Starting your business

10 Steps to Starting a Business

 

1. Be Patient!

Take your time. The worst-run businesses - and those most likely to fail - are developed as a spur of the moment project. Don't rush your business, and plan everything before you actually go and start.

2. Conduct a Self Assessment of your own Goals and Abilities

If you are going to be running your own business for the next few years, you don't want to do something you hate, don't understand, or aren't capable of doing properly. Work out your own strengths and weaknesses, what you're experience is in up until now, and what you would like to do. Set your own goals (ie "to run this business as a one-person operation for the next five years", or "to make $XXX a year") so that you know where you should be heading.

3. Buy, Start-up or Franchise?

Before creating a business from scratch, investigate the other options available to you. Buying a business, for example, is usually more expensive to begin with, but can provide established premises, equipment and customers. On the other hand, franchising is an alternative form where a company will sell you established products, operating methods, and cut out much of the leg work involved in starting up. Consider these options and ask your advisers if they are better suited to you.

4. Market Research

Before you begin, you need to know whether there really is a demand for your service, that your product is right, and that there is room for a new business in the market. You will need to thoroughly examine your competition, study the industry, and collect as much information as possible about your customers, products, pricing, industry trends, and production delivery processes. Take time to collect impartial and accurate information, not just feedback from family and friends.

5. Check the Statutory Requirements

There are a wide variety of laws that cover small business in Australia, and it is your responsibility to ensure that you comply with them. You should contact the Small Business Development Corporation's Business License Centre to determine what State and Federal licenses apply to you. The License Centre can also help you lodge a business name registration which is essential. Check with your local Council to see if they also have any by-laws affecting your business idea. These can relate to the type of proposed premises, zoning use, annual fees and advertising restrictions.

You will also need to adopt a legal structure for your business. This can be as a sole trader (where you have all the rights and liabilities), a partnership (where profits and responsibilities are shared), or a company (a more complex legal structure that owns the business and takes responsibility for it).

Don't forget insurance. Some aspects are compulsory (such as worker's compensation if you employ people, and third-party motor vehicle), while others are just good common sense (such as equipment insurance, personal accident and illness cover, and public liability).

If you employ any people, you will also have special legal obligations. These include an appropriate employment contract or award, taking out worker's compensation, occupational health and safety rules, keeping a wages book, and so forth. Research all aspects of your Intellectual Property you need to protect.

6. Locate Suitable Premises

You will need to have a business address. If this is at home, check that it's a suitable venue. If you intend to rent a building, proceed carefully. Make sure the premises are in a good location, suitable to your needs, and that you understand the lease thoroughly before you sign it.

7. Work out your Sums

You will need to know the following financial projections before you start:

How much money is required to start (for equipment and stock purchases, advertising, wages, insurance, leases, cars and other issues).

How much money you will need to borrow, and whether or not you will be able to obtain the money (either from funds you already have, or through a financial institution). If you can't, then you may have to reconsider your plans.

What your projected cash flow is for the next year.

The projected profit and loss for the whole year (this will show if your business is viable).

8. Plan Your Marketing

How do you plan to advertise your business? Sit down and work out the target audience (who really buys your goods). Where they are, and what is the best media for reaching them. Then work out how much this will cost, how long you will use the advertising, and what message you will put in it. Research online e-commerce and the advantages of your business on the internet.

9. Use Professional Advice

It is essential that you employ competent professionals who have specialist advice in key areas. These should include a solicitor (for any lease agreements, contracts of sale, or other legally-binding arrangements), accountant (for financial projections, record keeping, compliance with tax laws, and preparation of your tax returns), and your Business Enterprise Centre (for general management advice).

10. Prepare a Business Plan

This is a document that should tie all your work in the above areas together, lay out your plans for the future, and act as a blueprint for the future. A good business plan will show whether your idea is viable or not. It will also enable other people to give you useful feedback on the viability (or otherwise) of your project, and help financiers work out whether or not they will loan you any needed money.

 

For further information contact the Small Business Centre Peel on (08) 9582 0022 or email info@sbcpeel.com.au.