Five quick tips if you’re thinking about starting up your own business

So you’re toying with the idea of starting up your own small business - but you’re still uncertain about either whether to do it or how to go about it. Of these two possible uncertainties, resolving the first issue will determine whether you need to worry at all about the second issue. 

Although there is definitely some merit in the old adage to "follow your dreams", there is still a need to ensure that there is as much"head" as there is "heart" in your decision making  . Yes, you want to be doing something that you're passionate about - but you need to be able to pay the bills as well.

So here’s five quick practical tips that might help you, if you're contemplating the entrepreneur's path … And by the way, you might like to also check out the link Small Business Resources

1. .If you don’t have bucket-loads of grit and resilience in your character, then now’s not the right time for you to be looking at setting up a business.  It doesn’t matter how good your business idea is, the fact is that starting and running your own business will prove frustrating - and will inevitably challenge you to draw upon all of your inner resources. Yes, it can prove deeply fulfilling to build and create something from scratch – but there will be many periods of disappointment and stress. In the early days, there will likely be times of cash-flow strain, when you will be kept awake at night with the anxiety of worrying whether your monthly sales will exceed your monthly costs and expenses. It's a sobering statistic when you read that almost half of new businesses have "closed shop" within two years of opening…….. But if you are someone who is eager for the challenge of being your own boss, not easily discouraged, and if you are also  highly self-motivated - then read on ......
2. Be conservative when projecting your sales versus costs  Once you decide that you want to stop just dreaming and start exploring the real viability of your business idea, then it's time to put your business plan together and take a serious look at the numbers, It is wise to be a little conservative when developing your business plan and projecting future sales – rather than being wildly optimistic about revenue and thereby possibly over-committing on your early expenditure because of  an unrealistic expectation of strong sales.
3. Keep an eye on your competition. Who is already playing in your space … how will you differentiate yourself from them? …… Alternatively, maybe there are no current players and there really is a gap in the marketplace for your product or service. Perhaps nobody else has yet seen the problem for which you will be providing people with a solution ….. However, you still need to consider the potential cost or ease of entry for a new player in the future. In other words, were you to succeed with the commercialisation of your idea – even though at present there may be an absence of competition – chances are that others will eventually see your success and seek to copy what you do. So even after you’ve established your business, you’ve got to continue to learn, improve and innovate.
4. Selecting & registering your business name.  This is one of the most critical early decisions that you will be making. There are two schools of thought on how to do this. One option is to choose a “quirky” name that is different and therefore memorable for your customers. Examples of this might be Google, Apple or Bing. …… The other option is to choose a name that clearly reflects the service or product that you offer. For example Anderson’s Landscaping Services. This might also reflect that it is a family business. However it can be very effective to add a “local” aspect to your business name if you are going to particularly target a local market. For example, Bayside Gardening Services or Eastern Suburbs Engineering. If possible, align the domain name of your website with your business name – although this is not essential it is generally preferable to have that consistency. Within Australia, ASIC is the government agency where you can  check business name availability. Even if you intend to set up your business as a sole trader, you will likely be required to apply for an ABN in order to register your business name, after you've established that it is available (the ABN  on-line application is free - although a tax agent would likely charge you a fee to do this on your behalf).  In 2017, the annual cost of registration of a business name is $35. For creating your business website and selection of a domain name, Wordpress is a very popular and affordable platform for those who want to save some money and do-it-yourself.
5. Start small and test the market. You don’t necessarily have to quit your day job in order to test the viability of your business idea. Let’s say for example you intend to sell hand-crafted aromatic candles. Before taking out a long term lease on a store and setting up shop, you might first try selling them at local markets. Maybe you set up an affordable on-line e-commerce store and process your orders in the evenings after work. ……… Over time, if you discover that a steady demand for your product or service does exist and your sales clearly confirm the opportunity exists, then you might decide to commit to your business venture “full-time”. 

In closing, let me say from having started and run my own consulting business - Performance Development - for more than 25 years, it has been both a hugely rewarding yet at times extremely stressful experience. You might perhaps ask if I had my time over, would I do it again? ...... Absolutely ...... But whether it is the right path for you, will be your decision. By all means, consult with other people that you trust and respect - and consider their advice and suggestions. But ultimately it is going to be about what is right for you (and your family, if you are the main bread-winner)

Other relevant articles - "Mental toughness and running your own business" and "Avoiding seven common small business pitfalls"  AND here's a link to a great brochure that you can download from ASIC (the government agency that regulates companies in Australia) which offers good practical advice on starting up a new small business "Doing Business in Australia"

Being Your Own Boss: Is running your own business right for you?

Do you have what it takes to run your own business?

