Did you know more than 60 percent of small businesses in Australia cease operation within the first three years?
While statistics like this can discourage even the most determined entrepreneur, seeking professional advice and having a solid business plan will make sure you are on the right path to success.
To ensure you don’t become another statistical failure here is my advice for starting a new business – in just four easy steps.
1.Research Your Market
Researching your market is essential. If you don’t do the research how will you know if your idea is going to work?
There are a number of important questions you need to think about when conducting your research. This will help you work out if your idea is feasible.
The four key questions you should be thinking about are:
- Who are your customers?
- Who are your competitors?
- Is there a need for your product or service?
- What can I offer my customers that others don’t?
The last question is particularly important because you need to find your niche.
There is no point offering something that is already offered by others – particularly if there is already a high level of competition. You can’t compete with multiple businesses who have a long list of established loyal customers – unless you are offering a better product or service.
By defining your competitive advantage you will have your unique selling point. Your hook for attracting business.
2. Make a Plan
Once you’ve researched your market it’s time to write you business plan.
If you are going to need finance then it’s likely you will need to present a business plan to your financial institution. It will also help you understand if your business will be successful and make a profit.
There are many online references that you can use to help you structure a business plan.
The Australian Government provide advice on how to write a business plan, including a handy template outlining everything you need to include.
A business plan will help you get a solid understanding of how your business will operate, how you are going to market it and what your initial capital expenditure and monthly operational costs are going to be.
It should also include financial projections so that your financial institution can see if the loan you are requesting can realistically be paid back.
3. Seek Reliable Advice
Advice from your accountant, financial planner and solicitor will prove highly valuable at the outset.
Although the cost of good advice may be a concern there would be a significant cost if your business failed because you didn’t seek expert advice early on.
Make a list of questions you need to ask before you make the appointment. This will make sure you cover everything you need to know and nothing important is missed.
Talk to other business owners too about their secrets to success.
Aim to take away as much information as possible from your meetings before you embark on your business.
Your accountant will be able to talk you through your tax obligations and the costs associated with remaining tax compliant. They can also help you understand if your business plan will work – based on the costs you have outlined.
4. Ensure You Have Adequate Finance
Take the time to count the cost. Financial planning and budgeting are essential for any business.
Remember, in the early months of operation you will need sufficient cash to carry you through until your business begins to generate a profit.
Many accountants also offer financial advice. If yours doesn’t, find a financial advisor who can help you find a suitable loan. They will have their eyes across a number of financial institutions and will be able to find the best loan to suit your needs.
Dedication and Commitment Go A Long Way
As well as solid business advice and a sturdy business plan dedication and a positive can-do attitude are essential.
Starting your business will involve long hours and many personal sacrifices. If you are passionate about your business then you should be prepared to do whatever it takes. Even if that means less time with friends and family to begin with.
It also helps to have solid business management skills. So take a course if you need to. This doesn’t necessarily mean spending thousands of dollars on going back to school. Online tutorial sites such as Lynda.com have a whole host of courses for small businesses.
Setting up your own business is an exciting but scary prospect. But it needn’t be scary as long as you have sought the right advice and planned correctly.
Do You Need Advice For Starting a Business?
Batterham & Associates can help you set-up and finance your new venture. Your first consultation is FREE. Give us a call today to book an appointment.