So you’ve decided to take the plunge and start your blockchain business. Now you have to invest some time in research, planning, and ensuring that the set up of your enterprise is done in a way that will maximise your returns, success, and potential. In this section, we will take an in-depth look at some of the key steps you need to take in the set-up process. From checking out the competition and finding your niche, to deciding how much tax you want to pay and who you will bring on to help you with your journey- there are so many things to do.
Thankfully, Fast Offshore can not only explain it to you in simple and transparent terms, but we can guide you through the whole process from start to finish. Let’s read on to get an idea of what’s involved.
Start Your Blockchain Business With a Good Business Plan
Any business owner or entrepreneur knows that a clear, well-thought-out, and comprehensive business plan is an important first step before you start a blockchain business. During this stage of the process, consideration needs to be given to a range of factors including finance, structure, clients, product, and competitors.
Define Your Product/Service and Your Target Audience
First up, you need to decide on what your blockchain product will be. Do you want to open a cryptocurrency exchange or offer a B2B logistics blockchain platform? Do you want to start a crypto gambling site or provide blockchain identity management services to private customers? You need to pin down your exact idea, the end-goal, and exactly how blockchain will come into the equation. Knowing this vital information before you proceed will ensure you pick the right jurisdiction and get licensed if applicable.
Once you know what you will offer you need to think about who you will offer it to. Is your product for business owners in Asia-Pacific? Or middle-aged gamers in the US? Blockchain is applicable in almost every industry; finance, cryptocurrency, security, logistics, law, education and much, much more. Decide whether you’re offering a B2B or B2C service, which sector it is categorised in, and where is your audience located. This will influence which jurisdiction you choose to start your blockchain business in.
Analyze Your Competition
At this stage, you should also be checking out the competition and seeing if anyone else is offering a similar product. If so, then what can you do better and differently? If not, then why not? You need to find the perfect niche but you also have to understand whether your idea is possible or if there is a demand for it. Research other companies, read blockchain news and follow industry forums and boards for the latest developments.
Next up, think about how you will make money and how much you will charge. Are you offering a package solution with a license or one-off payment? Or is it better to charge per transaction? Consider what competitors and similar companies are charging and get an idea of how many clients you expect to have in the first one, five, and ten years. A big advantage of blockchain is its ability to manage micropayments, meaning this could be a viable business model for you.
Based on the above, you should be able to get an estimate of how much profit you will make. Blockchain companies can be very profitable but you need to ensure the cost vs price is in proportion with demand. It’s also worth considering if your product can be adapted to other industries at little extra cost. This can increase profitability with minimal additional overheads.
Branding and Registrations
This is also the moment you should choose the company name and register any patents, copyrights, or trademarks associated with it. It might be an idea to register your internet domain and choose social media handles at this point as well.
Start Your Blockchain Business With Healthy Finances
Having created a comprehensive business plan, it’s now time to crunch some numbers. When you start a blockchain business you need to factor in the startup and ongoing costs that you will have to pay. Here’s an example of some of the startup and ongoing costs relating to starting a blockchain company. Of course, others may apply depending on the product or service that you’re offering.
Start Up Costs
- Web domain and hosting
- Registration of trademarks/patents/copyright
- Corporate service provider fees
- Incorporation fees
- Capital requirements
- Licensing if applicable
- Software/hardware purchase and licenses
- Product design, development, and creation
- Staff hiring costs
- Office rental
- Utilities, office equipment and supplies, internet
On Going Costs
- Web domain and hosting
- Corporate service provider fees
- License renewal
- Compliance and audit
- Office rent
- Utilities, office equipment and supplies, internet
- Software and hardware licensing
- Staff salaries
- Accounting fees
- IT support
- Product development
Pick a Crypto-friendly Jurisdiction to Start Your Blockchain Business
You will have already given thought to where you will start a blockchain company back in the business planning stage. Now it is time to really drill down into possible locations and make a firm decision on which one is best for you. At this point, it’s advisable to engage a corporate services advisory such as Fast Offshore. The partner you choose should have demonstrable knowledge of blockchain and crypto, corporate services, and the jurisdictions you are interested in.
There are a number of different points to evaluate before you finalise your decision. Firstly, consider the cost and the time it takes to incorporate the blockchain company in a particular place. Then you need to look at whether there are licensing requirements or other regulatory considerations. How much tax you have to pay, or if you have to pay it at all should also be a major point that you address. The rate of tax payable on your revenue can make a huge difference in your profitability.
Other considerations include ongoing maintenance costs, compliance and regulatory oversight, the likelihood of changes to the law in the future, and the level of privacy offered to ultimate beneficial owners. All of these points should be discussed with your service provider who will be able to help you make the right choice.
Incorporate a Company to Start Your Blockchain Business
Once you have picked the jurisdiction which you feel is the best one for you, it’s time to start the incorporation process. To start a blockchain company, you will need to submit your identity documents, proof of address, bank and professional references, and a background check to your service provider.
