Aeona COVID Safety Measures

No touch hand sanitisers dispensers placed at elevators on each floor, all boardrooms, common areas and bathrooms.  This will ensure that all members are able to sanitise before, during and after interactions with clients, colleagues and other members.

Disinfectant wipes are provided in all common areas for wiping down equipment during office use.  Wipes are shown to kill bacteria on surfaces exposed to constant uses.  Members are encouraged to use wipes before starting work and when finished for the day to maintain bacteria free surfaces.

Hand washing and General Hygiene signage placed in all common areas and bathrooms.  Placement of signs in high throughput areas ensures that all members and guests are encouraged and reminded to practice good hygiene throughout the work day.

Free move policy and restriction to 4sqm p/person.  Aeona coworking space already adheres to a density of greater than 4sqm p/person.  Any members that would like to take extra precautions are permitted to choose any available desks at a distance sufficient for peace of mind.

If you have any additional requirements, please get in touch directly at info@aeona.com.au

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No matter how big or small your business is, whether you do your own bookkeeping or you have an entire accounting team, there are three reports that all entrepreneurs must know like the back of their hands.

*Most of these reports can be found in the reporting menu of your accounting software

We cover the main go-to reports below:

Balance Sheet

Of the big three accounting reports, the balance sheet is the only one that shows the financial health of a company at a given moment. Instead of listing your business’s income and expenses like the P&L does, the balance sheet essentially provides a snapshot for assets, liabilities & equity held by the company.

Some of the terms you’ll come across are explained below.

Profit & Loss

This report shows how much revenue & expenses a company earned over a period of time.

The P&L is the best view into your bottom line, or net income, which is why it’s typically used to show business lenders and investors whether your company has made or lost money during a given period.

Your business’ net profit is also what will be used to determine its taxable income each year.

Cashflow Statement

Your cashflow statement shows the results of your business cash income and outgoings over a period of time. The cash flow statement combines the P&L and also takes any non-cash transactions into account from operations, investing or financing activities to give you a picture of exactly what happened to company’s cash during that period.

So, if a company gets $1M in capital, but their P&L shows a net income loss of $50k during the same period, their cash flow statement will show a $950k net increase in cash for that period.

Because your cash-flow statement provides a more comprehensive view of how your business operates with its cash, its more often a report of choice by an advisory board.

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To get your business in top shape, we recommend reviewing these reports on at least a monthly basis and aligning the results with your financial strategy.

The post 3 Most Important Financial Reports for Founders appeared first on Aeona - Resource for Entrepreneurs & Startups.

Imagine you wanted to build Instagram, an app with one billion active monthly users and technically complex functionality. How much might it cost to build an app like Instagram? Well, if you wanted us to make an accurate estimation, we’d send you a document with six zeros in it. A high-load application like Instagram requires a huge budget, as you read through this article you will find out exactly why!

Luckily, not all apps out there cost that much. There are other types of projects that require less money to develop. For example, a few months ago we built Creator Connect, an app that looks like Instagram but targets artists and those interested in buying art. The app is a minimum viable product or MVP. By this, we mean that the app contains just enough basic features to keep users happy and to provide value. Creator Connect allows users to register, upload new photos, view artworks in the news feed, write comments, send messages, and buy and sell art.

From a technical standpoint, it uses Amazon Web Services for the backend, GraphQL for the API, and Amazon S3 as data storage.

We spent eight weeks building this project. This iOS app development cost was $60,000.

A prototype for Lux Group, one of Australia’s leading e-commerce groups, is yet another mobile app development project where the cost differed greatly from the app prices above. The prototype is a redesign of Cudo, an app that sells the best offers for dining, entertainment, pampering, and adventure experiences in every major Australian city.

We spent two weeks building this prototype. In addition to the functionality Cudo offers, our prototype also includes some new features such as one-click purchasing, personal recommendations, and a simplified UI flow. We used React Native to develop this prototype for both the iOS and Android platforms. It has no backend, and all the data is mocked up. The application includes UI animations and all the screens required for the purchasing process. So, how much does it cost to build an app prototype? The one we created for Lux Group cost around $4,500.

The app development price of the three projects we’ve described above differs greatly. Why is there such a difference? And how much does it cost to build an app in Australia in 2019?

Now, you might say that the price differs because there are different features in all those apps. And that initially sounds pretty reasonable.

But in fact, the price of an app has less to do with features and depends much more on which phase in the product development lifecycle the app is in, and what purpose you build it for. For example, you might need a prototype to make your idea tangible so your investors could understand what you want to build. Or, if you decide to create an MVP, you might need to test your idea on the market first, and then work further on the development of a complete product. The three apps we looked at above are examples of three phases in the app development lifecycle.

Mobile app development cost depends on which phase your product is currently in. To deliver it to market in the fastest and cheapest manner possible, you need to iterate. Now that’s set out, let’s explore the phases in the product development lifecycle and see how much you should expect to pay for an app at each phase.

How Much Does It Cost to Build a Mobile App? 4 Types of App Development Projects

Below is our version of an app cost calculator. It tells you the price of an app from a prototype, to an MVP, to a full-featured product. What do you need to make an app in terms of functionality, distribution, technology, and a development team? Let’s find out.

The Cost of an App Prototype: $1,000 – $5,000

This is how much it might cost to build an early app version. Let’s call this version a prototype. For $1,000 to $5,000 you can buy around 20 to 100 app-developer hours, assuming your developer charges $50 per hour. What you can implement within this time? Not so much really, but this might be exactly what you need to get the product out the door.

Functionality

You should not expect a full-featured product within this budget. The main purpose of a prototype is to materialise your idea. A prototype is something you can open on your phone and show to your investors.

Usually, a prototype does not have enough functionality to deliver to end users. (Unless you use Firebase or AppSync to move the data from the database to the app). But it’s an amazing way to pitch your project to investors or start testing your idea in a closed focus group.

With a prototype, you can easily demonstrate your idea and significantly improve your chances of getting the needed funds. As you know, a picture is worth a thousand words.

Distribution

A prototype is usually distributed in a closed beta group whereby special invitations to install the app are delivered.

There is a TestFlight beta testing option for iOS. It allows you to add up to 1,000 beta testers and send them the app bypassing the App Store. The app should still pass through the review process, but this process is not as strict and allows you to distribute unfinished, prototype apps.

Google Play Store offers more ways to distribute your prototype. Using Google’s Internal tests you can quickly send the app to a specific group of people. Closed test release allows you to reach a large group of testers and the Open test release makes it possible to distribute the test app within the Play store itself.

Technology

Cross-platform frameworks are an amazing way to build a prototype. We love React Native and are now looking to use Flutter as well. But you can choose whichever technology your developer has the most experience with; there is no time for learning new tools and the budget is extremely limited. As a result, efficiency is king.

React Native is an amazing way to prototype mobile applications because it has a huge number of components and libraries. Building UI in React Native is fast and easy. And the prototype can be distributed to both iOS and Android platforms.

