If you’re considering starting a business, there’s probably a million and one worries and concerns circling around in your mind. You’re not alone.
Starting a business for the first time can be daunting, with many worried about experiencing failure.
Despite once dreaming of becoming successful entrepreneurs, many never achieve it. Instead, they become burdened with excuses for why they couldn’t get started – not having enough money, time or resources, or procrastinating with other commitments.
Of those who finally get started, 60% of them fail within their first three years (Australian Bureau of Statistics). Not all that motivating, hey!
This is why our team have compiled 10 tips to help you to achieve success when starting your business.
Continue reading to find out…
1. Think Ahead & For The Long-Term
It’s easy for many new business owners to get caught up in the moment. They focus on the now, forgetting about their business’ performance in the long-term.
Many small business owners fail due to the following reasons. They:
- Base their business on a bad idea or bad business practices
- Don’t seek professional advice
- Lacked the right amount of working capital (Simply, they ran out of money)
- Didn’t undergo proper training
- Had no clear strategy or long-term plan
- Got so caught up with the dreamy idea of having their “own” business that they underestimated the amount of work, planning and time needed to go into it
To save yourself stress, tears and pain in the future (like these above), take some time to really think about what you’ll need to guarantee the success of your business. Such as the below:
- Is starting a business really right for you?
- Will it suit your lifestyle & family environment?
- Do you have the right personality and skills to run a business?
- Are you organised, persistent and resilient?
- Will your business be in an area that you’re experienced in?
- Do you truly enjoy what you do?
- Are you starting a business for the right reasons?
- Have you set realistic expectations (Predicted work hours, revenue and commitments)?
2. Do Your Research
Tip #2 – Actively research your market and your customers before starting a business.
Before launching any business, you must understand who you’re trying to target.
Analyse your business concept, your competitors and your own skill set so that you can ensure that there’s a demand for your product or service. Identify any strengths, opportunities and challenges you may experience within your industry.
Consider how you’ll differentiate yourself from other similar businesses in your industry? Will it be by providing exceptional customer service? Out-pricing the market? Or by providing a new unheard-of product?
Regardless of what you think your competitive edge will be, take a few hours out of your day to do some research.
3. Have an Achievable Plan
Developing a plan for your business is critical and is one of the most valuable activities you can undertake.
A solid and well-defined plan will help to give you direction as your business develops, defining your objectives and how you plan to achieve them. You can also note down any marketing ideas and costs of start-up.
As a new business owner, it can take time before you start earning a steady income. Sorry to burst your bubble, but it’s highly unlikely that you’ll be a Millionaire, sailing your private yacht around the Caribbean after 1 month of launching your business.
Growing a business takes time and HARD work! So, plan for it!
Save yourself from setting unrealistic expectations and ultimately, stress and disappointment in the future.
4. Set Aside Sufficient Capital For Your Start-up
The most important point of them all – DON’T go into business if you can’t financially afford it.
Don’t try to go out on your own if you don’t have enough money to start (that is, without borrowing heavily and incurring hefty repayments). Otherwise, you will run out of cash.
For those thinking of starting a business, it can be a good idea to continue working your day job as you develop your business on the side. This way, you can gradually transition between the two; able to quit your day job as you start receiving a healthy inflow of cash from your side-hustle.
Also plan for the worst case scenario. If things don’t work out, what would happen?
Will you need to get a job and fast? Will you need to temporarily live with your parents? Or maybe you’ll just need to sacrifice some of the comforts you’re used to?
Before you launch, figure out how you’d get by if things went south and create a succession plan – just in case.
5. Allow for Start-Up Costs
It’s a common occurrence for newbie business-owners to underestimate the costs of starting a business.
As accountants we’ve seen it all! Particularly, the solemn faces of those who didn’t plan or budget accurately for start-up costs, having to significantly eat into their capital, or draw down on their home loan.
Here is a list of the most common expenses that newbie business owners incur in the start-up phase.
