Starting a New Business in Australia
Starting your own business is exciting, and a bit daunting at the same time. Your great ideas and energetic willingness to do whatever it takes to get going are tempered by all of the details. Your world is suddenly all about obtaining finances, proper licensing and adequate insurance. You need to become an expert at running a business, promoting it and growing it. When you take all of those tasks into account, it is difficult to know which direction to move in first. Take a deep breath, follow the steps below, and you’ll stay on track and keep your sanity during the early stages of establishing your business.
Are You Ready?
Starting a business requires much more than a fantastic idea and endless enthusiasm. It takes a great deal of time, energy and resources to get a business off the ground and on the way to profitability. Having a romanticised idea of what it’s like to be a business owner, without a clear understanding of what it really takes, is a recipe for disaster. Before you take the leap and invest too much time and money, ask yourself the following questions to determine whether you’re ready to move forward:
- Do you have enough industry knowledge and experience?
- Do you enjoy, and even thrive on, being challenged?
- Are you disciplined and motivated, even in tough times?
- Are you comfortable with making your own decisions?
- Are you prepared for long hours, and no free weekends – at least in the early stages?
- Do you have sufficient income or savings to pay your way?
- Do you have a support group of peers, family and friends?
- Are you willing to learn new skills to effectively run your business?
- Will you ask for help from professional business advisers?
- Are you willing lose the time and money you have invested if you don’t succeed?
If the answer to any of these questions is ‘no’, starting a business might not be right for you at this moment. Re-evaluate your situation in a few months and see where you stand. However, if you’ve answered ‘yes’, to all of them, you’re ready to get started.
Research Your Ideal Business
Entrepreneurs usually start businesses based on their own interests and deep passions. The truth is, you need more than passion and excitement, you need hard data. It’s vital that you do some market research to assess the viability of your idea. After all, you are starting a business to become profitable, and that requires an unbiased look at what the market is like. Here are a few things to look at to get you started:
- Industry Research – What’s happening in an overall sense across the industry?
- Competitor Analysis – Who are they? Where are they? How will you differ to them? What is their price point? How well are they doing? What are their challenges?
- Customer Analysis – What are the demographics? What problems/challenges do they face? How can you meet their wants/needs?
- Financial Analysis – How much can you expect to make, on average? What will your average expenses be? How much can you invest? How will you fund growth beyond your investment?
Once you’ve determined your strengths, weaknesses, opportunities, and potential threats in this manner, it is easier to determine your niche. It also helps with the next step of the process, which is to prepare a written business plan.
Write a Detailed Business Plan
Once you’re quite sure that your business idea is viable, you can get down to all of the details about its operation. It’s basically an instruction manual for you to follow as you begin to build. It is also an extremely helpful tool when applying for funding at a financial institution. It is important that your detailed business plan includes the following points. Keep in mind that you may need more, or less information depending upon the business type:
- Executive Summary – Generally, this is the part of the plan written last. It is a summary of the entire plan in a short, concise manner. It must be clearly written, and persuasive. Tell your story, and your vision for the future as vividly as possible in two pages or less.
- Detail Your Company – Company history, plans for the future, company culture and organisational objectives are also good information. Will your business structure be Sole Trader, Partnership, Company, Trust, Co-operative or, an Incorporated Association?
- Introduce Products & Services – Explain your products or services in easily understood language. Point out your unique selling point and competitive edge. Provide information about products/services that are in development such as the stage, opportunities, and vulnerabilities.
- Market Analysis – Detail as much information as possible such as the size of the overall market and your prospects within it. Is the market developing, growing, mature or, declining? Who are your competitors and what is their market share? Who are the target customers? What are the challenges, risks? What are your future projections for the market and company?
- Marketing Plan – Once you understand the market, your potential customers, and the competition, it’s time to get the word out about your business. You must determine how large your sales force will be, the strategies you’ll use for each market, and how to communicate how your offering differs from the competition.