If you still need some backend and a user-identity system (for example for registration and login), a good idea is to use a ready-to-go SaaS service, such as firebase/firestore/firebase auth or AppSync/DynamoDB/Cognito/Amplify. These services allow you to start and run a basic backend within just a couple of hours.

Developer Requirements

Different projects require different skill sets.

For example, Facebook has one of the best app development teams on the planet. No doubt about it, this team is able to implement your project. But is it going to be time and cost-efficient? Probably not, because this team is focused on delivering high-performing bug-free apps that can withstand huge amounts of traffic, and they will spend lots of time and money to do that.

It’s like commuting to work by Uber with Lewis Hamilton, the F1 champion, as a driver. Definitely, he can drive you there, but this ride will cost you much more than a ride with a regular driver. And Lewis won’t get you to work any faster, even though he is the fastest driver on the planet because he has to obey the same road rules as everybody else. The same speed limits and traffic lights will apply. In fact, it’s more likely that a regular Uber driver will get you to work faster because he has more experience driving in a busy city and knows the shortcuts.

For an app project at the prototype stage, the most important criteria are rate and efficiency. You might feel that using the cheapest developer is a good idea, but in general, the reverse is true.

If you read the IT management iconic bestseller, “The Mythical Man-Month”, by Frederick Phillips Brooks, you will find that the productivity of an outstanding developer sits around 20x times higher than the productivity of an average developer.

Obviously, not all expensive developers are good and not all cheap developers are bad. But the rule “What you pay for is what you get” works pretty well in the app development industry. Don’t be afraid to hire a developer who costs double what another developer does if you know he is good. As a result, you might get 20 times more output for the same amount of time and money.

The Cost of an MVP: $15,000 – $75,000

This is the average cost of an app which is at the minimum viable product (MVP) stage. There are lots of definitions of an MVP. This term is a concept from Lean Startup, a methodology for developing businesses and products. Eric Ries, the author of Lean Startup defined an MVP as the version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.

Functionality

An MVP is a functional product. It should be able to solve a problem for the end user and focus on a minimal number of core app functions. For example, if you are creating a marketplace, it should provide payments and related processes. If you are making a social app, it should allow users to connect with each other.

As a product owner, it’s your responsibility to identify the core features of an MVP. It’s not easy to identify this feature set because everything seems important. But try to ask yourself if your application could exist without this feature or that feature, and you will quickly find your core functionality.

For example, could Instagram exist without stories, comments, likes, shares, and direct messages? Absolutely. What about image filters? Could Instagram exist without them? Obviously yes, but in this case, it wouldn’t be Instagram. Filters are Instagram’s killer feature and something that drew the attention of users from day one.

MVPs are hard to implement because of the limited budget, time is a critical consideration as well. But the hardest part of all is excluding features from the product which are not critical for an MVP.

Creating an MVP involves the same areas as regular app development does: frontend, mobile apps, backend, quality assurance, analytics, and support. But everything should be reduced as much as possible.

Check out a real-life success story about this process in our article 10 steps to create MVP in 6 weeks.

Distribution

The distribution of an MVP very much depends on the type of the project.

If you are creating a MedTech project, for example, it’s a good idea to have the MVP released in a closed group of testers. The cost of mistakes in this area is very high, so it’s better to use a safer distribution strategy.

If you are creating a mass-market product like Instagram, the best strategy is to make a public release. Just keep in mind that the app should follow the App Store’s review guidelines. Check if there are no “coming soon”, “beta” or “not implemented yet” parts in your app build.

Technology

There are two main strategies for an MVP, let’s take a look at those now.

Strategy one: Validate the idea

If you choose this strategy, you need to get a sufficient number of users to prove that the idea works. You then get a good investment to allow you to continue building the product further.

With this strategy, you should remember that an MVP is not scalable. And you should be ready to create a scalable, real product as your next step. Why not create a scalable product from day one?

Because creating a scalable MVP requires around 30 to 100 per cent extra time and resources during the initial build. Usually, MVPs are financially supported by personal funds, and most people simply don’t have enough money to create a scalable product from scratch.

Don’t worry, you have to focus on your goals for this MVP stage. If your product doesn’t get the “product/market fit” you don’t need this scalability. If your idea gets a product/market fit (and I really hope it does), you will need some time to reimplement the MVP functions in the release app to make your product scalable. And this time you will create a better app because you already have knowledge of your market.

Technology wise, the best choice for strategy one is a cross-platform framework like React Native or Flutter. Don’t try to be perfect with your cross-platform MVP because if you are trying to implement custom components with React Native or complex animations, you will spend a huge amount of time. Just use the features available out of the box and try to avoid building custom elements. Focus on how the MVP can solve the core problem for the end user, but don’t pixel perfect the implementation of the design.

For the backend you can also use serverless services and ready-to-go SaaS platforms like firebase/firestore/firebase auth or AppSync/DynamoDB/Cognito/Amplify. You can extend the possibilities of these platforms with custom business logic using serverless functions or AWS lambdas.

Strategy two: Move fast

Sometimes, you don’t need to validate the idea. You already know that your product will work. For example, there are many local entrepreneurs who used Uber’s business model to created a mobile app that allows people to simply tap their smartphone and have a cab arrive at their location in the minimum possible time.

If you want to develop a product with an idea that has already been tried and tested, there is a high chance that many other entrepreneurs are thinking along the same lines. For this reason, you have to be the fastest. You don’t have the time to rebuild your MVP and make it into a scalable, full-featured app. In this situation, every day counts, so the best strategy is to focus on a building a scalable MVP from day one.

This strategy requires you to choose the most sustainable, flexible and extendable technologies so you can easily scale the product down the road.

Native technologies are a good option for such mobile apps. You will also need a full-featured backend with staging and production environments. Quality assurance cycles with manual and automated tests should be involved as well.

With all these requirements, strategy two can greatly increase the cost of app development. But there are ways to avoid that. Limit MVP functions, or go with an iOS platform only and postpone Android and web apps for the later stages.

Developer Requirements

An MVP is an extremely challenging project because of the strict time and financial constraints. Quite often it’s too complex for one developer and requires a whole team consisting of three, or even nine, specialists. In which case, the app development cost depends on the productivity of the entire team, not a single specialist.

In a productive team, everybody is on the same page. They share common goals, follow the same processes, are aware of all technologies used and communicate daily with each other. One slow developer can be a bottleneck and slow the whole team down. And poor communication can kill the project from the outset.

When you try to choose the right team, always refer to their previous experience working on MVP projects. Figure out how accurate they were with deadlines, how experienced they are with technologies and how well they communicated during project implementations.

An outstanding team can be 100 times more productive than a bad team, even if the bad team has good developers in it.

The Cost of a Full-Featured Mobile Application: $150,000 – $400,000

This is the amount of money usually needed to build a full-featured app. This product could be the next step after an MVP. Or it can be an app for an existing business. For example, we built a project like this for a transportation company who wanted to improve their logistics processes and driver experience using modern technologies. You can check out our Atlas case study to learn more about how we developed it.

