More and more Australians are starting small businesses. According to the latest stats, new business registrations increased by more than 15% during the last financial year.
If you’re thinking of joining the ranks of Australia’s more than 2.4 million small business owners, here are our top 8 tips.
Tip 1: Make sure your business will solve a problem
Instead of thinking of your business as a product or service that you’re trying to sell, describe it in terms of the problem you’re solving for your customers.
And if you can’t do that, maybe you haven’t got a viable business.
If you can do that, it should give you good ideas for the key marketing messages you should use when you’re promoting your business.
Ideally, your business idea should solve a problem at least as well (or better) than any other business can. If you can do it better, you’ll have a competitive advantage that will set you up for success.
Tip 2: Make sure the financials stack up
It’s all very well coming up with a great idea and having plenty of passion for it, but to start a viable business, you must have an idea that stacks up financially. That means you need to be able to create, sell and deliver your product or service for a profit.
Do up a budget of your expected business revenue and all your expenses. Make sure it’s realistic. It’s better to be too pessimistic rather than too optimistic.
Tip 3: Do up a personal budget
If you’re going to be relying on your business as your sole (or major) source of income, it needs to be able to sustain the lifestyle you lead (or want to lead). This can be a challenge in the early days until your cash flow starts humming.
Do up a personal budget to help you get through these early days.
If you can, don’t give up your secure day job entirely until you’ve proven that your business is financially viable for you — that way, you’ll have a job to fall back on if your own business doesn’t work out.
Tip 4: Make sure you’re legally compliant
Whatever product or service you want to provide with your new business, make sure you’re legally compliant from day one. This can include simple things like applying for an Australian Business Number (ABN) and registering for GST if your turnover will be more than $75,000, through to making sure you pay staff the right amount if you’re going to employ people.
Tip 5: Seek advice
This advice could come from a range of sources, including:
- potential customers,
- an accountant for setting up the right business structure from day one, and
- other business owners.
Tip 6: Keep things as simple as possible
This is crucial, especially in the early days when you’re still establishing your business systems and processes. The saying ‘you need to walk before you run’ certainly applies to starting a business.
Keep things as simple as possible to help make running your business easier. You can get ‘more fancy’ if necessary as you gain more experience in your business and find out what works and what doesn’t.
Tip 7: Embrace lifelong learning
There’s an old saying that the only certainties in life are death and taxes. In today’s business environment, you can add ‘change’ to the list. One way to cope with rapid and constant change is to embrace the concept of lifelong learning. That means taking opportunities to learn and keep your skills up to date so that you can stay on top of any changes that happen in your industry.
If you do, you’ll be able to pivot, adapt to and capitalise on those changes faster and better than your competitors can.
Tip 8: Have a plan B, just in case things don’t work out
The most recent stats show that nearly 50% of small businesses in Australia don’t survive for more than five years. It’s important to be aware of that before you start and to have a plan B in place just in case.
When you’re running a business, managing cash flow is essential to keep your business operating. Earlypay specialises in invoice financing, or asset finance arrangements — and you don’t need a long trading history, so it can be great for new businesses! To learn more, please contact our friendly team on 1300 760 205 or [email protected].
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].