Have you ever thought of starting your own business? Entrepreneurship is popular these days and with all the facilities available through the Internet, starting a business has never been easier. I am doing a module on Technology Entrepreneurship at Aberystwyth University (Mauritius) and post about it weekly. Here is what I learned during the fifth week:
1. Lectures Summary
Lecture 9: Business basics and Lean Startups
This lecture explored the different types of companies present in the UK. I did some research for those in Mauritius. We also talked about the Lean Startup principles.
Types of companies
To stay in business, one must have:
- Registration with Her Majesty’s Revenue and Customs (HMRC)/Mauritius Revenue Authority (MRA) in Mauritius
- For Self Assessment for tax return
- For VAT if their takings are over £82K (Rs 4 million in Mauritius)
- A name and registered partnership in case of a partnership
- A address Companies House House registration and in case of a company
However, different companies have different requirements and responsibilities. Below is an overview of the various types of companies and their characteristics:
Self employed individuals take all the profit but they are also responsible for loses. They also have to do:
- Payment of income tax and national insurance
- Register as an employer to employ people
Further information on how to register in Mauritius can be found here.
In a general partnership, partners ‘liability are unlimited. The partners must:
- Choose a ‘nominated partner’ responsible for managing the partnership’s tax returns and keeping business records
- Keep records and report changes
A limited partnership consists of at least one general partner with unlimited liability, and at least one partner with liability only to the extent of their capital contributions. The partners must:
- Choose at least one general partner and one limited partner
- Register with companies house and send annual return
Limited liability partnership
A limited partnership consists of only limited partners, liable only to the extent of their capital contributions. The partners are not responsible for debts and cannot pay them. Still they have to:
- Choose at least 2 designated members ( since there are more responsibilities such as keeping accounts)
- Register an address
- Make an LLP agreement (profits, decisions, member changes)
- Register with companies house and send annual return and accounts
Private limited company
A private company is one which states that its constitution is private and cannot offer to sell its shares to the public. The Company must:
- Register for corporation tax
- Send annual return and accounts
- Choose at least one director (accounts + running) and one shareholder
- Have a ‘memorandum of association’ (agreement to create co.)
- Have a ‘statement of capital’ (shares and rights)
- Create ‘articles of association’ (how the company is run)
- Have no more that 50 members (25 in Mauritius)
Public limited company (PLC)
A public company is one which can offer to sell its shares to the public. The company must:
- Choose at least one director
- Have the letters “PLC” after its name
- Have a minimum share capital of £50,000
As a company grows, more people will be required. The company can decide to have employees but for this they will have to:
- Register as an employer
- Send statement of employment if staff will be employed more than 1 month
- Get employers’ liability insurance
- Check workplace pension scheme is needed.
- For Potential Candidate:
- Decide how much to pay them (More than National Minimum Wage)
- Check if he has the right to work in the country
- Check criminal record if needed
Cost of employment
The expenses that comes with having staff is much more that just their salary. The employer usually offers:
- Employers national insurance contributions
- Pension contributions
- Benefits (cars, computers, sick leave, maternity/paternity, etc.)
There are also indirect costs such as Buildings, heating, electricity etc.
This part covers the Lean Startup, on which I did a brief summary here. Below is how the lecture expanded on the guidelines:
Entrepreneurs are everywhere
Change is required in all businesses. Innovation can increase efficiency, profit and market share. So entrepreneurs can also be in existing business.
For example, A University can have new schemes, research ares, buildings etc…
Entrepreneurship is management
Management is sometimes viewed as too rigid for the dynamic and fast moving states of startups. But it is needed to prevent anarchy as decisions needs to be processed and made.
In the early stages, it is important to prove the viability of the business model to get “traction” but in the end, making money is the goal. The problem with startups is that they usually do not know who their customer are and what they want. To make valuable product, business plan and marketing the startup should ask the right question and devise a scalable and repeatable learning process.
Before experimenting the right metrics should be chosen. The should be:
- Actionable (repeatable) – Be certain what caused change, so it can be done again. e.g. use split-testing (avoid vanity metrics)
- Accessible – Everyone should have access and understand way it
- Auditable – The results can be verified
- Updated frequently.
Build-measure-learn – Treat product iterations as experiments
The startup should aim is to learn more about its customers
- Who they are?
- What do they want?
- How do they buy?
- How to reach them?
For better results:
- small changes should be made for each iteration
- the iterations should be fast
Pivot or Persevere
While iterating we might learn that our business / marketing / technology plan is fundamentally flawed: not what people want. So, we might consider to pivot and change direction. If we know that the market want X and not Y, we can use X and build Z.
To summarise Lean Startup is about reducing wasted effort and building what people want, not what we think they might want.
2. Project achievements
On Monday Fisayo suggested to reshuffle the teams:
- Student Deals App: research to be done by me and Kavi
- Creole Learning App: research to be done by the others (Arjun was absent)
I had to make a list of place where students usually hangout. I asked some of my friends and made a quick list.
On Tuesday Arjun was absent again, so Fisayo wanted to reshuffle the teams again:
- Student Deals App: research to be done by me and Paul
- Creole Learning App: research to be done by the others
On Friday Paul and I went to Bagatelle Mall to ask some stores and cafes if they would be interested to participate on the project. Only one of them rejected but the rest did not give a definitive answer either. They gave us the contact details of their Marketing department. We will have to contact them next week.
3. Interesting additional things
Here are useful site where I got information about the types of companies in Mauritius:
- Financial Services Commission, Mauritius
- Corporate and Business Registration Department(A Department of the Ministry of Finance and Economic Development)
- Mauritius Revenue Authority
- Mauritius Chambers of Commerce and Industry
- Mauritius: Types of Company – Sole Proprietorship (Links to other types of companies on the page)
I also read some posts on my favourite podcast app blog:
- Growing Player FM in 2017 and beyond: Gold Plan is coming
- This post was about the plan to introduce revenue streams into the app
- It has been 4 years since the initial release
- It is going to be subscription-based instead of one-time payment as the product relies on 24/7 Server and Human support
- The premium plan will also unlock features on the app
- There are also plans to introduce ads to the free app (which may reduce user experience)
- How we designed and developed Player FM’s premium plans in beta
- This post was about the business model the app is planning to use
- The premium plan will be linked to the account, so the user will be able to access the features on other devices
- New features from the premium plan are already being rolled out to the beta community
- These features come from requests from the community
- Community feedback is taken into consideration
Total Time Spent
- Lectures: 1 hour
- Group Activity: 4 hours
- Panopto videos: 1 hour
- Week Submission: 7 hours
- Additional Explorations: 4 hours
Total: 17 hours
Questions & Thoughts
This week I thought “Yep, we stopped doing Computer Science. We do Business now!”. I was also worried about Arjun since we got no sign of him the whole week.
I hope that we manage to choose our final project next week as there is not much time left before our first presentation.