The $150,000 to $400,000 budget isn’t sufficient enough though for some technically challenging projects that involve R&D, AI or crypto.

Functionality

A full-featured app doesn’t usually have strict implementation constraints as far as functionality is concerned. These products offer a full feature set for the end users. Sometimes they can even have some A/B testing.

To build this type of mobile app, you need to get analytics, crashlytics, and CI processes involved. You need to have a solid backend with monitoring and an automatic alert system in case of violations. Your backend also needs the ability to automatically scale with increasing load.

You also need to write automated tests so that the system can validate each new commit, and let the developer know about issues immediately. The whole system should be reliable and secure.

Usually, this type of app works on all platforms including iOS, Android and the web.

Distribution

The app should be distributed through the main official app stores: Apple App Store, Google Play Market, Amazon App Store and other region-specific stores.

The project should have a beta version release system to test the staging implementation before the final release. You can do this with TestFlight and Beta Play store.

Technology

There are no strict limitations for a tech stack. Obviously, you should not try to reinvent the wheel. But try to develop a custom backend with specific business logic at the core. Keep in mind that your app should be able to extend and scale in other geographic regions.

The best choice for this kind of project is native apps. Cross-platform solutions may sound good, but when you dive into the real developer experience, you will quickly understand how hard it is to maintain a cross-platform application when its complexity starts growing. A good example is this amazing experiment undertaken by the AirBnB dev team.

Developer requirements

With a full-featured product, you will normally have a bigger user base than with an MVP. These people expect the app to work perfectly. The risk of releasing an unstable product and losing customers as a result, is much higher than with an MVP, which is never ideal. Therefore, stability is critical with full-featured apps.

Your app should be ready to scale and handle high loads when it becomes more popular. Scalability is critical as well. Using stress-tests you can stimulate high user traffic to find any performance bottlenecks.

The most important requirement for your app developers at this stage is to have a strong team leader. His or her job is to create proper infrastructure and architecture and guide the team to follow the development plan. With an experienced team of developers who can implement the architecture that the team leader planned, your project can be completed within the estimated time frame and budget.

The Cost of a Technically Challenging Mobile Solution: $500,000+

There are three types of projects that could be included in this category. These are:

1. Complex apps. These projects often require solutions for different platforms. A good example is the Tayble app that we created recently. It’s an application that lets users find local restaurants then order and pay for those orders via their smartphones. This project consists of an iOS app, an Android app, a POS Android app, and a POS system. To pull this off we integrated the app with a number of POS systems and a thermal printer. We built a real-time messaging system, an admin management portal with three levels of access, and a real-time reporting system. We also created a three-step payment-flow with pre-approvement, loyalty system, discounts and geofencing. We added direct marketing features, and much much more.

2. High load apps. A project that has 1000 active users per day and a project that has 1000 active users per second are completely different projects, even if they look identical. To create a product that can withstand a heavy traffic load, you need a team of highly skilled engineers, a good testing process, a recovery system and lots of extra work. An amazing example of that is Netflix Simian Army, a full-featured app that Netflix developed specifically for the testing purposes. The main idea of this app is to break  Netflix’s production system with bots. Sounds weird, right? But it works extremely well. The best way to avoid failure is to fail constantly.

3. R&D, AI, Crypto or other technically challenging projects. When you are trying to create something never done before, get ready to spend a lot of money. Even if you are reusing current technologies, creating something new is an unpredictable process. It’s more about science, not programming. We have an amazing example of this type of project. We created a menu recognition system for Tayble that recognises food category, price, meal description and even modifiers. All restaurants have different menus, and restaurant marketers try to be creative with the ways they structure menus. Creative menus may sell a lot of meals, but they are very confusing for machines. To build a menu recognition system we needed to build a self-training, machine-learning algorithm with semantic analysis, structure analysis, and human guidance. To create this system we went through 15 failed iterations and finally reached a successful solution.

Functionality

An app that costs $500,000 or more should have all the functionality you need. You can expect full test sets, Continuous Integration, test automation, monitoring systems, admin portals, management systems, reporting, A/B testing, some technically dense custom solutions that involve artificial intelligence, crypto, R&D processes, and even more.

Distribution

The released app should be distributed through the main app stores. Usually, a complex app has a staging release for testing new features. You can also expect to have releases for closed testing of experimental features. A good idea is to have alpha and beta release cycles for big projects, but this requires a dedicated QA team.

If you are creating a corporate app for internal use, you can apply for an enterprise development program from Apple or Google. With this program, you can distribute your apps bypassing Apple and Google’s infrastructure (App Store, Testflight, Play Store).

With Apple Configurator or other MDM tools you can even directly install the app on your corporate devices with no additional steps required from users.

Technology

The best choice for apps within this category is native app development. It allows you to use the most recent platform features without depending on third-party systems like cross-platform tools, and increase the overall stability of your product. The tools that increase stability and performance are a good idea as well. These include A/B testing, user analytics, crashlytics, monitoring, review system, customer support, funnel engagement, internal marketing and targeting, and much more.

Your backend should be focused on breakage resistance and stability. No software is 100 per cent bug-free and even the most expensive piece of hardware can break. Therefore, you need to build the backend in such a way that even if some parts stop working, the whole system will continue to work.

There are hundreds of tools for that. We prefer to use Golang as the main language for high-load systems, basically because it is created for high performance and scalability. Compared to NodeJS, Ruby on Rails, and PHP, Golang is compiled to native code for your server.

Developer Requirements

This type of project requires a team experienced in your specific area. Specification matters a lot if we are talking about R&D projects. For example, at MadAppGang, we have a dedicated mathematics engineer to solve specific tasks in artificial intelligence and cryptography.

One more critical requirement is team sustainability. It’s extremely hard to find a team that is able to create a complex project from scratch. But it’s even harder to find a team that can continue to improve upon an existing project.

Set Realistic Expectations About the Cost of Mobile App Development

This app development cost breakdown is just an overall view. Each project is unique and there is no general way to describe all the possible scenarios and budget ranges. But I hope this article helps you to understand what you can expect from the budget you have and what the estimations you are getting from app development companies actually mean.

I hope you don’t believe in the miracle stories that abound about John Average Smith creating an app for $1,000 in one month with a magical developer from a far away and poor land. More often than not, these are just fairy tales. Personally, I believe there’s always room for a miracle. But I don’t think it’s a good idea to rely on that.

If you are not a technical person, you probably find app development process overwhelming – and they often are. But you can hire a technical team lead to help you deal with the complexities. 

The post How Much Does It Cost to Build an App in 2019? appeared first on Aeona - Resource for Entrepreneurs & Startups.

Now, I’ve given some enticing adjectives about our hometown’s bustling non-corporate scene, but let’s talk some nuts ‘n bolts.

Australia is home to some unbelievable financial incentives and government grants.

Poke your head out the window and you will find a company that could be eligible for government funding.

