passion..

Have a business plan, describe and determine the followings:

– Your expertise (experience, studies)

– Description of the product (for example its features)

– Description of the customers (who are they, their characteristics)

– Your differentiation (what makes you different from the rest)

A recommendation from same article: If you don’t know it yet-

it will come with time and you will learn what aspects of the product or service are important and secondary to the client. Until then, think price and quality.

– Your future plans, how do you plan to expand and how will you do it.

– Marketing and advertisements and how you will do it (start with a website)

– Risk analysis

– Intellectual Property Right if needed

– Estimate funds, profitability and sales

Determine your pricing and have the initial capital

Select a business form

Deal with licensing and registrations.

Learn how to sell

1.1. How to estimate startup cost?

Estimate of one-time costs needed to get your doors open (for example, creating your LLC or acquiring a permit, equipment such as computers, telephones, machinery needed or other fixtures.

Develop an operating budget. Calculate monthly costs and take in to account for example;

Rent
Figure out the cost of raw materials, plus any production costs, or the wholesale prices of products you’ll be selling. Calculate shipping and packaging costs, sales commissions and other costs related to the sale of your product.
Calculate salaries plus benefits you would offer, payroll-related taxes, overtime pay and workers’ compensation.
Marketing.For example, advertising campaigns, the sign above your door and meals or entertainment with clients.
Administrative and operational costs.Keep track of how much you’ll need to pay for insurance (to protect against property damage, business interruption and floods) and office supplies. Don’t forget utilities, a commonly overlooked expense, and other charges, such as phone and Internet service, cleaning and property maintenance.
Professional fees.Add up how much you’ll pay for your attorney, accountant or other advisor or consultant.

It is recommended to have initial capital for first six months or even the first year of the business.

References:

https://prezi.com/hmih9mo11kgu/guide-to-entrepreneurs-in-finland-by-juan-borra/

http://www.forbes.com/sites/kensundheim/2013/05/03/the-7-steps-to-starting-a-business/#1b50f7b054d4

# https://www.sba.gov/starting-business/how-start-business/10-steps-starting-business

http://www.wsj.com/articles/SB125451683482660349

https://www.entrepreneur.com/article/218131

What are the ways of financing a startup company?

Fund your startup yourself. Savings.

Using credit card lines.

Family and friends.

Using the internet to find a crowd of like-minded people, with small amount each, to back your efforts.

Apply to an angel investor

Using your retirement account

Bank loan

8. Solicit venture-capital investors. These are professional investors who invest institutional money in qualified start-ups, usually with a proven business model, ready to scale. They typically look for big opportunities, needing a couple of million dollars or more, with a proven team.

There are many private companies and non-profits that offer small loans to promote entrepreneurship, to individuals who would not normally quality for bank financing. Peer-to-peer lending: This is a process whereby a group of people comes together to lend money to each other. It’s been around many years, in examples like small business groups or ethnic groups supporting similar efforts. In the startup context, look for a successful entrepreneur peer willing to fund similar new ideas.

Vendor financing. If you need tangible products for inventory, many manufacturers and distributors can be convinced to defer your payment until the goods are sold by you. This really means an extension of the normal 30-day payment terms to a period of months or longer, depending on your credit worthiness and extra fees.

References:

http://www.forbes.com/sites/martinzwilling/2013/03/06/10-more-creative-ways-to-finance-your-startup/#af094632f0df

http://www.investopedia.com/articles/personal-finance/021015/top-5-ways-finance-your-business-startup.asp

https://www.entrepreneur.com/article/237926

3. What are the legal actions needed to be done when I start a business?

A basic declaration to the Trade Register must be filed (in either Finnish or Swedish) as the National Board of Patents and Registration specifies. For each type of business, a separate basic declaration form must be used.

– Decide on the form of business. Company form has an effect on how a company is taxed. It is worth taking this into account when choosing a company form.

– Have a company name.

Where: NBPR office and Tax office

Deposit the paid-in share capital in a bank; pay the registration fee and get a receipt.

Open an account for your company providing the necessary forms

Where: bank of private choice

Find out which permits and licenses you will need (depends on business type)

Even though in Finland there is freedom of trade, for certain industries, you do need a licence for the sake of the community, the environment and consumer safety. In other fields, you must notify the authorities of your operations, even though an official licence is not required. For example, companies selling foodstuffs, or a beauty salon, must be carried out and a licence obtained from the municipal health authorities, before such premises can be utilised.

Where: Licensing authorities are municipal or city authorities, police districts, Regional State Administrative Agencies (aluehallintovirasto) and ministries.

Make sure you have the necessary insurance

For the entrepreneur

Pension insurance: Self-employed persons’ pension insurance (YEL-vakuutus) is mandatory, if the self-employed person is between the age of 18 and 67 and receives at least 7 557.18 euros (situation in 2016) of income per year from his or her business
Accident insurance is not mandatory

For the employees