This should help to give you an idea so you can factor these into your budget and business plan.
Business & Finance
- Accounting, Bookkeeping & Tax
- ASIC Fees
- Business Advisory, Consulting & Planning
- Legal Fees
- Insurances, Licences, Permits & Tax Registrations
- Trademarks and Patents
Marketing & Promotion
- Market Research
- Advertising, Marketing Materials & Printing (Brochures & Website)
- Branding (Logo design, Letterhead, Signage & Business Cards)
- Association Membership Fees
- Business Subscriptions
Office or Shop Expenses (If relevant)
- Opening Stock
- Shop Fittings & Security Systems
- Office Equipment – including printers, scanners, phones
- Office Furniture – desk, chairs, filing cabinets, shelving
- Stationery & Office Supplies
- Computer Software & IT
- Installation of Phone Lines (or a mobile phone)
- Premises Lease & Bond
- Electricity, Gas & Phone
- Credit Card Establishment Fee
- Loan Establishment Cost
- Work Vehicles (if used for the purpose of business)
- Plant & Machinery
6. Choose the Right Business Structure
A key component of starting your business is to determine which structure is best for you. Should you be a Sole Trader? Partnership? Company? Or a Trust?
To determine which structure is best, your personal circumstances and who will be the key operator of the business will come into play. This is because the business structure you choose can impact:
- The registration process you need to undertake;
- Your tax position;
- The safety of your personal assets; and/or
- The continuity of the business upon change of ownership.
Before making any decisions about business structures, have a chat with your Accountant.
7. Protect and Insure Your Business
To help protect your business and minimise exposure to risk, it’s important to have the right insurances and to put systems in place to protect your business’ intellectual property.
This could involve getting Trade Mark or Domain Name Protection and Insurances for personal injury, income protection, public liability and professional indemnity.
Although these are the most popular insurances, there are others that could relate to your business and/or industry.
We can refer you to an excellent insurance broker to assist with this.
8. Remain Focused On The Customer
Your customers are your most important asset – especially as you look to grow your business. Given, they will be the ones buying your products or services, their feedback and preferences matter significantly.
By effectively understanding your customers’ wants and needs, you’ll be able to improve your sales and profitability, build stronger relationships and create unique experiences that keep your customers coming back.
Adopt the mindset of producing something to solve a customer’s problem, rather than just creating something for the sake of it or because you think it will sell. Fill a hole and add value in your market or niche.
Satisfy a demand. This is how you will make your money!
9. Keep Good Records
Good record keeping is essential for anyone in business – regardless of the stage you’re at.
Having organised and traceable records will make it easier for you to meet your tax obligations and track how your business is performing year on year.
With good records you can monitor your business’ health, analyse your cash flow, and demonstrate your financial position to lenders and other businesses.
As your accountant, we’ll help to outline what you need to keep for tax purposes and your reporting requirements.
10. Seek Professional Advice Before Starting a Business
Before launching your new business seek professional advice from people within your industry as well as your Accountant.
At Knox Taxation and Business Advisory, we offer both Business and Tax advisory services to assist you in successfully starting and growing your new business. We can also refer you to our partners to assist in other areas such as Insurance, Mortgages & Lending, Marketing and Legal Services.
Our mission it to help your business to thrive, boost your efficiency, and give you insights into your business performance – whilst avoiding paying too much tax.
Our trusty team of our Accountants will help you with:
- Business & Tax Registrations
- Tax Planning & Compliance
- Business Structures
- Cash flow projections
- Bench marking
- And what Expenses you can claim in your Tax Return
As you take the leap of faith towards becoming a new business owner our team will be there to support you.
If you’re interested in coming in for a consultation to discuss your business idea and to explore potential start-up costs and tax considerations, give us a call on (03) 9762 7344 or click the “Book an Appointment” button at the top of this page. Alternatively, send us a message through our Contact Form.