New business - want your thoughts!

[seb]

I've set myself a challenge to build an online business in just 7 days and for under $500. I started today. The business venture is "an online logbook for managing car mileage for tax purposes, updated by SMS" and I'm keen to hear your thoughts!

The idea is that you manage your vehicle mileage online and post new trips to it via your mobile. At the end of each trip you send in the odometer reading and if it was for business or personal. At the end of the tax year, the system will automatically calculate your business use percentage and allowable tax deduction.

I'm keen to hear your thoughts and suggestions on this. Would you use a service? (and if not, please let me know why!) How much would you pay - per month, per year? The sms will be free and there will also be the ability to send an email or to add entries manually by logging onto the service.

[bradzo]

Great idea!
I'm currently talking with my accountant on how to apportion travelling costs - wish I had something like this way back when!

Good luck with it.

[exstatic]

That's a fantastic idea and I think a lot of us will use it!

.. but I think the $500 start up cost is going to be tight.

The setup cost of just signing up for a decent SMS service is about $150.. so that plus business registration, website design/domain reg/server setup, marketing material etc.. the list can go on.

Even if you don't factor your own time into the costs.. where is the $500 going to go? I would love to know!

[seb]

Originally Posted by exstatic

That's a fantastic idea and I think a lot of us will use it!

.. but I think the $500 start up cost is going to be tight.

The setup cost of just signing up for a decent SMS service is about $150.. so that plus business registration, website design/domain reg/server setup, marketing material etc.. the list can go on.

Even if you don't factor your own time into the costs.. where is the $500 going to go? I would love to know!

You'll have to wait until my post tomorrow morning about the exact budget!
I'll be doing all the dev and graphic design myself (I've built a heap of sites and services in the past) and I have a trick for the SMS gateway, why not build your own?? I'm confident it can be done!

[Dave Bockett]

Hi Seb,
Best of luck and can't wait to hear how it all goes!

I think it would be a very useful tool. I never have a pen in the car when I need to fill out the log book and naturally it slips and then I end up not recording the mileage correctly.

In terms of how much I think be prepared to pay I think that's hard to say at the moment. Perhaps the cost to the end user could be reduced by getting advertisers or sponsors on-board?

Dave.

[seb]

Originally Posted by Dave Bockett

Hi Seb,
Best of luck and can't wait to hear how it all goes!

I think it would be a very useful tool. I never have a pen in the car when I need to fill out the log book and naturally it slips and then I end up not recording the mileage correctly.

In terms of how much I think be prepared to pay I think that's hard to say at the moment. Perhaps the cost to the end user could be reduced by getting advertisers or sponsors on-board?

Dave.

Thanks for the feedback Dave. I must admit, I never considered the advertising sponsorship angle. The path I'm leaning towards is a monthly or annual subscription fee, paid for online, allowing trips to be sent for free (not a premium SMS service)... Is $10 a month too much?

[Dave Bockett]

Personally I don't think it would appeal to me unless it was around $20-30 per year.

I operate a pretty micro businesses and have a small number of trips per week so I wouldn't be able to justify much more. I'm sure that others who would use the service more would see the value in paying a bit more per year.

There is always the Hotmail, Google etc approach. Make it free, get thousands of people using it and then figure out later how to make money!

Dave.

[Avatar Consulting]

Your idea sounds great and possibly something that business owners would be interested in.

Having helped established dozens of new small businesses each year I would have some concerns with your projected business model running on $500 start up.

• Your advertising budget would need to be at least $2000 to create awareness
• Legal permits and general operational costs of setting up your business office would need at least $300 per year
• You would need a good CMS system to track all the data for all your customers. This is time and money to manage every day
• How will you maintain compliance with the Privacy Act and SMS advertising regulations to protect your customers confidential business information that you are collecting

Even a very efficient home based business needs capital to start and the less you have, means the more you will have to reinvest income into running it, risking it all with a slow month or two.

Still it would be interesting to see if your product could make enough of an impact to get owners using your system because few home owners worry about using a log book and just record the kilometre basis for tax purposes.

[ray_223]

Hi,

It's great you're sharing your story with us as you go.
Sounds like a great little idea - and no one will be able to predict if it will be a success or not until you actually try it!

My gut feel is it would be difficult to charge for a service when most business people who would potentially use such a service already use a log book and pen or use a GPS with a builtin log book already.

I could possibly see your service being used as an addon to larger businesses ERP systems (although this would be a difficult market to crack).

Good luck and keep us posted.

[King]

If you need an SMS gateway, pm me. Can help there.

You just need a couple of big companies on board and you are away - no need to $2K in ad budget, no need for office expenses, because you have defined it as an online business, so I am guessing it is just the essential tech aspects in the budget...