Hey, let’s not kid ourselves here. Yes, there are many benefits and rewards to starting-up and running your own business – that’s for sure. But there are also risks and stresses.

On the plus side of the equation, there’s the freedom of having more control over your working hours. There’s the attraction of making more of your own decisions and in some ways, feeling that you’re more in control of your destiny. And when you’re running a business that you’re passionate about- well, it doesn't even seem like “work”. You’ll be paid for doing more of what you love.

BUT it can be a rough and rocky road that you travel with many pitfalls, especially during the first year or two. Some studies suggest that more than 40% of small businesses fail within three years - however those business owners who had prepared a well-researched business plan were more likely to succeed.

But will you simply end up another statistic? …… Quite apart from your business idea - you've got to ask yourself if you've got the "right stuff". Here’s a sample of essential qualities that are needed if you’re going to make a go of it as an entrepreneur ……

1.      A vision that you’re passionate about - a dream that lights a "fire in the belly", that excites and energises you. You need to have a picture in your own mind of what your business would look like in 3 years; including the types of customers that you would be doing business with

2.      You’ve got to be a self-starter ……. If you are someone who needs to be told what to do, then becoming self-employed is not for you! …… Nor is there going to be anyone to motivate you – this is again something that will have to come from within. However as long as your vision is something that arouses excitement within you, then keeping this “in line of sight” should keep you energised. But you’ll need and determination to get out and actually turn ideas into plans and actions. You can’t be someone who will wait for opportunity to come knocking at your door – you’ve got to get out and create opportunities by knocking on plenty of doors.

3.      The successful entrepreneur in small business is one who is not only inspired – but can inspire others with their enthusiasm and conviction. In the early start-up days of your business, you won’t yet have a proven track record in your industry or a portfolio of clients to showcase that will give you authority. Instead it will be more about your ability to sell and persuade others to give you the chance to prove to them that you can deliver what you promise …… Whether these other people are potential investors or potential customers – can you sell your ideas?

4.      A willingness to keep on learning is essential. Quite often the person setting up a business will have particular technical expertise ….For example, you might be a highly capable mechanic, or hairdresser or website designer or plumber or software engineer. However there will be other aspects to running a business that you have to be prepared to learn. Whether it’s financial management and record keeping – or maybe  it’s sales and marketing – or perhaps it’s software that enables the planning and scheduling of work operations ……. There will be additional skills and knowledge that must be acquired along the way. There will hopefully come a time in the future where your small business has achieved a level of success and revenue that will then enable you to choose whether to outsource some aspects of the business operations. But in the first year or two, typically the imperative is to minimise your operating expenses – so you will need to be willing to wear many different "hats".

Let me add that I have been running my own business for some 20+ years - so it has been a long time since I have reported to another “boss”. Truth be told, I’ve become so used to being my own boss and being in control of my business destiny (well, apart from factors like the GFC that sometimes will throw a grenade in even the best of business plans) that I would find it very difficult to return to working in a corporate role.

My customers are my bosses in a sense – but I do have the added luxury of choosing to refuse to do business with a customer if I find them unreasonable or unethical.

I’ve no regrets about starting up my own business. Of course there are things that I wish I’d have done differently – one of them being that I should have found an experienced business mentor much earlier than what I eventually did ….. Another lesson was continuing to do business with a customer for far too long, despite not being paid. Yes, you can extend your credit terms with them – but not indefinitely. There comes a time when if they’re not paying their bill, then you’ve got to “switch the power off”. Hoping they will eventually do the right thing will not pay your bills.

So if you’re still wondering whether small business is right for you, check inside yourself to determine whether you’ve got the necessary passion, the drive and the desire to learn. But just as importantly is that you confirm your idea possesses the required commercial viability

However, maybe you're feeling anxious about the prospect of losing some job security if you were to become self-employed - so I would say this to you …….. Consider in 20 years’ time, how deeply would you regret not taking the risk? Would you possibly look back and feel disappointed that you didn't have more faith in yourself?

This does not mean that you ignore any of the risks – but that you weigh them up against what you stand to gain. And consider whether some of the risk factors can be mitigated and managed through more careful business planning. Whatever you decide to do, I wish you happiness and fulfilment.  And in the words of David Gemmell ....
“May all your dreams but one come true – for what is life without a dream”

More tips and resources can be found at small business management  f

And finally, one last short video on the theme of Lean Start-Ups - which is based on the principle of getting your product to market as soon as it is "workable" rather than being obsessive and waiting for "perfection". ... Technically minded entrepreneurs often want to keep adding extra features to their initial product design - which create further delays to market release. The idea of a lean start-up is that you can incorporate customer feedback as an iterative and ongoing process of product improvement, after release. 