A fascinating paradox about government incentives is that, on the one side of the coin it is such an enticing source of funding, but on the other side most eligible companies either aren’t aware it exists or don’t know how to access it.

Ask yourself these 3 basic questions:

1. Is your company doing something different to the competition (I sure hope so otherwise why are customers using you)?
2. Is your company producing something (that differentiates you from the competition)?
3. Are you selling to foreign markets (exporting)?

If you have answered yes to any of those, then someone should be poking their head into your window and telling you to investigate 2 main government incentives:

• The R&D Tax Incentive
• The Export Market Development Grant (EMDG)

The above 2 could offer a company up to 50% back on their eligible spend.

R&D Tax Incentive

Benefit: up to 43.5% cash back on eligible spend (in some instances the benefit is a tax saving)

There are 3 basic principles to the R&D Tax Incentive

1. New Knowledge
2. Experimentation
3. Uncertainty

These three principles all flow into each other.

Here are some case studies to explain them:

1. New knowledge begins by locating a gap in the market.

A software company (Airport Transport Pty Ltd) noticed that there wasn’t one web location to see all land travel options. They did an analysis of Webjet and saw that there wasn’t a similar land vehicle aggregation website. Further research into the market was and there seemed to be no one trying to roll out their idea in the manner they had in mind.

A gas heater manufacturer (Heat Us Pty Ltd) wanted to bring better performing gas heaters to the market. They wanted their heaters to emit lower gas emissions and to be more aesthetically pleasing. Further research into the market was and there seemed to be no one trying to roll out their idea in the manner they had in mind.

2. Experimentation

Airport Transport Pty Ltd hired some contractor developers to prove the MVP or prototype. Many lessons were learned along the way. Once they felt they could make their product happen they started hiring internal developers.

Heat Us Pty Ltd started tinkering and developing. There were many iterations of the product and learnings along the way. The development process is an ongoing process.

3. Uncertainty

Both Airport Transport Pty Ltd and Heat Us Pty Ltd weren’t certain at the onset that these new developments were going to succeed. They did, however, think that each would be a success, but the final products were arrived at through much experimentation.

Now we come full circle, the final products are what fill that initial gap in the market and could become commercial.

Export Market Development Grant

Benefit: up to 50% cash back on eligible expenditure

There are 3 basic principles to the EMDG

• Australian product,
• Revenue belongs to Australia
• Marketing expenses must be recognised in Australia.

1. Australian Product

What is being made by the company or the service being provided needs to be made or performed in Australia.

If some of the product is made abroad, e.g. clothing made in China, it could still be an Australian product if the main team are based in Australia.

2. Revenue belongs to Australia

The revenue from items sold abroad need to flow back Australian entity. For the first 2 years of the grant no revenue is required at all.

3. Marketing expenditure being recognised in Australia

The expenditure on marketing activities taken on abroad need to flow back to the Australian entity.

Some of these expenses could be: Google and Facebook ads, photo shoots, overseas sales people, Australian consultants targeting over seas sales, overseas marketing trips and flights, trade fairs and conferences and free samples.

Your business could be on the cusp of further growth and you just may be able to attain the cash to take off!

The post The best government grants for start-ups & businesses appeared first on Aeona - Resource for Entrepreneurs & Startups.

The simple answer is that a good CFO will help your business to get better leverage with its money. The question is how so?

• Better strategically placed funds to carry out long term plays.
• Better procedures and systems set in place – boosting financial accountability.
• Better preparations & polish in financial negotiations.
• A leaner and meaner approach to expenditure.

All of these are putting a great multiplier on your business!

As a VCFO to a number of high growth ventures, I’m a bit of an evangelist for having good financial IQ – particularly having seen many a business thrive based on a good financial strategy.

So let’s deep dive into some of the ways that a CFO can save you heaps of coin.

A long-term approach to cash outflows

Everybody is great at focusing on making money – it’s only after that part when most people tend to start slipping up.

Ever heard of an ‘impulse buy?’ Anyone who has walked into JB HIFI knows this story well. With plenty of attractive goods practically jumping off the shelves for you to buy, it can be difficult to maintain savings and keep track of the more important buys, such as a new house, car or trip overseas.

The same principle applies in business, where a seemingly endless train of B2B sales and slick online marketing is used relentlessly to sell you extra goods or services. Whilst the value propositions seem attractive enough, most of it you just don’t need in the long term.

I’ve come across several start-ups where thousands have been lost on unfocused marketing or expansion efforts before a product has even been road-tested yet.

This is where a seasoned chief financial officer (CFO) can step into the ring and dramatically lift your game. They can help you to think strategically around where the limited funds in your bank account are placed and protect your cashflow.

Plans & systems for financial accountability

Based on your overall vision, you and your CFO can craft a budget forecast, which take into account the business drivers, revenue as well as the expense departments on which your business is based.

My personal preference is to have budgets aligned against departments (such as sales, marketing, HR and product) so that your departmental managers (i.e. head of sales, head of product) know how much they can spend, all while retaining accountability for their spending.

The right CFO will challenge loose purchase decisions and set up policies to keep your managements’ purchase decisions in check. This is particularly true where there are multiple founders and managers involved, each with their own company debit or credit cards at hand. A well-worded expense reimbursement policy overseen by the CFO gives everybody a good understanding of the boundaries in play around the company’s cashflow.

The same is true of setting accountability for income coming through, where sales managers, CEOs and CFOs can work together to set sales targets and implement incentives for good performance in this area.

CFO = your financial wing person, right?

Negotiating (and what’s best for your bottom line)

Aside from overseeing the day-to-day finance operations, CFOs help you to maximise your performance during major negotiations. Think investors, leases, cap tables, supplier and customer contracts.

If walking into a negotiation, particularly involving OPM (other people’s money), you’ll need to be prepared to outline your financial storyline in a compelling and informative, but sensible way. CFOs are perfect for this purpose and can help present your financial performance fit to purpose with the right financials, graphs and reports.

With some financial modelling ability, the CFO can also chart the way forwards with some assumptions around business drivers, investments and cashflow requirements.

What if potential investors put in demands for additional growth requirements? No problems, the CFO can adjust the financial model and help ensure that the new requirements are financially viable.

Getting thrown some curly questions around your business financial performance across EBITDA? Month on month revenue growth? Total write-down on stock? With the CFO often being most in tune with the figures, they are generally the person to consult where finances are onboard. 

In summary

If your business or venture is going places, then you’re going to require someone who specialised in looking after your company’s financial welfare.

As a virtual CFO, I’m always looking ahead to gauge potential outcomes and recommending financial strategies to best benefit your business in the long-term.

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People’s futures were defined most often by their immediate capabilities and it worked, it worked for a long time.  Perhaps purely because people didn’t know better, perhaps because people simply didn’t have the power to do much else, or perhaps because quite simply, people didn’t know what lay beyond their local town centre and in the world that surrounded them.  Their information was obtained from their community, local officials or newspapers and surely their confidence lay in their tradition which likely encouraged what they were already doing.

