Marketlend Academy: A New Business vs. A Driver Licence
Why is starting a new business easier than getting a licence to drive in Australia? In the video below, Marketlend Founder and CEO Leo Tyndall explains how this is a problem and why we should think differently about the reality of starting a new venture. Prefer to read rather than watch the video? The transcript is below.
Q: What do you mean by it’s easier to start a small business that to get a driver licence in Australia?
Yeah. Well, what I mean, is it’s easier to get a driver licence first than starting a business is the reality is, is that driver licence you gotta do a number of hours, and you gotta do these tests, you’re gonna send your contact and accounting firm alike when you open up a company, and away you go. And people will take on commitments, and you’ll be operating.
The problem is, is that, directors’ responsibilities are not fully understood, people don’t realise that there is a lot more complexities around things of reporting, you have finances, or like they do when they grow, there’s no business plan required, and so they send you to get going. Some, you’ll find business plans, but are they realistic or not? So there’s all these problems that come with people setting up businesses, because there is no restriction: you can just contact one of these guys and set up a company. Now, I’m not suggesting we should have restrictions, but what I’m definitely saying, is, that businesses themselves, by the time they get started, get too carried away to actually think about all things they need to know, and unless they’re very experienced, they’re gonna find that things are gonna blow up or things are gonna pop up that they never considered would happen before.
So, there is a need for some more training, on-going training, maybe, or at least some form of compliance check, or supervision, you could say, for businesses that have been operating for a year, or the like. I mean, I just saw a proposal for someone who’s start-up, and I gotta admit, the idea was just on the left field, he’s already spent 2.5 million dollars on it, and it’s like oh my God, is no one sort of sat there and gave him a bit of a shark’s tank, … test, and said, “Really? You need to actually wake-up and realize.” There has to be a very clear delivery of a solution, and not only just an idea, but an ability to actually make it grow and deal with it as it grows over time.
I think the other problem being, which is, in a way, a little bit being fixed is the failure for equity investors to participate in small business … the biggest problem in Australia I think is that people have to learn how to get more money, they can’t actually, most of them are not skilled enough to know how to raise equity.
If you look at our business, we haven’t borrowed anything. We’ve got equity partners, and every time we need funds, we’ve raised equity, and we’ve done that on the basis that we don’t, for the first few years, we didn’t think want to be levered. We didn’t want to have that debt hanging over our head, and it’s still the case, and it’s very much where it’s by comparable notes, or whether it’s by some other form, it’s very much that there is a need for the business to be able to grow, and by turning around and just going out and getting loans, ’cause you think that’s the only solution, isn’t the best solution.