The road from idea to success can be both strenuous and long. We give you our best advice on how to succeed as an entrepreneur.
In order to succeed you need both a will of iron, implementation capacity, flair and a solid dose of luck.
Additionally you need some “grey knowledge” which is maybe not what is closest to the entrepreneur heart: Keywords are accounting, shareholders agreements, budgets, paragraphs and bookkeeping. - Essential items that need to be handled well.
Jone Bauge, partner in PwC, is one of Norway’s most experienced advisors on start-ups. He knows well the challenges businesses meet on the way from start-up to "Gazelle". Especially, how important they are and how they can be solved.
- If you really want to succeed is it not enough to have a good idea, win customers and create business. Many start-ups have gotten off on the wrong foot because they have ignored the boring, but important tasks in the start-up phase, Bauge says.
In order to succeed you need both a will of iron, implementation capacity, flair and a solid dose of luck.
Bauge’s top advice for Norwegian entrepreneurs:
Create a suitable business case
- Before starting up, prepare a business case and a strategy for your business model, covering the market, the competitive situation and subsequent expansion. This will also be an important part of your pre-start-up efforts to attract investors and apply for loans or grants.
Understand who’ll be paying
– You need to understand your own income model. Put simply – who will be paying what, how and why.
Make up your mind: AS, ENK or DA?
– It is important to choose the right form of incorporation for your business. Different types of company, for example, a limited company (AS), sole trader (ENK) or limited partnership (DA), are each subject to different requirements. If you have chosen to set up a limited company, the major question then is whether to hold the shares directly or via a holding company, as this will significantly affect shareholders’ tax liability.
Know your numbers
– Make sure your key figures are easily accessible. Set short-term, measurable objectives that can be monitored with ease. You should focus on factors that are vital to your company’s survival and development. These vital indicators will also be of considerable interest to investors.
Look after your shareholders
Be sure to have a sound shareholders’ agreement and make it a condition that any new investors enter into the same, or an adjusted shareholders’ agreement. Here you will find some useful tips on shareholders’ agreements
Protect the concept
– Who owns the business concept, the company or its founder? You should discuss all matters regarding intellectual property rights and patents with someone who has expert knowledge of international law.
Raising capital
– How do you intend to obtain finance for your company? There are several options worth looking into, such as loans and endowments, public subsidies, crowdfunding and investor financing.
Get to know the law
– You should already have looked into the laws and regulations that will govern your business operations. Whatever form of incorporation you choose, there will be a number of regulatory requirements you must meet, such as approval of the annual accounts, submission of tax returns, VAT reporting and much more.
Check your authorisations
– Are you trading in goods or services online? If so, your activities may give rise to a number of legal issues, ranging from official authorisations, to consumer rights and the processing of personal data.
Hush-hush!
– Will you be attending a meeting where you will be sharing commercial secrets? Then make sure the other side has signed a non-disclosure agreement before any discussions begin
Keep track of payments
– Liquidity management is a key success factor. A well-prepared liquidity budget provides a good picture of the company’s planned cash inflows and outflows for a future period.
Get into a good routine
– It is highly important to maintain regular accounting routines. You have an obligation to keep accurate records, provide documentation, and to specify and retain financial information. Even if you do not have a statutory duty to keep accounts, you must still be able to substantiate all income and costs, and retain all documentation.
To succeed as an entrepreneur you also need a good deal of “grey knowledge”, which may not necessarily be close to the entrepreneur heart: Keywords are: accounting, shareholders agreements, budgets, paragraphs and bookkeeping.
…and here are 10 items that you SHOULD have in place:
Don’t mix business and pleasure
Be aware of the distinction between your private finances and those of the company; the Companies Act, for example, regulates capitalisation and the withdrawal of funds from the company.
Agree in advance
If there are several of you, you should agree in advance on the criteria for accepting new investors or for selling the company, and also on how contacts with potential investors are to be handled.
Check the clauses
It can be useful for company shareholders to be bound by a non-competition clause, but make sure that this has been carefully thought through, and that it does not, for example, prevent you from engaging in other work which may well be necessary during a start-up phase.
Put it in writing
Make sure that employment contracts are in writing, and that they include a non-competition clause and regulate ownership of whatever employees produce on behalf of the company.
Keep the consequences in mind
Any employee share purchase or option programme must be properly approved by the company’s board of directors or the shareholders’ meeting. In addition, written agreements must be entered into with the employees, in which clear rules are laid down as to how the shares or options are to be dealt with if an employee leaves the company. Keep in mind that the choice of structure for the scheme may have an impact on both the company’s and the employees’ tax liability.
Tax liability in other countries
Be aware that locating a warehouse abroad, or using agents or similar there, can incur a tax liability in the country in question.
Establish good routines
It is beneficial to establish good office administration and accounting routines from the very start. A set of document templates can save you both time and money.
Seek support
When starting up your own company, find out about the kind of support you are entitled to. The Norwegian authorities are keen to see new businesses emerge, and they can provide a wide range of support measures to assist you in this process.
Take out insurance
If you are self-employed, both you and your company are more vulnerable in the event of illness. By planning, and by taking out relevant insurance, you can better equip yourself to tackle such a situation.
Adapt to growth
Rapid growth will have a positive impact on the estimated value of your company, but it also entails the need for controls, processes and systems that are adapted to a growing company.
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