About the author
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

How to start your own small business

So, you’re thinking about starting up your own small business?
 

Excited by the prospect of making money by doing something that you love? Perhaps you’ve been feeling frustrated in your current job, and are convinced that running your own business will provide you with the satisfaction you seek?
 
Or maybe the entrepreneur in you can see an opportunity, a problem that no-one else is offering a solution for?

Well here’s a few of the most essential things you need to know about starting your own business ....
  

• Consider both the upside and the downside  

Yes, running your own business can be very rewarding. It offers you the freedom to be your own boss, the autonomy to make your own decisions and the satisfaction of building something that you are proud of. There are many people who make a lot of money successfully running their own business – they end up making more money than if they were working for someone else. Not only are they doing what they love, but they are able to eventually enjoy a lifestyle that would otherwise not have been possible.

But you can't close your eyes to the potential downside. There are just as many people in small business who do not succeed and end up walking away disillusioned, disheartened and having lost money. Sometimes it’s because they’ve gone into business with strong technical skills (ie. they’re a great plumber, a great chef, or a great mechanic) but completely inadequate commercial skills necessary for running a profitable business.

• Common pitfalls

One of the most common reasons for small business failure is a lack of preparation ….. people suffering from a romanticised view that it will be an easy path to riches. They neglect to undertake proper market research, ignore the risks, over-estimate demand and jump too quickly into over-capitalising their business. They get excited by their idea and can become impetuous in their actions. They spend too much money too quickly – for example over-committing to leasing premises or purchasing equipment, instead of trialling their idea and putting their toe in the water first.

• Be prepared for hard work

Talk to anyone who has been running their own small business for a while, and they will all say that the first 18 months is hard slog. There are long hours and more than a few sleepless nights.  It will draw upon all your reserves of stamina, self-belief and determination to succeed in building a customer base and proving that you can consistently deliver on your promises.

If you find after 18 months that your business is providing you with a reasonable standard of living and that your revenue is comfortably exceeding your costs – then chances are that you have indeed found the ingredients for achieving sustainable business success and business growth

The point here is to make sure that you are seeing the thorns as well as the roses when thinking about going into business for the first time. Recognise that it will take hard work, but if you’re doing what you’re really passionate about then you won’t begrudge it.

• Assess the viability of your idea

Invest some time and thought in preliminary market research. This is a crucial step in helping you determine the viability of your idea. Finding answers to questions such as

-        How do I know there is sufficient demand for my product or service?

-        What is the level of competition ….. is demand greater than existing supply, or is it a crowded market and there are more suppliers than demand?

-        How would I be able to differentiate my business from competitors – by doing it better, doing it cheaper or doing it differently in some way?

-        What would be all of the costs associated with developing and delivering the service / product – and what would I be charging? ….. How many sales would be necessary to cover costs? ….. How long would it likely take before the business was generating that volume of sales? …. Do I have a sufficient reserve of funds to cover any shortfall – or would I need a bank loan?

-        What are the risks? ….. what would be the impact and the likelihood of things going wrong? ……  is there anything I can do that would mitigate these risks

-          Are there any government grants for which my business could be eligible?

Nothing is ever risk-free. What’s important however is that you’re aware of the risks and that you judge you can comfortably live with them if you can’t find a way to manage them.

• You’ve got to feel ready for running your own business

There’s no point taking on a level of stress that will end up damaging your health or undermining your ability to apply yourself positively to building a solid business.

Maybe the time is not yet right for you to go down this path …….. Not for now doesn’t mean never. Timing is crucial and you’ve got to feel ready for the challenge within yourself.

You’ll probably never be completely free of doubts, but you’ve got to have a level of confidence, self-belief and drive that will outweigh the doubts.

 

• Can you test the water first?

Before you leave the security of your current job, you might just want to see if you can first test the water with your idea and try it out on a low-risk, part-time basis. 

Maybe your idea is writing e-books, or selling perfume online, or setting up your own handyman business. See if you can trial it in the evenings or on the weekends, so you can confirm there will be sufficient demand for your service or product, to make it financially viable for you to embark on doing it full-time (However, even if you are trading only on a part time basis you will still need to register a business name and obtain an ABN)

But once you’ve carefully completed your research and assessed the relative risk versus reward, and if you remain confident in the viability of your idea, then now becomes the time for bold action and taking the steps necessary to start your business.

