FW1 - Mental Imagery
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190 days before opening
With the financial courses, you have quite finished your core business plan. Right now, you have to choose a business name and legal structures. Then you should resume your project in a single sentence: Your mission statement.
Lesson: 1 hour
External readings: 10 hours
Do it yourself: 0
Total: 11 hours
Our objectives are:
-To help you in choosing a Legal structure and a Business name
-To show you how to write your mission statement.
1- BUSINESS NAME AND LEGAL STRUCTURES
Legal structures depend on the country where the company is based. Anyway, you should consult a lawyer. Beware of legal formalities. They can take a bit of time.
Here are some advices to guide you through this interview with your lawyer:
-Choose a structure that limits your own financial responsibility to the money you have invested in the company. Beware of unlimited responsibilities. In case of troubles you could be sued on your personal assets such as your home or your car. With limited responsibility, the money at stake is only the money invested in the company.
-Choose the structure that has the least formalities and the cheapest to establish. You can always change it later if it doesn't suit you, but for the time being, the most important thing is to start as quickly as possible.
-Carefully investigate the fiscal consequences of each solution.
-If you have associates, make sure the business is properly monitored (for instance with additional protocols)
The following readings mainly apply to the US legislation. However, most of the articles bring a general content valuable in any country.
Go to www.ideacafe.com . Click on "start up guide", then on"Legal set up" and finally on "Business entitie" .You will find here a comparative chart. It's a good introduction to the problem.
Go to www.nolo.com . Click on "Small business" and then on"Small business legal structures".
Go to http://peerspectives.org . click on "Legal issues and taxes" . Many matters are covered and notably litigations.
Go to www.myownbusiness.org . click on "Course" and then on "session4: Organization and insurance". By the end , you will find a quick quiz to do.
Choosing your business name is a critical decision. Think carefully about your business name and test it out on your friends.
Go to www.ideacafe.com . Click on "Start up guide" and then on "Name" and go to the "Cyberschmooz biz names forum". You can submit a business name to other people on the forum and it could be a good way for collecting larger advices than only from your friends and family.
The best way to avoid mistakes is to link closely your business name with your business idea. The name for your business can be like the head of your idea.
Your idea is a piece of text. The business name is a contraction of this text. The idea must be contained in ten to fifteen words. The business name must be contained in two or three words.
The business name must indicate what you do. Customers shouldn't have to guess. They should understand simply by reading your business name.
Avoid grand names that flatter your ego whilst misleading the customer. For example world travel agency, is a poor name in the first case because you only have access to prospective customers traveling to Patagonia.
Avoid mentioning your own name, which serves no purpose unless you are already famous. In the second example John easy lunch is not as good as point 13 easy lunch which states the location where your business can be found. Point 13 is the most fashionable spot of the Ipanéma beach in Rio.
Avoid mentioning the place where the product is manufactured. For example, the word pacific sounds good and matches up well with the product in the fourth case. In some cases, it's however necessary to mention the place. For example, if you are selling wines, it's better to indicate a location in France than in Alaska!
Remember that the name will feature on your business cards and all your advertising material. Take your time choosing your name. The decision will be easier if your idea is already clear and precise.
Go to www.entrepreneur.com . Click on "Start ups" and then on "naming your business" You will find here 8 quick reads about this topic.
Go to www.canadaone.com . Click on "Starting a business" and then on "Selecting a company name": A canadian point of view on this delicate matter.
Once you have chosen a name, you have to check that it is free for you to use. You have to look that it's does not yet belong to another existing company!
Then, according to State laws, you have to register your name. May be you can think about a trademark but it could be a lot expensive.
Go to www.nolo.com . Click on "Small business" and then on "Choosing a business name". You will find here a lot of legal advices.
The mission statement is both the final step of your business plan and the first sentence of your business plan document! It means that you cannot write it as long you have not performed all the previous studies. It's the conclusion of all your work.
The mission statement is a single sentence counting no more than thirty words. The thirty words must include the business name, the business idea and your unique selling advantage. We have already dealt with the business idea and the name. We must say a word about the unique selling advantage.