Transition to now and oh how things are different.  The advent of technology has made all things possible, all things accessible, all things attainable – or so it seems.  Phones, TV’s, The Internet and Social Media have brought to our attention every single thing conceivably created by our minds.  Similarly, the purely insurmountable wealth of information at our fingertips has cast doubt on everything we have ever been taught to believe, giving us the confidence in our own capabilities to know better how to achieve everything.

Social media and media in general has infiltrated our minds with the “achievements” of others, leading many to become dissatisfied with their current situation as well as the prospects of what they can achieve in the future following a traditional path.

But it goes one step further, with the crippling costs of schooling, health insurance, day care and housing prices in many major cities, what people once were able to achieve with a traditional income now seems far out of reach.  The very lives we were brought up to strive for, seem a distant unattainable dream. Take my city of Sydney in Australia for example –  the median house price in 2017 was 13 times the average salary (mind you, that’s only the median house price, not necessarily even a nice house)

Mediocrity seems the unavoidable designated future for most and yet everywhere we turn we read that something else is possible… and it just might be!

Laying the foundation for our current environment, I believe there are three main other contributing factors.  Education, incumbent corporations and technology.

Education

Tertiary education used to be wholly relevant. In some industries it still is and that makes sense, after all who would want a surgeon or an engineer working on a life threatening project without the foundational knowledge to support their life impacting decisions. However, for many industries like IT, experience far outweighs formal qualification.  I recall working for various IT companies in my early 20’s, having no formal qualifications myself. The whole IT department would shudder at the prospect of a new employee straight out of university with no experience. In this day and age, with access to endless amount of information, coupled with general capabilities to experiment – almost anyone can do anything if they dedicate enough time to it.  Take Jack Andraka for example, the 15-year-old who invented a sensor to detect early stage pancreatic cancer, I wonder what part google had to play in that one!? – Ok! Fine, we might not all be geniuses but these days, anything is possible and it would seem with many of the “successful” startups out there, the idea barely has to be novel.  We live in an age where we can educate and test ourselves in our own time and this opens up a world of possibilities.

Incumbent Corporations

Next we have incumbent corporations. In the 1920’s the average lifespan of a company was 60 years and today that average has decreased to 15 years.  Furthermore, in Australia the number of new actively trading companies is increasing and the exit rate of companies is declining.  To put it simply it seems older companies are dropping off and newer established companies and are doing a pretty good job of sticking around.  This means that markets are letting the little guys have a go.  In the past, companies with large market share and resources to maintain it had market dominance, but in today’s age with increased accessibility, information and technology we are proving that new companies can rival old competitors and this lays the foundations for a continuation of the trend. Unfortunately for the bigger companies with vast management structures, politics and kilometres of miscellaneous red tape, new technological advantages are far easier taken advantage of by their rivals  We see this massively in industries like transport, hospitality and travel – these industries have been smashed open and made accessible to many smaller players that can now influence and gain traction in what were previously inaccessible markets.

Technology

Lastly -Technology.  Where would be without technology!  More than any single factor and combined with every other factor, technology has opened the door to make all things possible.  Every single function of a company is made more efficient with technology.  Communications, Marketing, Administration, Accounting, you name it and you can almost guarantee that it can be administered by a capable professional from any run of the mill laptop.  Technology for business operations has made possible many things that were previously only available to larger companies with resources to dedicate to the task.  Combined with the ability to self-educate and Voila! – everyone can get the job done! On top of this, technology has allowed companies to engage economies where their dollar stretches farther, enabling them to grow beyond their traditional means. Finally, technology has allowed new companies to reach further, providing digital products and services accessible almost everywhere on devices that everyone already has in their pocket.  Technology is changing industries, automating previously bespoke tasks and opening up entire new markets to previously non-existent entities.

Summing it all up

While it is blaringly obvious that being ambitious isn’t enough to run a successful company, driven by all of the above factors, more and more people are beginning to pursue the journey of entrepreneurship.  The impact that it will have on the world is exciting and it is profound, but for some, it will also be devastating.  Given the empowerment that technology has given the everyday person coupled with an environment ripe for disruption, continual segmentation of current markets is inevitable and will make entrepreneurship the way of the future.

It would seem that we have the perfect storm, we have a problem and we have the solution. Our growing needs and ambitions represent the problem and our growing capabilities represent the solution. Our passion at Aeona is overcoming the challenges that transpire once deciding to take on the challenge of entrepreneurship and thus we have made it our mission to ensure that entrepreneurs have access to the resources, knowledge and support to empower them to achieve their ambitions.

We would love to know your thoughts!  What do you think is driving entrepreneurship?

Comment below & if you haven’t already, make sure to stay in touch, like us on your preferred social media (over there on the right)  or subscribe to stay updated (also somewhere over there on the right)

The post A case for entrepreneurship – Is there really any other choice? appeared first on Aeona - Resource for Entrepreneurs & Startups.

One of the first slaps in the face for many entrepreneurs is the realisation that if you build it, they don’t necessarily come.  If you build it, and no one knows about it and no one knows how it can add value to their day to day lives, then you end up with a potentially fantastic solution, with very little customers to use it.

Generally, the next step for these entrepreneurs is to begin tirelessly scouring the internet, researching the most effective marketing methods, cherry picking the most accessible methods in an attempt get customers.  Marketing is hit with the proverbial sledgehammer, Hours are spent writing articles (content marketing), thousands are spent running ads (SEM), offshore companies are engaged to attempt to improve website visibility (SEO), meanwhile they’ve signed up to every social media under the sun and scheduled posts across the next few months (Social Media), perhaps even had some fliers created and delivered to local mailboxes en-masse (Direct Marketing).

The result of this is many wasted hours and many wasted dollars and while not necessarily having no results, generally poor results. Sound familiar?  If you know someone like this or you yourself have suffered, fear not, you are not alone!

So what is the issue here?  Why is this so wrong?

For anyone attempting to start a business or presently running a business, it is important to clearly define and remember exactly what the purpose of marketing is –

To Generate Customers.
That is all.

What many entrepreneurs confuse is the difference between getting exposure and actually turning that exposure in to leads and one step further, turning those leads in to customers.  The result of this is focussing too much time and money gaining exposure, but not necessarily spending an adequate amount of time and money ensuring that the mechanisms for turning that exposure into business is in place.

How entrepreneurs should look at marketing?

When I used to do photography, I asked an experience photographer – How much should I spend on my camera?  I believe his answer was a great one, he said, take your budget and spend two thirds on the lens and one third on the camera.

I believe that in business it is much the same, marketing (arguably including sales) should make up a majority of attention, money and efforts.  This should cause you to either a. Increase the total capital you have for your project.  Or b. Rethink your product and service, perhaps minimising some aspects to allow more capital to go towards marketing and sales.

After realising that you will need likely more time, money and effort than originally anticipated, then before taking any steps towards generating exposure, you should start by thinking about the mechanisms which will convert that exposure in to leads.

