Eran Shay is the managing director of Benefit Business Solutions Ltd, a Gibraltar registered company that specialises in jumpstarting new businesses, through business plan preparation, market surveys, valuations, capital raising and outsourced CFO services. The company also provides local agent representation services to businesses new to Gibraltar.
An entrepreneur is someone who is willing to bear the risk of a business venture where there is a significant chance for making profit. Entrepreneurs are often regarded as the lifeblood of the economy as entrepreneurial spirit is an essential part of a nation’s ability to succeed in an ever changing and increasingly competitive global marketplace. Gibraltar is an ideal place for entrepreneurs and start- up businesses as it offers a business- friendly environment characterised by low bureaucratic obstacles, low taxation, various financial assistance programs, and numerous industry associations. Moreover, Gibraltar’s small size makes it a great place for pilot-testing new products and technologies prior to rolling them out in larger markets; benefiting from an EU-complaint jurisdiction, with a cosmopolitan mix of population, concentrated in a small area. Indeed, some of the world’s best known centres of entrepreneurship and innovation have developed in the smaller nations such as Israel and Singapore, which means Gibraltar is by no way disadvantaged because of its size.
Starting a new business is a bold step. There are many risks and uncertainties but also great opportunities and rewards. In order to avoid some of the pitfalls and obstacles along this path, careful planning is necessary. Below are the Top Ten Tips for the new entrepreneur:
1. Don’t be afraid to talk about your idea. If you keep your idea a secret and don’t consult with anyone, you will find it very difficult to progress your idea. Listening to various opinions will help in validating your idea as well as giving you further “food for thought”.
2. Research the market. Make sure you thoroughly study and familiarise yourself with your target market, whether it is a new territory, a niche industry sector or a specific population segment. Conduct market surveys, use focus groups and read relevant literature.
3. Know your competition. Familiarise yourself with both direct and indirect competitors in the marketplace. Understand the strengths of their products/services and their customer base to be able to identify your core competitive advantage and position yourself at the leading edge of the competition.
4. Consult with professional service providers (lawyers, accountants, tax advisors etc). While their advice may be costly, it may often give you the best value for money, as well the ability to tap to their network of contacts and learn from their experience. It will also help you structure your business in the most effective way, thereby saving you greatly once your business matures.
5. Prepare a business plan. While you are most likely to be asked for a business plan at one stage or another (by the bank, investors, regulator, or others), preparing a business plan is your opportunity to set out for yourself the objectives and goals for your business, as well as the process by which you will execute your plan and the financial forecast you expect to attain. Such business plan should be reviewed and updated as your business progress. Lacking a business plan is one of the main factors why some start-up fail.
6. Don’t accept just any investor. Raising funds for your new business may be perhaps one of the biggest challenges you may face, but don’t be tempted to accept just anyone’s money. Funds from family and friends may be easier to raise but in case of a business failure may cost you your most precious relationships. By taking “stupid money” from unprofessional individuals, you may find yourself stuck with partners who have no added value to your business, yet have the power to control your business decisions.
7. Protect your IP. If your business is based on some Intellectual Property, make sure you take the relevant actions to protect these intellectual assets as early as possible, such as applying for patents, registering trademarks and copyrights, and look after your key employees.
8. Hire only the best. While employees are often the biggest business cost, they are also its biggest asset. No matter how good your product may be, people do business with people and it is this human interaction that will determine the success of your business. Hence, don’t compromise on the quality of your employees and don’t be afraid to let go of anyone who doesn’t measure up to your expectations.
9. Try to obtain free money. There are plenty of grants, sponsorships, interest-free loans, tax breaks and other aid funds earmarked for new businesses. Make sure you explore these opportunities and learn how to obtain them. It may often be easier than you think…
10. Use social media to get exposure. In the internet era you don’t necessarily need to spend huge amounts on expensive advertising. Word of mouth and viral marketing over social media sites have become a powerful, yet cost effective way to potentially reach millions of customers.
Start-ups are born out of passion and are led by people who want to address a distinct problem. Individually, start-ups are drops in the nation’s economic bucket, but in aggregate, these innovators are actually responsible for a vast majority of economic growth and their contribution should never be underestimated.