21-The unique selling advantage (U S A)
The unique selling advantage (USA) is sometimes called the unique selling proposition (USP). It's quite the same thing. The important word is unique. Recall you that we have said about the competitive advantage. The USA or USP is just the way to communicate this advantage to your customers.
The word unique is important because it has two meanings: Firstly the USA is the unique argument that you will use in your prospectus , presentation, meeting and advertisement. Secondly it is the unique thing which differentiate you from the competitors.
We know that this unique thing is your competitive advantage. We must now solve two problem: how to profile it for the customer and how to present it in less than ten words?
We have seen that currently a competitive advantage could be a better price or a better quality but do not just say "Our price is lower". In the same way, it is useless to claim that you focus on quality or price. Do you know a company which would claim that it does not care about quality or price! Do not move hot air. Be precise, go to the specifics.
You have to go further and to explain why your quality is better or why your price is lower. In fact you will have to define your USA is using two methods:
-Firstly, you compare point by point your business with your competitors and you list their weaknesses. A good way is just to have a strength where people have a weaknesses. Your advantage is just the opposite of some bad points about your competition.
-The second way is to write down all the tasks realized by your competitors and to compare with your own. Comparing these two lists, you look for a task that is unique or different.
Very often, you will find several differences and you need only one. How making up your choice? It means that you must have a clear idea about your prospects: Suppose that you have two advantages: Your price is the lower and your product is easy to use. What is the advantage you will retain? It depends of the budget of your customers. With a low budget, the low price could be your USA. But with a normal budget, it may be the fact that it's easy to use.
When you market a customer what does he think? He just thinks what's in it for me. If you are unable to answer in an also precise and short sentence, be sure to lose the customer.
You have to define this U S A in ten words. For example:
Thanks to futurist tech, our product is the best price.
The after sales service is the best (It is good if the after service of your competitors is poor).
We are open all night (It is good if you are the sole open by night. It would have no meaning for a night club!)
The U S A will be the framework for your entire marketing campaign. You will use it constantly inside your mission statement. Apply the rule of the thumb: Repeat, Repeat, Repeat it constantly!
No USA no business!
22-How to check your mission statement
The mission statement must be simple and understandable to everybody. To check whether it is simple enough, insert your mission statement into the following conversation:
Question: Hello, what do you do for a living?
Answer: I'm a businessman.
Question: What kind of business are you in?
You would simply reply
MY COMPANY, PACIFIC BOAT, MANUFACTURES INFLATABLE DINGHIES THAT LAST FIVE TIMES AS LONG AS OTHER ON THE MARKET. WE SELL THEM ALL OVER THE WORLD.
You have just expressed your mission statement in 29 words: every thing is included: your business name "Pacific boat", what you are selling: inflatable dinghies, who you are selling to: The whole world and your USA: Our boats last five times as long as those of our competitors.
Your reply must be simple and natural. You wouldn't tell the other persons that your factory in Cebu ( Philippines) produces synthetic rubber boats from polymers whose degree of resistance has been certified by the Los Alamos laboratory as sample number 253 of series X3Z4G !
1-Legal structures depend on the country where the company is based. Anyway, you should consult a lawyer.
- Choose a structure which limits your own financial responsibility to the money you have invested in the company.
-Choose the structure which has the least formalities and the cheapest to establish. Carefully investigate the fiscal consequences of each solution.
2-Choosing your business name is a critical decision. The best way to avoid mistakes is to link closely your business name with your business idea.
The business name must be contained in two or three words.
3-The mission statement is the conclusion of all your work. It is a single sentence counting no more than thirty words.
The thirty words must include the business name, the business idea and your unique selling advantage.
DO IT YOURSELF
If you have some difficulty for finding your business name go to the following and quite inexpensive site
If you live in the US go to the official site of United States patent and trademark office: www.uspto.gov . You can file your application on line for a trademark. Firstly, click on "check the trademark status for verifying that this trademark is free for you to use, then click on ""File for a trademark on line".
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