• Choosing a business structure

You may benefit from gaining expert professional advice in selecting the business structure that is best suited to your situation. The options that are most common for a small business structure are as follows, but each structure carries with it potential advantages and disadvantages

i)            Sole trader: an individual trading on their own

ii)           Partnership: an association of people or entities running a business together, but not as a company

iii)          Trust: an entity that holds property or income for the benefit of others

iv)          Company: a legal entity separate from its shareholders

• Choosing a business name

The choice of a name for your business is one that you may be stuck with for a long time, so again it’s worth investing some thought to get it right. Although admittedly you can always later change your business name, this can have quite a disruptive impact on your brand. A name change can also end up incurring significant costs, through things like needing to have stationary reprinted and registrations updated……. So what do you need to consider?

Many business owners will advise you to look for a name that is easy to spell, easy to remember and gives potential customers an indication of what you do. Some small businesses will combine their family name in their business name – for example Thompsons Plumbing, Ashman Accounting, or Taylors Gardening Services ….. Others combine the area or region they service, such as Bayside Motors, Sydney Renovations or Eastside Landscaping

And then you have other businesses that go for short, quirky original names like Apple, Google, Innovate

You’ll probably have a few different ideas for names, so get some feedback from other people and test their reaction to each of the names as part of your decision making process. Your choice of business name will also be connected to how you want to position yourself in the market you are targeting and the type of image you want to project to your target market. For example, do you want to be seen as steady, reliable and safe – or is it more fresh, innovative and vibrant? What will hold appeal for your target audience?

Once you have selected a preferred business name, it can be wise to also check on the availability of the name to register as a domain name for your website. Although your domain name does not have to be the same as your business name, I believe this helps to strengthen your brand in the marketplace.

• Registering your business name in Australia

In Australia, you can check availability and register your business name online with Australian Securities & Investment Commission (ASIC). You will also need to apply for an ABN with the Australian Taxation Office. You will require an ABN if your business will be charging Goods & Services Tax (GST) and the ABN should appear on all of your invoices. An ABN is required before you can complete registration of your business name.

If this all seems a little complicated, get a couple of quotes from local Tax Agents as to what they would charge to complete it for you online. It's a fairly quick process to obtain an ABN for people familiar with navigating their way around the ATO procedures

Note that registering a business name is not the same as registering a company name. If you decide to set up your business as a company structure, the current ASIC fee for registering your company name at time of writing is $433. A company name has Pty. Ltd. at the end of it.

To register as a company, you can either attempt to do it yourself through the ASIC online portal (but it is somewhat complicated) or there are other commercial online services that help to simplify the process and charge less than $100 in addition to the ASIC fee. This compares to some accountants who will charge up to $1,800 to handle your company registration process.

If you do not decide to set up as a company structure, then the initial cost of registering a business name with ASIC at time of writing is $30.

There are subsequent annual renewal fees to maintain registration of your name as well.

And you may want to consider seeking to register the name as a trade mark to protect your business name. However there are strict eligibility requirements for gaining a trade mark and you might want to consult with an IP (intellectual property) lawyer. It is a common misconception that registration of a business name or domain name gives you exclusive use of the name. It doesn’t – only a trade mark registration can offer you protection of your name and logo.

• Your business plan

Developing your business plan will provide you with an important sense of direction. If you would like some guidance in how to prepare one, visit free business plan template.

This is where you establish written goals for each of the major components of your business, and set out some actions, time-lines and strategies for achieving your goals. The level of detail in your plan will be determined by whether you are writing it for yourself, or in support of an application for a government grant or bank loan (these will typically require a greater level of detail).

At its simplest level, your business plan defines the objectives of your business, the target market, your sales and revenue goals and projected major operating costs for the year (this becomes your budget). It incorporates how you will market your business and differentiate yourself from your competition, including any major advertising and promotional strategies. Your business plan answers the basic questions of who will buy from you, why they should buy from you (and not your competitors) and how you will efficiently deliver to your customers what they have bought from you.

Your business plan is something that you should continue to keep in your line of sight, because it will provide you with focus and help you to judge priorities during the year 

• In closing

I started my own small business more than twenty years ago. Although there have been many challenges along the way and with the benefit of hindsight, many things that I would have handled differently, let me say that I have no regrets about going into business.

I’ve found running my own business provided me with a level of satisfaction, freedom and independence that working in the corporate world never equalled. It’s not suited to everyone, and only you can judge whether it will be right for you. Anyhow, hope you've found some useful tips here on how to start your own small business

Related articles include - Setting up an online business and Small business tips

Video : Registering your business name

In the following short video clip, the speaker explains some of the early steps in selecting and registering your business name. By the way, there are many different suppliers for seeking to register a business domain name - as well as the company that they are promoting in the video

 

Copyright 2013. Brian Carroll is the founder of Performance Development - a corporate training company based in Melbourne that delivers management training and leadership development services.