Money and finances
To set up and run a business, you’re going to need money. Here’s our best advice.
You are going to need money. Here’s our best advice.
Friends, family and fools
As the saying goes, the most common investors are friends, family and fools. Take care of your cheerleaders and they’ll support you through thick and thin.
People who believe
Before the money runs out, you should look for partners or investors who can offer more than just capital. Good owners contribute their experience and open doors through their network. Do your research and critically evaluate which investors and partners you want to work with. This is how you avoid entering bad agreements.
Every year we organise a meeting place DNB NXT, where we bring together entrepreneurs and investors from Norway and abroad. Perhaps you’ll find some potential supporters here?
National fundraising
Crowdfunding is a kind of digital fundraising. You can present your business idea on a crowdfunding platform and use this to ask for financial support from the public. Read more in Norwegian Crowdfunding.no
Norway’s largest meeting place for entrepreneurs and investors
Getting investment capital is one of the most important but also the most time-consuming activities that a growing start-up does, and it takes time to build the company. The eco-system for unlisted companies is fragmented and unclear.
To make it easier to meet and attract investors, together with CrowdWorks we have launched DNB NXT Arena a digital meeting place for entrepreneurs and investors.
Why are budgets so important? Realistic budgets are important tools for the financial management of the business. There are three different budgets you should be aware of.
Investment budget
You won’t get anywhere with your business plan until you know how much money you need. You should therefore draw up a list of what you need to invest in or buy in order to get started. If you’re going to be a consultant, it may be no more than a laptop, a mobile and money for your share capital. In other cases, you may need more equipment to get started. Don’t forget to include a good savings buffer for unforeseen costs that might arise.
Banks and investors call this an investment budget. It’s a formal phrase but in practice it’s just a detailed and specific overview of everything that must be in place in order for you to start earning money.
Cash flow budget
Calculating revenue is perhaps the most difficult part of setting up a budget. If possible, it’s even more unpredictable than expenses, and may include elements of wishful thinking.
It can take time to gain access to customers, and it may be that you need to work with them longer than planned. Take care when outlining how much income you can expect and not least when you expect to receive the income. This is done in a so-called cash flow budget.
Feel free to use the template we’ve drawn up to help you get started.
Operating budget
The operating budget is an important planning tool. The budget shows the planned activities of the business throughout the year and will be compared against the actual accounts. It’s therefore often called a profit and loss budget. The budget gives you an overview of any deviations and puts you in a better position to implement any measures needed to adjust your course.
The operations budget is also an important financial tool that is used throughout the year in order to identify any unwanted developments early and to monitor the financial growth of the business.
Patents and non-disclosure agreements
Does your idea need protection?
Ideas cannot be formally protected, but when they are realised in the form of a product or service, you can get protection.
You can apply for protection in three main areas:
Patent Protection
- In order to obtain a patent, your invention must be a practical solution to a problem. This solution must be of a technical nature, have a technical effect and be reproducible.
Trademark
- If you want to protect the product’s or the company’s name, logo or slogan, you will need to register a Trademark.
Design protection
- Design is about the appearance and form of a product or a part of a product. Both physical and non-physical items can be protected, such as graphic symbols or the interior of a café.
Useful links:
Altinn has put together some useful information about tax, VAT, operations and administration.
Innovation Norway has many tools for start-ups. Webinars, support schemes and templates.
Is your idea unique? Do you have a strategy and financing? Have you checked the market? Read more about Norwegian Industrial Property Office their websites.
Accounting is a “must”
You need to make an assessment of whether you want to manage the accounts yourself or hire an accountant.
Managing the accounts yourself can help you understand the business’ ‘inner world’, but it can also take your focus off the most important task which is creating value.
As the business grows, many people choose to do a combination where you do some of the work and the accountant does the rest, or even hand over the entire task to the accountant.
Tax and VAT
Tax
All companies in Norway must pay tax on the income they earn. Your company type will dictate whether you, as a non-professional, or the company must pay the tax.
The Norwegian Tax Administration organises a free course for people who have just started their companies.
Value Added Tax
VAT is a tax on products and services that are sold in Norway. You cannot register for VAT until you have invoiced NOK 50 000.