When should I worry about Protection?
No this is not a blog about sex, but just as important: protection for your business idea. When do you need to start working on protecting your new product idea in order to maximise the capital return on your investment?
We start a new series today on an Intellectual property as it relates to small innovation businesses. Now, if you chat to different people you will get different opinions on what to do. Your IP lawyer will say, “File for protection for everything” – mostly because that is what they do to make a living. Your true entrepreneur will say, “First to market will save the day and beat out the competition”. Both are right, but careful consideration needs to be taken in providing a good cover and legal protection for your idea.
So let’s unpack some of the concepts:
Any new idea that will earn you money, whether it is a new product, service or just a way of doing something old in a new way is worth protecting. But not everything can be protected by law, and not everything that is protected can be enforced. So we need to tread a careful line here so that you do not end up spending millions on lawyer’s bills and end up with a bunch of papers that add no value to your business.
IP or Intellectual Property is an umbrellas term used for Patents, Trademarks, Copy write and Designs. Each has numerous categories and subcategories, each with a different process. We will unpack some of these over the next month in this series. But to start off with here are some basic rules to follow before you speak to a lawyer and spend money:
1. Is your idea unique in design or function – unlike anything else?
2. Is your idea worth protecting locally or internationally in order to make you more money?
3. Is the name you are using for your brand or product going to add value to the product in marketing and brand identification for your customers?
4. Do you have resources to pay for protection?
If the answers of any of the above questions are Yes or Maybe, then I urge you to come chat to one of our team and see if there is a case of IP for your idea. It is better to be sure than to find out later that someone has copied your idea and is now making all your money for themselves. And yes, it does happen.
But for now: do not talk to anyone, if you do, sign a Non-disclosure Agreement and keep copies of everything: designs, emails, sketches, models and related documents.
Next week, we unpack the Trademark vs. Copy write issues.
Drew Houston – CEO and Founder of Dropbox
Financial Management IS For Everyone
This month’s topic is financial management. Now, don’t think to yourself, my accountant does that, and move on to the next cute video of puppies. Understanding the basics of financial management is the responsibility of the business owner as much as the finance team. Without a clear idea of what financial management involves, you are setting yourself up to be the victim of fraud, mismanagement, unnecessary tax and a whole host of SARS problems. So as they say, it is better to learn a little up front, than have to do a crash course in the midst of a crisis.
So what exactly are we talking about? Financial management involves planning, controlling and monitoring the financial resources of a company in order to achieve its objectives. Although the accountants just do it for fun, we shouldn’t only be keeping track of the cash to make it to month end, there should be some objectives in place:
– Do you want to be profitable by year 3
– Do you want to break even this month
– Do you want to save for that big capital item
– Do you want to open a new branch or launch a new product
What are you working towards as a company and what are the financial implications of that goal?
There are 4 main elements or foundation blocks to financial management:
· Planning – identifying what needs to be monitored, what amount you need and how you’re going to raise it
· Recordkeeping – keeping track of what comes in and what goes out in a logical, helpful format
· Reporting – monitoring how reality matches the plan, and deciding what needs to change
· Procedures and control – making sure nothing is missed and everything is checked
Over the next few weeks, we will discuss each one of these in detail. Don’t worry, you won’t need your accountant to interpret, we’ll use English to explain.
Our final business growth strategy for you
This week concludes our four-part series on business growth strategies. In this video, we chat about some of the myths and strategies in small businesses for both processes and money. You may be surprised at what you believe to be true and again how easy it is to get things right and back on track to develop a mindset of growth in your business.
Performance Management –overview
Last week we looked at how to measure performance in the service industry. Today we conclude the Performance Measurement discussion by looking at Performance Management –overview; a summary overview of the main issues covered
Performance management is the process of identifying the objectives of the organisation, setting targets, measuring performance against targets and taking action to improve the sub-standard performance.
Potential Benefits of Performance Measurement Systems
· If managers understand the organisational objectives and motivate employees towards achieving these, goal congruence within the organisation will be achieved.
· Assist in developing agreed measures of performance within the organisation.
· Enables comparison of different organisations.
· Enables accountability of the organisation to its stakeholders.
Potential Problems
· Tunnel Vision –an obsession with maximising measured performance at the expense of non-measured performance, e.g. sacrificing quality for quantities produced.
· Myopia (short-sightedness) –maximising short-run performance at the expense of long-run success, e.g. reducing production costs at the expense of product quality which will affect market share in the long run.
· Manipulation of data- creative accounting, window dressing accounts at the end of the reporting period.
· Gaming –building slack into budgets, slowing down production at the time of setting the targets.
· Incongruent goals –managers have different goals to the organisation, e.g. a project might be profitable for the company but reduce the profitability of the branch and thus the manager is unlikely to accept it.
Solutions to Potential Problems
· Involve staff at all levels in the design and implementation of the system.
· Encourage a long-term view among staff, e.g. company share option schemes.
· Ensure that the system of performance evaluation is audited by experts to identify problems
· Regular system review
· Audit data used in performance measurement to prevent/detect manipulation.
Performance Measurement in Non-profit Sector
Objectives of non-profits are more difficult to measure because:
· They are difficult to quantify e.g. measuring healthcare performance in the public sector.
· Many non-profits of multiple stakeholders with conflicting objectives
Value for Money Objectives
Value for money attempts to evaluate the performance of non-profits and other non-commercial organisations. The framework focuses on how well the organisation has achieved its objectives given the funding it has received.
The 3 E’s of Value for Money are:
1. Economy –minimising inputs
2. Efficiency – maximising the output/input ratio
3. Effectiveness –achievement of objectives
In addition, non-profits and public organisations may also use:
o Zero-based budgeting –a budgeting system that starts from scratch and looks at how much is needed for the organisation to fulfil each objective.
o Benchmarking – comparing the performance of a public sector enterprise with for example a commercial organisation
o League tables –use of institutional rankings in areas of health, policing and education. For instance, ranking schools bypass rate or police teams by crime statics in their areas.