Conversion Mechanisms

For anyone that has been around the scene for a while, you have likely heard of the funnel strategy – Reach, Engage, Convert.  There are many variances of this strategy, but ultimately all of them are trying to say the same thing.  First you cast a net to bring in as many of the target audience as possible, you then further engage them with aspects relating to your product, solution or business and finally, for those ready to commit to your product you convert them to a customer.

Essentially this is the process of taking a person from being suspect to a prospect to a lead to a customer (and then ideally a repeat customer or referrer).

The mechanisms that we are talking about predominantly sit in the engage and convert areas of the funnel.  Most of the reach mechanisms are powered by your budget, so we will get to them in a different article.  The most important thing is that the mechanisms are in place so then when you have reached your audience you have the highest chance of actually benefiting from that reach.

So what are some of the most important mechanisms we should focus on before trying to reach as many of our target audience as possible?

1. Clearly defined sales process

It’s often a big debate whether “sales” is part of marketing or if it sits by itself in a different department.  As the world shifts towards digital, the role of an actual sales person can somewhat become diminished (certainly not for non-digital).  We believe that for the purpose of effective marketing it is paramount that sales process is considered a part of the entire marketing process.

Leads will most likely come through a phone call or a website enquiry.  For that lead to be successfully turned in to a customer, they often need to be guided in a friction free manner towards being able to commit to your product.  Make sure you define for your business:

• What happens when an enquiry is made?
• How is an enquiry advanced towards a sale?
• In what timeframe will each step happen?
• At what stage does a sale occur & how do they get there?

This should be defined for each type of sale – phone enquiry, digital enquiry, digital sale.  A clear path should be defined a sale and your customers should be gently massaged towards that end goal.

As a part of this sales process, it is mandatory that you use a CRM to keep track of all enquiries, leads, their details and any notes (We recommend Hubspot CRM, but there are many out there).  Additionally, to that, there must be the use of some sort of calendar with reminders to ensure that tasks, calls, meetings and enquiries are all completed when required.

Nothing will turn a customer away more, than having unmet expectations and their details forgotten.

2. Optimised Website

Your website must be designed in a way that creates the least amount of friction in generating enquiries or requests to stay in touch. With that said, each relevant page should have a prominent call to action (CTA) and a means for users to subscribe to your newsletter.  These two aspects at minimum will ensure that if a user on your website is interested then they act on that fleeting interest -immediately.

If an enquiry is too hard to make, quite simply, your users will likely go elsewhere, so make it as easy as possible.

Ensure that relevant pages have easy to use contact forms, gathering as much data as possible without deterring your users.  Ensure you include a tickbox in these forms to opt users in to your newsletter and future marketing activities. The data collected (and added to your CRM) will be used in future marketing activities (SMS & Email).

The foundation of your website needs to ensure that it has the capacity to host meaningful and engaging content.  The concept of content marketing is beyond the scope of this article, but when a potential customer is interested but not yet fully committed to a purchase, information in the form of articles, videos, explainer graphics etc can go a long way to giving them the confidence they need to sign up with your solution.  This content needs to be accessible from your main pages, to ensure that if your visitors do have questions or need more information, they can easily find it.  –And if they can’t, then they can always get in touch via the contact forms or CTA’s right!?

3. Content Strategy

Content is king!  Content is used to engage your visitors, users and customers.  Content should talk to your core brand values and the value your product and service provide.  This content will be used later on in the reach stage, but it is important to have a content strategy. Your content strategy should at bare minimum include:

• What type of content?
  • Articles?
  • Graphics?
  • Video?
  • Webinars?
  • PodCast?
• How frequently?

Once this is defined it is important to add deadlines and methods to ensure that this is kept consistent so that you can keep your audience consistently engaged and keep your business front of mind when they come to making their purchasing decisions.  This is where your calendar will come in to play, stay on top of it to reap the benefits (some people call this a content calendar).

4. Newsletter

People often underestimate the power of email.  You can understand why!  Every day your inbox fills with spam mail which mostly you delete.  But there are two important aspects a.  You mostly delete it –meaning you may browse some of it and b.  You will only be sending mail to people that have shown interest in your company’s products and services, this changes everything.

Make sure you have a newsletter platform setup, a template organised and an idea of what content you will include in your newsletter.  Then ensure that this newsletter goes out consistently, whether that is weekly, fortnightly or other.  Consistency is paramount to success.

Your newsletter will feature, news about your company, products and services, your content & of course a Call to Action. Again, get all of this organised and get it setup in your calendar to ensure you are consistent. Mail chimp offers a great free version of its tool coordinate, design and execute your newsletters.

5. Tracking Codes

Tracking codes are like cheatcodes used in a video game.  They allow us to take advantage of data collected about our website and visitors and further allows us to use that data to maximise performance of our website and future marketing methods.  There are plenty of platforms that offer tracking codes, but its most important that you have it setup for any platforms you intend to advertise on (if available) as well as for any analytics that you intend on tracking with.

In most cases, this will be summarised to webmaster tools, google analytics and facebook.  Make sure these are set up before you begin the reach stage of your marketing funnel as with these tools we will be able to see what is working, when, why and how!

Most platforms have fairly easy to follow instructions for getting this done, but failing that, this may fall in to the role of your web developer.

So to summarise, here’s what we are trying to say?

1. If you are starting a business expect to need to market your business in a big way
2. Allocate a majority of resources to marketing and sales
3. Focus on the mechanisms that engage and convert customers before focussing on the reaching the greatest number of target audience
4. At the bare minimum ensure the inclusion of the above mechanisms

Marketing is one of the most important aspects of any business.  In a perfect world you have the funds to hire an agency or a full time marketing manager.  If you are bootstrapping it, prepare for a roller coaster of a ride. Get the mechanisms for engaging and converting in place first to maximise the results of your reach!

Our next article will talk about reach and conversion metrics.  Stay tuned, give us some feedback with the comments below, like and follow us on social media (over there to the right) or subscribe to our newsletter (also over there on the right).

Whatever you do stay in touch, because there will be plenty more to come!

The post If you build it, they may not come.  Underlying Marketing Mechanisms for Entrepreneurs. appeared first on Aeona - Resource for Entrepreneurs & Startups.

“We’re back! We’re doing something new, we are going to change the world! Blah blah blah…”

If you’ve been around the startup scene long enough, you hear this all the time, actually, if you look at our last “blog” post (2015) – we say something very similar – the reality is, while good intentions and lovely ideals are great, some things, well most things are easier said than done.

Over the last 7 years, Aeona (Benny and Myself) have been working hard establishing Aeona as an institution in the Sydney startup and entrepreneurial scene.  We think we have done a pretty great job!  And we think it is safe to say – Sydney’s startups think the same:

(Sydney Startup EOY Party 2017)

When we started Aeona our goal was to establish an environment and provide services that would empower individuals to successfully pursue their entrepreneurial ambitions.