They will also ask you to provide your CV, business plan, and other supporting documentation on a case-by-case basis. Different jurisdictions have different requirements for incorporation, so what is needed from you will vary. As a general rule, due diligence documents and a business plan are always required.
The time to start a blockchain company can vary as well. Some jurisdictions can offer incorporation in less than a couple of days, others take longer. Make sure you are clear on how long the process will take and that you submit all documents in a timely manner.
Get a License (If Required)
Depending on what your blockchain company will do and where it will be located, you may need to get a license.
If for example, you are opening a blockchain-based cryptocurrency exchange, or a cryptocurrency gambling site, in most places you will need a license to do so. But this is not always the case and some industries are unregulated or self-regulated instead. Others may just require you specify the intent to use blockchain or crypto in the Memorandum of the company and the business plan.
Understanding whether you need a license is an important part of the journey to start a blockchain company. Contact your service provider and be sure you know what your obligations are. Be careful to factor any application times into your timeline and budget for any fees or processing costs.
Set Up a Bank account
Once you have your company set up and have got any applicable licenses or permissions, it’s time to open a bank account. If your blockchain company is operating in a regulated market, you will need to show your license when you open the account. You should also consider which currencies you will take payments in and whether you will accept cryptocurrency as well.
Before you start a blockchain company, you need to ascertain whether you will offer payment portals via your site. How will your clients pay you? Offering a range of methods, where applicable, means convenience for your customers and clients.
Your corporate services provider can assist with opening a bank account wherever you need it. They can also undertake negotiations with payment providers, card issuers, and payment gateways, securing you optimum rates and terms.
Register for taxes
If you start a blockchain company in Curacao, for example, you will not be required to pay any tax on your revenue. But some jurisdictions, even offshore ones do have tax rates for revenue generated outside the country. You might also be required to submit annual returns and documents to authorities, even if you are not liable for tax.
The best way to go about this is to ask your corporate services provider to put in place all necessary tax arrangements. They can register you for tax if needed, and assist with any returns, statements, or declarations that the authorities require.
Pick Your Marketing Channels
The marketing of your blockchain company can be started at any point, ideally earlier on in the process. But it is after you’ve incorporated the company that you can take things up a notch. Here are some good ways to market your blockchain company.
Social media is a great way to create buzz as you start your blockchain company. You can reach out to influencers on Linkedin, join the conversation on Twitter with suitable hashtags, and show off graphics on Instagram. Facebook can be used to join discussion groups and to spread the word of the product and its upcoming launch. Reddit is also a great place to publicise your blockchain company and to a lesser extent, GitHub. You can also consider doing podcasts or starting a WhatsApp or Telegram group.
Reddit and GitHub are great places to start but you can also find a number of other forums and notice boards to post information relating to your project. Quora, Blockchain Forums, CryptoCurrencyTalk, Cryptodiffer, and BitcoinTalk are also popular forums for discussing the latest developments. You should also think about creating hype in industry-specific forums and spaces related to your service or product.
Creating great content is an effective way of marketing your product. You can have a blog on your website or submit blogs to relevant sites. Send press releases to all the big crypto and blockchain news portals, pay for posts, or engage a company that specialises in link building articles.
Hire Staff for Your Blockchain Business
It’s likely that you will have already hired a number of people before you start your blockchain company. But as you approach your “go live” date, you need to increase the workforce. Here are the areas you should be hiring leaders, management, and general staff in:
- Product design and development: programmers, analysts, designers, coders, and other tech professionals to build and maintain the blockchain product.
- Marketing and design: graphic designers, marketing staff, content writers, social media experts, web designers, sales staff.
- HR: human resources director, staff liaison, accounts and contracts staff.
- Accounting: accounts payable and receivable staff, payroll, auditors and other finance individuals.
- Operations: Supervisory and management staff, office manager, operations manager, compliance and risk managers.
Depending on which industry you are operating in, you may also need to consider other departments.
Stay on top of maintenance
When you start a blockchain company you have to make sure to maintain it. This means renewing licenses, updating the business description, making changes to the corporate structure, filing reports and statements, and various other matters. It’s a good idea to stick with a provider that can take care of all the different obligations for you.
Make a plan of what needs to be maintained and what your obligations are in terms of compliance, filing and accounting. Then get your service provider like Fast Offshore, to quote you for them providing this. By handing these matters over to an experienced third-party you can significantly reduce the red-tape burden on you.
Contact Fast Offshore to Start Your Blockchain Business Today
Fast Offshore has helped a number of entrepreneurs to start a blockchain company. We have been through all of these steps and more, in a growing number of jurisdictions. For honest, transparent and accurate advice, Fast Offshore is your one-stop services provider. Contact us today to find out more or to get a quote.