Here are 7 start-up steps if you’re thinking you might like to own your own business.
1. Are you ready to start?
Not everyone is cut out for business. If you’re thinking about going out on your own, sit down and work out if you really have the credentials. It’s very satisfying to be your own boss but it’s hard work and lots of it. And it’s full of risks that you need to be aware of because if you’re not ready, a dream can easily turn into a nightmare. And don’t go into business with a friend, unless you’re prepared to risk losing that friendship. That happens all the time!
2. Which industry?
I know most people never sit down and ask, “Now, I wonder what business I’ll go into?” We tend to have some love or passion beyond money that lures us into business. Everyone has met someone who has said that they wanted to open up their own special little café or restaurant, but before going into any business, there are some important points to consider:
- Is this industry on the up and up?
- Who are my rivals and how will they react to my start up?
- Am I special enough to survive if they really take me on and start a competitive war against me?
- Should I buy an up and running business or start from scratch?
- Would buying a franchise (e.g. a Boost Juice or F45 gym) be the way to go? You have less flexibility here but your chances of success because there are systems etc can be higher.
3. Investigate yourself
- How much money do I have?
- Do I need to borrow? How much? Would a bank lend me money?
- Am I asset rich or risky?
• Do I need training?
- Can I give up all my time to focus on my new business?
- What are my strengths and where do I need help?
- Will my family be supportive?
- Am I willing to invest all my time, money and energy for little return for some time?
4. Do the numbers
Add up the costs you expect to have to pay. All of them! Have a look at the different costs you could face e.g. bookkeeping, accounting, loan repayments, electricity, tax etc. Contact industry associations and government departments to get information about things you must do to get started. Then put a guess on any money that you think you can make and don’t exaggerate this. Wearing rose coloured glasses spells disaster down the track. And bear in mind that many small business operators can work around 80 hours a week!
5. Have a business plan
A good business plan is an invaluable source. Once you have one, revise it regularly and don’t forget to stick to it.
6. The right side of the law
Your next port of call is a solicitor or an accountant, who can advise you about your business structure (sole trader, partnership, company etc). They can help you register a business name, trade mark, etc. When seeking professional advice, always aim for the best, even if it costs you. Saving money at the expense of sound business advice is not a good move. Many small operators fail to understand that it’s not a cost but an investment in the growth of their business. Ask friends or family who they use, as it’s always good to get a referral.
7. Get a relationship going with a bank
Many start-up businesses use their own savings or run up credit cards to get a business off the ground but there will come a time when you need to get an overdraft or loan from a bank. See that as a sign of growth and success. And if you complete steps 1-6 , your bank manager will be like putty in your hands.
8. Register your business name & business type
In order to operate a business in Australia, you will also need to register your business name. You can search the availability of names through ASIC here. While you’re taking care of these fundamental administration aspects in setting up a business, you might also want to make sure the business name you’ve selected is available as a website domain. You can check their availability through a domain host like Net Registry, Go Daddy or any other host you choose.For tax & operational purposes, there are four different ways you might structure your business:
- Sole trader – one individual, simple structure, full control & liability
- Partnership – made up of 2 or more people who distribute the income or losses. It can also be 2 sole traders who join forces under one ABN.
- Company – more complex structure but it limits your liability because it’s a separate legal entity.
- Trust – a trustee is responsible for business operations.
Each different business type has different requirements and tax implications so definitely do your research to find out which would suit you & your operations best. You will need to register your business with the ATO & if applicable, you might also need to register for GST, which can be done here: https://register.business.gov.au/
So this is information for you to consider before you take that first step. A good tip is to get out and network. Most start-ups don’t have enough money to market themselves effectively, but a real or social media network is the best way to get known that is cost effective. You need to get people talking about you and the best way to start is to talk to them about what you’re doing. No-one can talk with more passion about your business than you so get out there and get yourself known.
Apart from running her own business for more than 25 years, Maureen has written several business books including Small Business Start-Up Guide published by Allen & Unwin.