- Operations – Explain where you’ll source materials, how your production facilities will work, how you’ll handle logistics, and any other relevant information. Also, detail how you’ll go about research and development of new products and services here.
- Employees – Determine whether you’ll have employees and how many. Lay out your procedure for recruitment, hiring, onboarding and retention, and how you’ll pay their salary and superannuation.
- Management – This is where you’ll introduce your management team if you’re applying for a loan or funding. Describe their background, training, and experiences. Investors will take this information into account when determining whether they feel comfortable investing or not.
- Financial Projections – Take a realistic look at what you can expect to make versus your costs. Use your previous market analysis and competitor evaluations to determine your potential, and project out three to five years. Detail what you expect, and how you’ll accomplish your goals.
Remember that your business plan isn’t just a document you use in the beginning, it’s your daily guide. Refer back to it often to ensure you’re on track, and make adjustments along the way to improve what you’re doing. In fact, it’s a good idea to revisit your plan periodically to tweak it for the current situation.
Get Your Finances In Order
Starting a business requires capital, sometimes substantial amounts of capital. It’s vital that you remain fluid, especially in the first few years of operation. If you’ve done the proper research for the financial section of your business plan, you have a good idea of what you’ll need. Be realistic, don’t think you can operate on a shoestring budget and make it. One unexpected expense and you could be in real trouble, so make sure you have money in reserve. Some common ways to fund a business are:
- Personal Savings – A limited option for most people. Simply gather up your personal funds, and invest what you have.
- Private Loans/Gifts – Bring in family, or friends, with capital to invest. Create a partnership, or other agreement in exchange for the money.
- Bank Loans – You’ll need to have good credit, and a solid plan if you plan on taking out a traditional bank loan.
- Business Grants – Australia offers a huge variety of both government and non-government grants for entrepreneurs. It’s a great way to get started.
Promote Your Business
You’re excited to open, and you’ve gotten everything taken care of and now is the time to start promoting your new business. There are a plethora of ways to do this, especially in the digital age. It’s a good idea to start local, letting everyone know you’ll be part of the community. Outdoor signs and other public notices are a great way to start. Here are some other promotional activities that will help get the word out:
- Get A Website – Having an online presence is an absolute must. If possible, use your company’s name as the URL, such as ‘mynewcompany.com.au’, as it aids in branding. There are a plethora of places online to create a cheap website, such as Wiix, if you’re a little tech savvy. If not, consider hiring a professional/ a digital agency to create one for you. Keep the design simple and clean, and include useful, relevant content for both customers and prospects.
- Get Social – Social media is fast becoming one of the best ways to engage audiences, improve brand awareness and promote products and services. Set up appropriate social media accounts on platforms like LinkedIn, Facebook, Instagram, or Twitter to start. Monitor your engagement and focus on the channels that get the highest response rates.
- Outbound Marketing – Traditional newspaper, television, and radio advertisements are a great way to broadcast your message to a large population in a short time. You may also want to consider mass letterbox drops to specific areas to introduce your company with a special offer.
- Inbound Marketing – Inbound marketing can include creating useful, relevant content that engages readers, and optimising your website so it appears when users search relevant keywords/ search terms. Its focus is on helping people solve problems and establishing the company as a trusted authority. Industry, or product, specific articles, blogs, eBooks, guides, and videos all attract attention and can be a great incentive to offer to help generate qualified leads for sales to follow up on with phone calls or emails.
The decision to start a business shouldn’t be taken lightly. There are a multitude of different things to think about and plan for. That begins with thorough research into the market, a well-thought-out, written business plan and marketing approach. As your company grows, your needs will change, but these basic guidelines will remain as important in ten years as they are today.
If you’re ready to take the plunge and start your business, and you’ll have employees, join Nationwide Super. We’re the superannuation fund here to look after the millions of people, just like you, who run small businesses right around Australia.