The first part of this mission was to establish the environment – this was to be encompassed by our coworking space – the first of many in an array of services to facilitate entrepreneurial success. We started with 168 square metres, graduated to 226sqm, doubled up 490sqm and then bursting at the seams took on an additional penthouse suite to bring us to a total of 574sqm.

For those that haven’t been to Aeona yet, we like to think we have the best coworking space in Sydney – we might not be the biggest, but what we lack in size we make up for with spirit!  With over 130 full time members, our community is tight knit and collaborates on a regular basis – our boardrooms and meeting rooms have hosted arguably some of the best startups in Australia and are used regularly as tools for educating current and future entrepreneurs.  Our rooftop terrace with sweeping views of Sydney, has been and is used  to celebrate Sydney’s startups (EOY party coming up – RSVP) with founders from all over, drinking to their successes, sharing their failures, and antagonising over the true essence of what it means to be a founder.

7 Years later we can safely say that we have successfully completed the first part of our mission!  The environment is complete, it is operating, it is thriving.

It’s now time for us to refocus and rededicate ourselves to the rest of our mission-

To facilitate the success of the greatest number of entrepreneurs as possible.

Now what does that actually mean?  What is success? And What do we mean by entrepreneurs.

Let’s not pussy foot around – when we say success, we mean to make money. We do not mean to find your purpose, or to solve the world’s problems or to find inner peace – what you choose to make your businesses is not our domain, but when it comes to making that business viable – That IS.

The reality is whether your business satisfies your deepest desires or not, it is simply unsustainable if it doesn’t make money or legitimately have the prospects of making money in the future.  If you haven’t run a business yet, then you will just have to trust me when I say -it is simply not worth the stress if there if you are not making money, you are simply better off sticking to your day job.  And for the those that have been in the trenches long enough – then you know exactly what we are talking about.

When we say entrepreneurs – we don’t care if you are running “startup” or “traditional business” – we care that you are taking control and having a go at securing a financially free and affluent future carving out your goals instead of someone else’s.  There is always a debate to be had about what a “startup” is but at the end of the day -run any type of business and at least in the beginning the hurdles are almost entirely the same.  We will be focusing on overcoming these hurdles, because it is these foundations that determine the viability of your project.

So what are we doing?  And when are we doing it?

The beginning of this leg of our mission, will begin with providing guidance and resources.  Over the last few months we have been partnering with some of the best in their industries to bring you reliable, accurate and important information and resources that will guide you on a successful entrepreneurial journey.

Invaluable knowledge and indispensable tools will be provided for free through videos, webinars, articles and events – we will talk to the important parts of “success” (as defined above) and provide access to the stepping stones that will get you there.

These resources will be hosted on our digital magazine and discussed in depth across social media and at live events.

Keep up to date with our weekly newsletter (subscribe on the right) or follow us on social media (also somewhere there on the right).

There will be a lot more to come and if you’re genuinely interested in running a “successful” business, then you won’t want to miss it! So whatever you do – Stay tuned -Because when we say “We’re Back” –what we really mean to say is – we’re not f*#cking leaving!

The post We’re Back – What to expect from Aeona in 2019 appeared first on Aeona - Resource for Entrepreneurs & Startups.

Not only will your business get along with other organisations much better – ATO, financiers, suppliers, employers – you’ll also reduce your exposure to business or cashflow hiccups along the way.

Case in point, we had taken over the accounts for a thriving retail operation but the bookkeeping, BAS and tax returns had not been updated for quite some time by the previous accountant. After the tax returns were prepared to a state where we could lodge them, the calculated tax liability was of surprise to the business owner – whom traditionally had not budgeted for tax outlays at all.

The benefits for keeping accounting and tax in check speaks volumes for the future success of a venture where they are:

• more likely to be profitable, have better cash flow and operate with less financial risk;
• may be easier to sell in the future, and possibly at a better valuation;
• easier to access external finance, including bank finance, if needed; &
• the venture may be better placed to respond to future challenges and opportunities.

Tax obligations in Australia could cover a whole wall with information but we’ll keep to the main sticking points you should be aware of.

Goods and Services Tax (GST)

This broad-based tax applies to most goods and services that Australian businesses sell.

The current rate is 10 per cent with businesses typically adding GST to the goods and services they sell, while also claiming credits for the levy included in the price of goods and services they purchase for their own organisation.

You may be able to claim GST paid on purchases, however not all purchases are eligible so it’s important to understand what you can claim for. Some basic criteria for making a claim include:

• The tax invoice featuring GST;
• Having the purchase relating to business; &
• Keeping a copy of the tax invoice where the supplier is more than $82.50.

Generally, businesses have to register for GST where the anticipated turnover is above $75,000. Once registered, you’re obliged to add GST to your tax invoices but also report GST activity to ATO via business activity statements or annual GST returns. The process can be challenging for some businesses but there are various ways to handle it more efficiently.

The ATO suggests using business accounting software to streamline your GST collection and reporting. You may also want to separate the GST you collect and keep the money in a separate savings bank account so that it’s easier to track. 

Keeping Receipts

In general, you’ll need to keep receipts or tax invoices for all your business expenses. This includes cash purchases & receipts from online purchases.

Your receipts or tax invoices should show:

• name of payee or payer
• the amount paid
• proof of payment
• The GST paid (if registered for GST)
• ABN number (if Australian based, and registered for GST)

Some examples of receipts to keep:

• Assets – such as property, motor vehicles, furniture & equipment;
• General business – software, stationary, mobile, internet;
• Travel expenses – all receipts from any travel, including food, accommodation and transit costs.

Remember if you make a business purchase, but sometimes use it for privately (i.e. mobile phone), you’ll also need to keep records illustrating what percentage of that was private.

Physical or paper copies of your receipts are not required, but if you’re claiming something as a tax deduction, you have a legal obligation to retain that business record for five years. Software such as Xero & Receipt Bank can be used to help you save these tax invoices on the cloud in the right manner.

As the Australian Taxation Office (ATO) can review your records at any time, it’s important that you are able to access these when necessary.

Pay-As-You-GO (PAYG) Withholding

When you pay staff, you are most often required to set aside (or withhold) a portion of their wages to pay to the government on their behalf.

When paying out wages or salaries, employers should ensure that the corresponding amount from PAYG Withholding tax tables are applied, although many accounting platforms (i.e. Xero) will do this automatically for you.

At the end of the financial year, employers are obliged to prepare PAYG Payment Summaries both for their staff and the ATO, based on the total wages and PAYG Withholding accumulated throughout the year.

PAYG Instalments

The PAYG Instalment system makes it easier for your business to meet your income tax obligations by requiring payments at the end of each quarter. These quarterly instalments go towards the expected income tax obligation accumulated from your business and investment income for the current financial year.

The ATO will write to you should you need to make these payments, usually after lodging your tax return where tax is payable. Generally it will apply to individuals, organisations or trusts who earn a certain amount of individual, gross business or investment income.

Business Activity Statements (BAS)

BASs are the government’s way of keeping businesses in check with GST and PAYG on a regular basis. These can often be generated from your accounting platform if the bookkeeping is up to date.

