Start up in 7 days series:
- Day one – The Idea
Everyone has a one good million dollar idea, but not everyone acts on them. There is always an excuse, always a reason why not. The most common I hear is “I don’t have time” and “I don’t have the money”. Bollocks! I want to show that with just a little capital and a little bit of time anyone can turn an idea into a business – a start up. This is the first blog in a series where I attempt to create a start up business in just seven days and for under $500.
Day one – The idea
The first thing is to come up with an idea. The idea has to be simple to develop, quick to market and have wide appeal. Due to the short time frame the idea must also be within my capability. A premium SMS service instantly comes to mind, however as these have a high initial setup cost they would blow my $500 budget, so no. But SMS might still have merit.
I recall an idea that came whilst chatting to a good friend of mine a few months ago. Working from his car, he was repeatedly frustrated by having to write down his mileages in a logbook, a logbook which would then be misplaced, lost and chewed by the dog. Logs would be jotted down on the back of receipts, discarded wrappers or scrap paper. Ultimately he wasn’t recording every business trip and he was therefore unable to claim the most he could come tax time. A quick calculation on the back of a laptop revealed that missing just 1 trip in 10 would cost him $1,000 in lost tax claims! He suggested a log book could be done electronically and I thought this would be a great idea to use for this challenge.
A service to maintain a vehicle mileage logbook online and update it anywhere via SMS.
It was simple to develop, I had experience with building SMS and online business systems. It was quick to market, the benefits could be explained quickly, promoted online and bought on the spot. And it had wide appeal – 7 million Australians claim work related expenses each year on their tax returns.
Although I already had one customer, my friend who kept losing his logbooks, I needed confirmation that others would like the idea. I jumped on facebook and twitter and asked the question. I floated the idea to friends, family, my bank manager, my accountant – any one who would listen. I even asked randoms waiting in queues – though I often received a cold response to this.
From this people were very warm to the idea of managing their logbooks online and having the ability to send SMS. Lots of people didn’t like premium SMS and a few suggested that they would like to send an email rather than an SMS to save money from their smart phones. My accountant put me onto various ATO websites and noted that costs using the service could even be considered a tax deduction. People were generally happy to pay up to $10 a month for such a service.
Ok, time to see what else is available. I jumped online and tried every search term combination I could think of and came up with a list of existing businesses which compete directly or indirectly with the AutoCarLog concept.
- Officeworks. At $4.69 this paperback logbook is the cheapest and most popular product I would be competing against!
- TrackInABox is a product that does automatic logbooks using GPS tracking. Pricey and targeted at truck drivers.
- AutoCentral is one of many fleet management software systems targeting large organisations.
- There are a heap of iPhone apps which do log books, but none seem to be targeted to Australian Tax savings.
- SideBuddy is proof the AutoCarLog concept is viable and was the only one I could find like this.
There were of course others, but the above list shows the variety of tools and services which currently exist to manage vehicle mileages including one very similar concept. Although there was competition, I never see an existing service or product as a reason to back out. I see them both as a challenge to do better and reassurance that the concept is valid and the marketplace is already being educated.
The name is important, it’s on your business card, it’s on your website, it’s the first impression people get with your product, it sets the scene. Initially I started thinking of inventing a word, such as Carnoodle or Odonaba using the cheekily simple web2.0 name generator, but I wanted the name to draw business in by itself. So I needed something which was memorable, quick and described itself. Not easy. I jumped on my whiteboard and wrote down words that describe the service, ‘logbook’, ‘car’, ‘mileage’, ‘automatic’, ‘sms’, ‘online’, ‘tax’ and eventually settled on the combination ‘AutoCarLog’.
The name “AutoCarLog” is a combination of words that are instantly memorable and informative. The added advantages are that it is short and therefore twitter friendly (not needing to use a url shrinking service) and top level domains .com and .com.au were available.
The most important part of a business is of course the plan. It doesn’t have to be a full blown business plan suitable for seeking funding from the most conservative of banks, but a plan will help me prioritise tasks for my six remaining days and work out where to spend my $500.
When I came up with the challenge, I figured $500 was more than enough, it turns out it was just enough! My quick budget is as follows:
- domain name registration – $13 a year
- web hosting – $5 a month
- SSL certificate – $88 a year
- credit card payment system – $220 plus $22 a month
- Bank account – $6.50 a month
- SMS modem – $140
- SIM card – $5 a month
Total upfront – $499.50 and ongoing – $66.50 a month
As there were things I could only do during business hours (visiting the bank) I split each day into two. During the day I would have to cover registrations, marketing and promotions and during the evenings and weekends I could focus on development and design.
- Day one. Research & Planning
- Day two. Registrations
- Day three. Marketing & Development
- Day four. Development
- Day five. Graphic design & Development
- Day six. SMS gateway & Development
- Day seven. Launch!
Giving me 7 hours research, 7 registrations, 7 marketing, 42 development, 7 graphic design, 14 sms gateway and 7 for the launch – 91 total!