The Entrepreneur Thread

[Chevron]

I know there are many here on MyBB.

I've been considering starting my own business for a while now and wanna get off my ass and just do it.

So a few questions.

For those that needed investment first to start their business how did you go about it?

let's you wanted to open a coffee shop, you obviously need investment to et it going. You can't just do it from home.

When making presentations to get investors interested, how do you present your idea, while making sure they don't steal it for themselves? let's say you have an idea for a unique take on the coffee shop that's popular overseas, but not yet in SA?

What type of info should you include in such presentations? the concept of course. Estimated costs as well? Equipment, staff, rent everything? margins? profitability?

Let's say you're lucky enough to get someone willing to invest, how do you make sure you still control the concept, while still giving the investor enough control?

Any comments at all are welcome.

 

[IzZzy]

When making presentations to get investors interested, how do you present your idea, while making sure they don't steal it for themselves? let's say you have an idea for a unique take on the coffee shop that's popular overseas, but not yet in SA?

They sign a confidentiality and non-disclosure agreement.

Let's say you're lucky enough to get someone willing to invest, how do you make sure you still control the concept, while still giving the investor enough control?

Depends on what rights they want and what you are comfortable giving away. Also depends on the amount of seed capital they will invest - large capital means a large chunk of the business, with a large portion of the rights.

There's board control, and shareholder control - if you want to control the direction etc of the concept, then board control is what you would guard jealously whereas the seed investor will not want to take an active role, and would retain shareholder control.

 

[Sonic2k]

You have a PM

 

[akescpt]

ive wanted to do something IT-y for ages. wanted to open a shop originally. didn't and now someone else did. I are idiot.

 

[Wall]

First step is to make sure that your product / service has a market. A market that is large enough to sustain a business. Keep projections as realistic as possible.

 

[Falco]

First off. I'd be weary of private investors, they become partners. Partners = problems (not always, but...)

Depending on the type of business, initial and ongoing expenses, profitability estimations etc. my 2c advice would be to draw up a business plan and present it to your bank. Register a PTY when you have all your ducks in a row unless you wanna take the risk of trading in your personal capacity

 

[Falco]

Any profit estimations should be done conservative
Any expense estimations should be at least 20% more than anticipated

 

[MKFrost]

Just my two cents....

When you work on your plan make sure you spend some serious time on your cash flow projections and be realistic about it. This is vital for both you and any potential investor. For you as it will show you whether it can be done and if so what needs to be done in order to make it financially during the startup years. For the investor as its a very good 'indicator' in regards to the viability of the business and also gives them a good idea of where their investment [seed capital] will be going.

I'm not sure about the percentage but believe that a very large portion of business go tits up due to insufficient cash flow leading to increased borrowing etc...etc....

 

[P00HB33R]

I know it seems hard, and somewhat impossible, but try to save up money or try to get the start up capital on your own. Investors (partners) usually ends up in a fight over power.

Where there is a will, there is a way.

 

[pboy]

only gonna find indians and greek dudes on this post!
LOL!

 

[Stefanmuller]

I would approach a bank first with a business plan. They will tell you what the requirements are and then get an accountant to help you with projections.

 

[S1lv3r H4wK]

+1 Chev, I've also been toying with the idea. Online business for me starting small then expanding as I go. IT related as this is what would suit my skills. Custom Performance systems or specialized components? What would the advice be? Is there market share to gain?

 

[seanyp00h]

You have a PM

Why not share with us all?

 

[Sonic2k]

Why not share with us all?

will do a write-up, later, when I get a gap, the OW fiasco is keeping me busy today, sjoe!

 

[seanyp00h]

will do a write-up, later, when I get a gap, the OW fiasco is keeping me busy today, sjoe!

 

[Chevron]

Thanks for the valuable feedback here.

I will be turning my presentation into more of a business plan with costs. With projections though i will have to see if I can speak to some of my friends family that own their own coffee shops and get their input.

I manged to find a generic NDA as well to add. Hopefully will keep my idea from being stolen.

please contunue though.

 

[Sonic2k]

On the subject of NDAs
I have several of those with the people whom I do work for. It just makes such good business sense. I love NDAs!
If you are going to get an investor, it makes sense to get someone who is not technically inclined to the extent that he/she will fight for the control of the IP. Preferably someone who is quite financially savvy, but also you need to have solid agreements in place to prevent being screwed over.

If only I could show you the cool things I am working on, I promise you, every person on this thread will PM me for one, but, we need to be patient and do this properly

 

[deweyzeph]

On the subject of NDAs
I have several of those with the people whom I do work for. It just makes such good business sense. I love NDAs!
If you are going to get an investor, it makes sense to get someone who is not technically inclined to the extent that he/she will fight for the control of the IP. Preferably someone who is quite financially savvy, but also you need to have solid agreements in place to prevent being screwed over.

If only I could show you the cool things I am working on, I promise you, every person on this thread will PM me for one, but, we need to be patient and do this properly

NDAs are a waste of time and many investors will refuse to sign them anyway. You can't stop someone stealing your idea. Anyone can have ideas, it's implementing them that requires all the effort.

 

[Sonic2k]

NDAs are a waste of time and many investors will refuse to sign them anyway. You can't stop someone stealing your idea. Anyone can have ideas, it's implementing them that requires all the effort.

I disagree with your view about NDAs. What I meant to say was, an NDA is essential for those who work on the project, including suppliers, for a good reason. Anyone can have ideas, but I have the wherewithall to make it happen, and that's where the effort comes in. I am no stranger to product development either. You need money for that, an amount of R2mil is not uncommon to produce a first run, not counting development/engineering costs.

 

[deweyzeph]

I disagree with your view about NDAs. What I meant to say was, an NDA is essential for those who work on the project, including suppliers, for a good reason. Anyone can have ideas, but I have the wherewithall to make it happen, and that's where the effort comes in. I am no stranger to product development either. You need money for that, an amount of R2mil is not uncommon to produce a first run, not counting development/engineering costs.

The problem with NDAs, especially in South Africa, is that people generally use pro-forma ones they've downloaded off the internet. The NDAs end up being so general and so wide-ranging so as to be completely unenforceable. Investors won't sign them because they hear thousands of pitches every month, often from people with the same ideas as other people. Investors can't and won't be bound to a legally binding contract like that. Imagine if you had to sign thousands of NDAs and try to keep track of which ones cover which ideas. You open yourself up to a lot of litigation. You can't keep track, and therefore investors don't sign NDAs.

Good luck trying to get a supplier to sign an NDA too. Web designers, developers and other types of creative people often refuse to sign them as well because of legal ramifications.

Of course, a confidentially agreement that compels someone to not steal your client list, for example, is a different matter. But don't expect someone to sign an wide-ranging NDA just to listen to your idea. I promise you, your idea is not that great and there almost certainly are a lot of other people with the same idea.