How to budget for start-up success
Newport Capital managing director, Lou Richard, advises start-ups to focus on revenue generation, instead of producing budgets in the early days of the business.
He claimed start-ups should have a clear definition of what their market is, work out their accessible market, and have discussions with people in determining revenue prospects. "When you have no idea of what your revenue horizon looks like, you should be spending all of your waking hours going out and promoting your opportunities to promote revenues from your technology," he said.
According to Richard, they should also have a well-established criteria backing up predictions of the business before taking on investments from venture capital or high-net worth companies.
"Investors want to know your worth for the medium to longer term so you need to create a compelling story as to why you are going to increase in value over the next few years. That is dependent on revenue creation and earnings," he said.
Government support for start-ups
The Federal Government announced, in June, that it will consult on crowd-sourced equity funding (CSEF) and review employee share schemes in supporting tech start-ups and driving digital innovation.
A review will also be conducted into employee share schemes (ESS) to help address the barriers faced by start-up companies in attracting and retaining staff.
In addition, the NSW Government labelled the state as 'Australia's innovation powerhouse' after unveiling Innovate NSW, a $6.7 million scheme aimed at backing progressive start-ups.
Minister for competition, policy and consumer affairs, David Bradbury, said, the Government should look at the framework around employee share schemes with an eye to supporting the development of start-ups in Australia, particularly digital start-up.
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