Due dates to plug in your calendar:
– 28th of the month following the end of the quarter for most DIY’ers, or
– 25th of the second month following the end of the quarter if lodging with a tax or BAS agent.

There are of course other dates which can apply if you have registered for GST on annual basis or have quite a few employees & paying more than $25,000 in PAYG Withholding annually.

Tax Returns

The tax returns are the government means to tax you based on your taxable income annually.

Almost everyone & all entities needs to lodge an annual tax return. These report to the ATO your income and expenses for the financial year, determining a taxable income that gets taxed at the applicable rate.

Companies with a turnover of less than $25m get taxed at 27.5%, whereas individuals get access to a tax-free threshold and are taxed at their marginal rate.

There’s a range of due dates for the tax returns but the main ones are:

• 31 October – for individuals who are DIY for the tax return usually via (etax)
• 15 May (next year) – for companies (except for large companies)
• 5 June – for individuals / trusts

—

To get your business in top shape, we recommend keeping a regular set of accounts and anticipating any future tax outflows sooner rather than later.

Message from Aeona:

The goal of these articles is to provide business owners and entrepreneurs information imperative to the success of running their businesses.

If you need further advice on any accounting issues, head on over here and let us know.  We’ll put you in touch with the best in the business.

Otherwise, we will be working hard to continue to provide important information, but would love your feedback and suggestions on future topics and any ways we can make this information more useful.  Please comment below OR send us a message from the contact page.

The post Understanding your accounting obligations in Australia – BAS’s, Tax Returns, PAYG & Receipts appeared first on Aeona - Resource for Entrepreneurs & Startups.

Structure

First off, you need to decide what structure you are going to use. This obviously varies from business to business, however in the vast majority of cases you should run your business through a proprietary company limited by shares (‘private company’). Incorporating a private company is relatively cheap and it means that none of your personal assets (eg, a house or car etc) are at risk of being snatched by creditors of the business. It’s also simple to manage and allows you to make use of a standard flat tax rate.

If you are running on extremely limited resources, if you have no personal assets at risk and if you are not expecting a whole lot of revenue or liability to start off, you can probably just get by with operating as a sole trader on an ABN. In some other rare situations, it may be appropriate to use a trust or a partnership for running the business. But in almost all ordinary cases, private company is the way to go.

Terms of Service

Whether you have a saas product, a Shopify store, an architecture firm or an online marketplace, you need to make sure that you minimise this risk against customers. Your terms of service basically set out the conditions on which you are willing to provide goods and services to your customers.

The key concept here is limiting liability and setting clear expectations. Key concepts of these agreements include:

1. Clarifying payment terms and what happens with things like cancellations, return or refunds.
2. The duration of the agreement and how each party may terminate the agreement. Always have an easy exit strategy!
3. Disclaimers and limitations of liability. One of the most common causes of consumer claims is poor results or satisfaction with a product, so it is important to say you do not guarantee particular results or effectiveness of goods or services.
4. Intellectual property clause which ensures any of your pre-existing IP is not transferred to the customer.

Many terms of service have the added benefit of clearly outlining the relationship between you and your customers. For example, a marketplace like Airtasker or Freelancer would state that it is merely a venue connecting buyers and sellers, meaning they can’t be sued in relation to any dispute between the parties.

Co-owners Agreement

This one is only important for businesses with multiple founders. The co-owners agreement is the pre-nup of a business relationship. Just like a romantic relationship, everything seems great and rosy when two business partners start out, but statistics shows that most of these relationships fall apart down the track. For this reason, it’s essential for pretty much all business partners to have this agreement.

The most common co-owner agreement is the shareholders agreement, which is used for private companies. Some of the benefits of a well-written shareholders agreement include:

1. Reducing the total negative potential and expense of business-threatening disputes by clearly defining each party’s rights and obligations, and by setting a dispute resolution process;
2. placing obligations on the shareholders towards each other to behave in good faith and to avoid conflicts of interest (for example, prohibiting them to set up a rival business or selling the IP to a third-party); and
3. providing a framework for what happens when there is a sudden (and often unforeseen) change to the personal situation of a shareholder such as death, disability, insolvency or even just a lack of desire to continue working in the business.

Services or employment agreement

This one is important when your business has to rely on non-founders to provide key services, the most common example today being outsourcing tech development. If you plan on outsourcing development, or even just engaging a marketing or PR consultant, it is absolutely essential that you enter into a clear services agreement with them. This applies, albeit to a more limited extent, to inhouse employees if they are generating valuable IP.

This agreement will address issues such as:

1. the specifications and expectations of what you will receive, when and for what price.
2. A mechanism for you to inspect and then accept or reject a completed service or product
3. A mechanism to handle variations to the scope – one of the most notorious areas of development and services agreements
4. An exit strategy
5. An intellectual property clause which ensure you will be the sole owner of all IP, with an indemnity in case of a breach

We cannot stress enough how important it is to have a proper services agreement with service providers. Experience shows that disputes occur very often due to misaligned expectations, and poor performance (or perceived poor performance). Investors also expect to see sufficient proof that all service providers have signed away all IP rights to your business prior to investing in it. Why would an investor invest in your cool new technology if you can’t even prove that you are the owner of it?

Trademark

A trademark is essentially protection of a brand name. A person can obtain trademark protection for a phrase, logo, sound or even scent, so that others would not be able to use it. Apple have registered trademarks over the phrases “apple”, “iphone”, “ipod” and also the logo design of the apple. McDonalds has a registered trademark for its name, it’s logo design of the golden arches, and also some meal names such as “happy meal”.

In today’s world, brand is king. You should always take steps to ensure no one is trading with a similar name or logo to you. Trademark registrations are relatively cheap and easy to obtain, so every business starting up should consider obtaining one as soon as possible. A competitor with a similar name could seriously devalue your business, and a trademark dispute could end up costing in the hundreds of thousands.

Conclusion

This article summarised the basic protections that all new businesses should put in place before they commence trading. They protect you against 3 core areas of risk: internal risk from cofounders and staff, external risk from customers, and intellectual property. Business owners who skip out on the documents described above are essentially taking a risk in the same way that not insuring your business or car is a risk – you will be saving a relatively small amount of money in exchange for incurring a potentially ruinous cost if issues arise down the track.

Disclaimer

Please remember this blog post is merely a general summary of law and should not be relied upon as legal advice. Any brand names used in this article were used as hypothetical examples only and are not factual.

Message from Aeona:

The goal of these articles is to provide business owners and entrepreneurs information imperative to the success of running their businesses.

If you need further advice on any legal issues, head on over here and let us know.  We’ll put you in touch with the best in the business.

Otherwise, we will be working hard to continue to provide important information, but would love your feedback and suggestions on future topics and any ways we can make this information more useful.  Please comment below OR send us a message from the contact page.

The post What essential legal documents and advice do I need to start my business? appeared first on Aeona - Resource for Entrepreneurs & Startups.