How to build a business in 7 days for under $500

How to build a business in 7 days for under $500 [Day#1: The Idea]

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Entrepreneurs’ Challenge: Day #1

It’s my belief that everyone (yes, everyone) during their lifetime has at least one million-dollar idea.

Unfortunately, only a small few act 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 startup.

This is the first blog in a seven part series where I attempt to create a startup business in just seven days for under $500.

It all starts with an idea

The first thing is to come up with an idea.

In my case, the idea has to be simple to develop, quick to market and have wide appeal. And due to the short time frame I have given myself (and the tiny budget), the idea must be achievable with my personal skills and capabilities.

A premium SMS service instantly comes to mind. However, as these have a high initial setup cost, that would blow my $500 budget. So no. But SMS might still have merit.

I recall an idea that came while 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 that 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 one trip in ten would cost him $1,000 in lost tax claims! He suggested a log book could be managed 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 – seven million Australians claim work-related expenses each year on their tax returns.

What about the marketplace?

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 past friends, family, my bank manager, my accountant — anyone who would listen. I even asked random people waiting in queues, though this has more often than not drawn a cold response.

From all of this I deduced that 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 rather send an email from their smart phones to save money.

My accountant put me onto various ATO websites and noted that the cost of 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.

What about the competition?

Okay, 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 that 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 plethora of iPhone apps designed to manage log books but none seem to be targeted to the Australian market.
  • SideBuddy is proof that the eCarLogging concept is viable and was the only product I could find similar to my concept.

There were, of course, others, but the above list shows the variety of tools and services that currently exist to manage vehicle mileages, including one very similar concept. Although there was competition, I try never to see an existing service or product as a reason to back out.

I see alternatives both as a challenge (to do better) and reassurance that the concept is valid and the marketplace is already being educated.

What about a name?

The name is important.

It’s on your business card. It’s on your website. It’s the first impression people get of your product. It’s what 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 a name that would draw in business by itself. So I needed something that 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, importantly, top level domains .com and .com.au were available.

The business plan

One of the most important first steps to creating a business is the development of a business plan.

The first attempt doesn’t have to be a full blown business plan suitable for seeking funding from the most conservative of banks. But, for this venture, 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: $499.50 (upfront) and $66.50 a month (ongoing).

As there were things I could only do during business hours (visiting the bank), I split each day into two parts.

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 1: Research & Planning
  • Day 2: Registrations
  • Day 3: Marketing & Development
  • Day 4: Development
  • Day 5: Graphic Design & Development
  • Day 6: SMS Gateway & Development
  • Day 7: Launch!

This would give me seven hours on research, seven on registrations, seven on marketing, 42 on development, seven on graphic design, 14 on the SMS gateway and seven for the launch — 91 in total!

And, each morning, I will blog about the previous day. I will also cover other topics which don’t fit into the daily summaries at my blog semi-blog. Or you can follow my progress on twitter.

Let the challenge begin!

One of Anthill Magazine’s inaugural 30under30 Award winners, Sebastien Eckersley-Maslin thrives on creating smart solutions to every-day problems. For the past decade, he has spent his time balancing the demands of a full time Naval career, a Masters in Engineering and running personal businesses.

In 2009, Eckersley-Maslin returned from duty in Iraq with a drive to storm the ‘front line’ of Australian business. In 2010, he was the subject of an international documentary, where he aspired to create the world’s smallest multinational.

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  • http://www.escapingthe9to5.com Maren Kate

    Awesome post! This is totally right on, I teach similar things on my blog… its funny how much people don’t believe they can start a business without spending an absolutely fortune.

    This is great and very valuable content :)

    Cheers!

  • http://www.bravocharlie.com.au Philip Bateman

    Get stuck in! Thanks so much for sharing; great content Anthill!

  • Jaime

    Hopefully doesn’t spend too much time writing about it and more time working on it. Good luck!

  • Simon

    This is a great idea!

    I do wonder if there is too much development and not enough business strategy? Can you offload some of the coding/tech? Rope in a fellow coder for a slice of the action and free your mind for the business end rather than the product end? Just a thought.

    Best of luck!

  • http://www.syncronconsulting.com.au Jennifer Nini

    This is truly inspiring and the first time I’ve sat her to review some of the Anthill content – guess I know what I’ll be doing in my spare time ;P

  • http://www.meetrivers.blogspot.com/ Jane Williams

    The idea is great.

