This is a guest contribution by Ron Mendelson from Fast Offshore. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
The world of blockchain is booming and now is the time to open a blockchain or cryptocurrency-based business providing innovative solutions to business, or private customers. Current trends and forecasts predict that the industry is going to continue growing exponentially over the next few years as demand for the tech continues to increase. We can expect to see blockchain and crypto integration in every aspect of society including governmental, business, the economy, finance and banking, marketing, healthcare, and eCommerce.
If you have an idea for a blockchain business, there has never been a better time to make it a reality. In this article, we bring you the lowdown on how to get your company off the ground.
Draft your business plan
Having a great idea is not enough to ensure the successful launch of the blockchain business. You need to work on a comprehensive business plan that lays out in detail, the product, how it works, what its purpose is, who your clients are, and what the ultimate aim is. This can be a daunting process, but any good corporate service provider will be able to guide you through the process, making sure you have everything covered.
Key points to cover include:
- Identifying a problem or a gap in the market and positioning your product or service as a solution
- Defining the product/service in detail
- Detailing the target audience and demographic
- Evaluating the competition- what they are offering, where they are failing, what’s missing from the market
- Estimate pricing- how much your customers will pay, how many transactions you will have, what will your revenue-generating model be, and how will you grow in the future
- Decide on branding, a name, a logo and a web address. Be sure to trademark or patent any ideas and branding features you’ve come up with at this stage.
Choose a jurisdiction
When starting your blockchain business, one of the first big decisions you make should be where you will locate it. Several jurisdictions have created a regulatory framework for blockchain businesses and somewhere it is unregulated, meaning you can operate without a specific license.
Each jurisdiction has its pros and cons as well as different requirements and obligations. Features like tax, company incorporation, timeframes, compliance, and laws all differ depending on the jurisdiction and what may suit one operator, will not suit another.
At this stage, it’s best to engage a corporate service provider with blockchain experience in several jurisdictions. This will allow you to evaluate locations against each other and to ensure you make the best choice for your blockchain business. Making the wrong choice at this stage can cost a lot of money as well as delay the launch of your product or service.
Having already drafted a business plan, it’s now time to start considering how much you can and need to spend on setting up the company, as well as keeping it going. Of course, exactly what costs you will incur will depend on your jurisdiction and the type of blockchain business you will start, but here are some general suggestions to factor in.
- Startup costs
Costs you need to pay at the startup stage include market research, onboarding a corporate service provider, registering your domain and hosting, incorporating a company and the capital requirements that come with it. You also need to factor in any licensing fees including the costs of collating the paperwork, software and hardware licensed, product design and development and initial marketing costs. Lastly, you need to employ your team, rent an office, and pay for office-related costs including utilities, office supplies, internet, and other equipment.
- Ongoing costs
You will find that many of your initial costs will also be ongoing costs but there are additional fees and payments to consider. Web domain and hosting fees, Corporate Service Provider fees, rent utilities, salaries and supplies will all be due periodically. Additionally, you need to pay renewal fees for your licenses and company, conduct compliance and audit exercises, pay an accountant, and engage IT support.
Open a bank account and payment processing accounts
This is one of the most important steps you will take. Reason being, you need to get paid! Opening a bank account and facilitating different kinds of payments allows more clients to use your services.
Depending on where you are operating, you will need to provide information on your company and license, as well as your business plan and due diligence documents. You will also be expected to provide information on potential client demographic, the estimated number of transactions, and projected revenue.
As well as having a bank account, you need to engage with payment processors. Depending on the nature of your business, you may choose to include card payments, transfers, wire payments, eWallet transfers, and cryptocurrency payments. You should also consider which currencies (fiat and crypto) you will accept. Remember, the more choice you offer, the more clients you have access to.
We recommend undertaking this process with professional guidance. In this new sector, some banks are hesitant to open accounts and the application needs to be handled with care. Furthermore, we can get you better rates with payment processors and providers, than if you were to go it alone.
Register for taxes
Some jurisdictions such as Curacao do not require that you pay taxes on income accrued outside of the country. Others may levy small rates for that kind of revenue. Some require tax returns and statements, others do not. Ensuring you are fully tax-optimized and in line with your obligations is extremely important and unless you are an international tax expert, you shouldn’t attempt it yourself.
At this stage, ask your Corporate Service Provider to put in place all necessary tax arrangements, ensuring that you are optimized as much as possible.
Find your team
Once all of the paperwork is out of the way, you can start hiring your dream team. Most likely, you will already have a core staff working with you, but now it’s time to expand.
You will need an executive for operations, human resources, programmers and blockchain developers, app developers, accounting and finance, compliance and legal, marketing, customer support, webmaster, front and backend design, IT, business development, and product design. You also need to look at hiring supervisors and staff in each area, to delegate tasks and increase efficiency and keep the day to day running of your business ticking over smoothly.
Be sure to check with your Corporate Service Provider, whether your jurisdiction or license (if applicable) has certain requirements regarding staff members.
Now the fun can begin. While it’s advisable to have started your marketing several stages ago, once everything else is in place, you can move things into overdrive. You need to get your website up and running and if applicable, an app as well. This is also a good time to place adverts and banners in industry related websites, attend industry conferences, give interviews, and work on your SEO.
Without clever marketing, you aren’t likely to get the interest that you need to stay sustainable. Remember to promote what the problem is, what your product does, and how it provides a solution for that problem.
It’s also time to select the social media outlets specific to your target audience. Get active and make sure to connect with your Twitter, Facebook, Instagram, Reddit, TikTok, GitHub, WhatsApp, YouTube, Pinterest, Snapchat, or LinkedIn audience. You should also set your content writer to craft press releases about your product launch and distribute interesting articles to help drum up excitement before launch.
Once you have created enough hype and have people hanging on the edge of their seats, it’s time to go live!
Consider ongoing maintenance
Just because you’ve “gone live” and everything is going to plan, doesn’t mean all the paperwork is over. As with any type of business, a blockchain business also requires that you meet your periodic obligations including annual statements, taxes, audits, compliance, and license renewals. The best thing to do is to hand over all of these tasks to an experienced Corporate Service Provider like Fast Offshore to make sure it’s all taken care of quickly and efficiently. This means you don’t have to worry and can focus on developing and growing your blockchain business.
About the author:
Ron Mendelson from Fast Offshore he has helped countless clients start, relocate, and grow their businesses in jurisdictions spanning several continents. Fast Offshore assists in blockchain & cryptocurrency business services, company formation & management, corporate structuring, online gaming licensing, Forex licensing, payments, accounts, regulatory compliance, and more. The firm has clients located around the world including the U.S.A, Central and South America, Europe, and Asia. Contact Fast Offshore
He can be contacted at [email protected].