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I definitely would not startup a business without any key asset. But it doesn't stop here. My key assets are only as good as my ability to protect them, especially when intellectual property is concerned.
I have summarized five key assets that are crucial to all businesses - regardless of its nature:
* Website
* Trademarks
* Copyrights
* Patents
* Confidential Agreements
Website
As we live in the world of information, businesses are turning to the Internet for retailing opportunities, marketing and servicing. Every business should have a Website regardless how big or small the operation and the key to establishing a Website is securing a domain name i.e. www.yourbusinessname.com or www.yourbrand.com. Once a domain name is established, anyone can create their own Website using DIY software or engage a Website designer to get the job done.
Trademarks
My brand name, logo, and any other symbol that distinguishes my company or goods from others are classified as my trademarks. Trademark is one of the most important business assets I'll ever own. I need to register my trademark with the local authority to ensure that I am the official owner of the mark, which gives me the sole exclusive rights to use the trademark.
Copyrights
A copyright grants me the exclusive legal rights to my creative work, which can include anything from literary or Website content to artistic compositions. I need to file a copyright with the local authority before I reserve the rights. Once granted, it prevents others from copying, performing or using my work without my permission. Don't confuse copyright with trademark. Trademark is used only to protect intellectual property such as company names, brands, logos and symbols.
Patents
Assuming I start a business because I have a creative yet “best-selling” idea and I want to turn it into a commercial success. Therefore I should quickly protect my invention so I can have a head start. The best way to protect it is to get a patent on it. A patent is a legal property right granted by the government of the country I want to trade in, to the inventor to have the sole exclusive rights to exclude others from using, manufacturing or selling the invention for a limited time. In the United States, a patent will last for 20 years in exchange for public disclosure of the invention when the patent is granted.
Confidential Agreements
They are legal documents that allow me to keep my company's secret once I have exposed them to my staffs, business associates, or any authorities. The documents will legally disallow them to disclose such information to the public indefinitely. For this reason, it's important that I get the relevant parties to sign the agreement before disclosing any information to them.
*Note: Unproven teories to not be shown to my readers! If you need any small business startup help, feel free to visit my Website :)
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This could be a very important step for businesses that require capital to startup and funding to keep overheads and inventories on track. Finding funding is not difficult. But getting the right funding is crucial. Of course there is a saying that goes, “beggars can't be choosers”! Nonetheless, startup owners must be smart when seeking funding or it could turn their dream business into a nightmare.
I would normally identify my short term and long term business goals and the kind of business I am planning to launch. Once I finalize my directions, I would then identify which form of financing is right for me.
As money comes in many forms, let me tackle the available options to fund any kind of business:
* Oneself
* Debt Financing
* Grants
* Friends and Family
* Venture Capitalists
Oneself
First of all, I believe startup owners should look no further to find the funding they need i.e. savings, emergency accounts, credit cards, equity pulled from their home, extra cash from downgrading their car, etc. The upsides are owners get to maintain full control over their businesses, no equity holders to pay off if they made it big and there is no responsibility to report to anyone.
Nonetheless, if the business fails, they will face a lot of personal debts, high interest to pay off that could burden their monthly expenses and it limits the growth of their business (especially when they need more outlets or inventories for strategic growth).
Debt Financing
It refers to traditional bank loans. The lending process is inherently a tough one, but it's also a system that has been the catalyst of success for many small-and-medium-scale business startups. The advantage of debt financing is owners don't have to give up part of their business equity or control. Besides, they have instant access of capital when they need most throughout their business operation.
The core disadvantage - not many “new kids on the block” will qualify for bank loans because it typically goes for business with 2-5 years of history. Moreover, personal collateral is usually required to obtain any bank loan and if they failed to pay the loan they may end up filing for bankruptcy.
Government Grants
Grant is a very subjective form of funding because its source usually comes from government. Different governments at different times would launch different funding programs, but they all share one commonality; it is free money program designed to fuel the innovative fires of small businesses, and typically target specific groups or types of businesses. Of course the greatest advantage of getting a grant is owners need not payback even if the business failed.
Then again, the competition is stiff for grants as there is a high level of rigid red tape to be complied with and the usage of the grant (after being approved) are usually well defined.
Friends and Family
Just like it describes, a simple and direct way to raise capital in exchange for equity or as a loan to be repaid. The good side of borrowing from friends and family is, it's less hassle, quicker and has less contractual obligations. The bad sides are the fund size is limited and the consequence of losing their money could lead to a sour relationship.
Venture Capitalists
They are made of individuals or organizations with large amounts of capital to invest in your business in expectation for higher returns. Getting investment from venture capitalists is equally as demanding as borrowing from the bank. They are demanding because they only invest in established companies. They usually get involved in the company's decision making, and they must have an aggressive exit strategy to sell the business. Usually, they prefer a fast growing company i.e. Internet-based company.
Nevertheless, the upsides of venture capitalists' funding are they can provide owners with powerful networks or contacts and owners need not payback if the business failed because they have big reservoir of money for owners to tap into.
*Note: Unproven teories to not be shown to my readers! If you need any small business startup help, feel free to visit my Website :)
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Disclaimer - This article may be freely reprinted in its entirety in any e-zine, newsletter, blog or website. The author's name, bio and website links must remain intact and be included with every reproduction.