  • clay barham

    Entrepreneurs are creative pebble droppers, the successful ones becoming nails sticking up on the boardwalk of society that bureaucrats want to hammer down so no one trips over them. It is described in Save Pebble Droppers & Prosperity on claysamerica.com. Ayn Rand experienced life in a “prison,” and she put an ideology to it and described its opposite, which is individual freedom and pebble-dropping. This is what Americans today are rejecting because they have never experienced what it is like living in a “prison,” although Obama is building the cage now under the guise of community interests being more important than self-interest. claysamerica.com.

  • http://www.anthillonline.com James Tuckerman

    I’ve been assembling my own ‘startup rules’ since the early days of Anthill and it’s interesting to see how they converge. Here’s my number one rule…

    1. Low barrier to entry: This concept certainly fits the bill. Some people say the opposite – pursue ideas that are expensive to launch to discourage eventual competition – believing that their initial idea has no competion, which is flawed (everything has competition). Sebastien’s view is spot on: “I try never to 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.”

    Keep ‘em coming Sebastien. Gold!

  • http://www.semi-blog.com seb

    Thanks for the support guys! The biggest thrill of doing this sort of thing is inspiring others. I met up with someone for a quick coffee this afternoon (in between development and pitching my marketing plan) – he is taking the plunge and starting up his own online business after reading this article on anthill!

  • http://www.hire-an-umbrella.com.au Clair Maurice

    Love this! I think I’d do the first three steps about twice a month on different “I wish I had…” moments :D

    would love some more thoughts on how to separate the ‘good’ ideas from the ‘great’ ideas! Will definitely be tuning for the daily updates…

  • http://www.creativecaravan.net Rebecca

    I get the point that is being made here but has everyone failed to note that 99% of people don’t have coding or design skills? The two biggest expenses? I am not saying you can’t be innovative for under $500 but show me an example of someone who has no coding and no design skills filling the brief.

  • Simon

    An entrepreneur would find someone with coding or design skills (if that was needed) and then cut them in on the deal. Few coders and designers have entrepreneurial skills so it would be a good match.

  • Pingback: Can Sebastien build a startup in 7 days and under $500? – Wajeez Blog()

  • http://seldomlogical.com/ Peter Renshaw

    “… An entrepreneur would find someone with coding or design skills …”

    Having limited technical knowledge means the *entrepreneur* will probably be able to find somebody to code, but unable to distinguish between good and bad programmers until it’s too late.

    “… Few coders and designers have entrepreneurial skills …”

    Business types are clueless when it comes to creating Web applications like Sebastien has. New ideas like AutoCarLog mean the use of non technical manpower can be either outsourced or sourced later as required.

    • Simon

      Respect your replies but don’t agree. An true entrepreneur has good networks and can get a recommendation. Remember specialists usually end up working for generalists who see the big picture (a true entrepreneur) and business types or anyone for that matter can ignore code and design a good product then engage someone to build it.

      Business is a team sport :)

  • Pingback: 7 Days and $500: One Man’s Plan to Bootstrap A Startup In A Week - 25 Popular Blogs - Popular Bloggers.com()

  • http://www.kinique.com Marney Perna

    OK I am now very interested. I agree with the many comments re not having sufficient skills as this is my one single most frustrating aspect of creating online products. Look forward to reading the next 6 days….fabulous and thanks.

  • http://www.anthillonline.com James Tuckerman

    Sebastian – Now let’s get you a grant, so that you can really take it places. Anthill is holding a grant seminar on Wednesday 17 Feb in Melbourne.

    Here’s some detail:

    http://www.eventbrite.com/event/507809873/?discount=SEMINAR

    Come as my guest (I’ll hook you up). Speak soon buddy.

    Awesome series!

    James

  • http://www.semi-blog.com seb

    Hi James, that sounds like a good idea – I’m actually in the process of researching grants and this is a great opportunity

  • Nuralom Kpik

    i am a student

  • Albertvalecncia

    I love this new approach to generating business!
    Thanks James

  • Apel Mahmud Prodhan

    I am Apel I am a student

  • tiggerpepper

    Freind me on facebook i m Jack hermiz 4 social and networking purposes follow me on twitter if u like fresh funny ideas and comments

  • Matt

    Great article… I should set aside a week and get onto it

  • Pingback: Going From Idea to Site | ApplyMate Blog()

  • Yangyuqi888

    It is possible to require professional knowledge of the situation, to congratulate your friends!

  • Ignacio Inchausti

    Refreshing and insprational – many thanks!

  • http://www.dentalinsurancefullcoverage.net/ Kurtbrouwers

    Within 7 days and for that money it’s very impressive !

  • http://www.dentalinsurancefullcoverage.net/ Kurtbrouwers

    Within 7 days and for that money it’s very impressive !