2 July 2019
So you’re going to start a business. Congratulations!
You’re going to be congratulated far and wide, acclaimed as ‘entrepreneurial’, and ‘self-made’. You’ll feel pretty good about yourself there and then, but when you’re alone, you’re not feeling so enthused. You might feel nervous, regretful, or fearful.
Nobody taught you how to run a business.
Nobody tells you that running a business is draining, gruelling, and you’ll want to give up sometimes.
What they do tell you is that, ‘You can be master of your own destiny. You never have to answer to anybody again. There’s no cap on your salary.’
You’ve got to be wary. Whatever your reasons for being in business, a sure fire way to end up Out of Business is to make assumptions, like, ‘This will be easy’, or, ‘I’m sure somebody will let me know if I’ve done my tax wrong.’
The really good news is that there’s no secret sauce to running a business. It’s not that scary, and there’s no-one out the making sure you’re adequately experienced before opening many types of small businesses. This guide is here to give you some of the ‘basics’ that nobody taught you about. It’s not exhaustive, and it’s not a virtual MBA. But it’s a start.
Before you dive head-first into your new business, take some time and do some planning.
Generally, you don’t need a two-hundred page business plan, unless you’re getting a loan or investment. A one page business model is easy, quick, and will provide you with a starting point from which you can learn from and make changes. I recommend Ash Maurya’s Lean Canvas (watch the short tutorial HERE and then design your one-page business model HERE).
A good one-page business model will help identify and address risk in your business, for example, you might have a good product, but you don’t have a point of difference from your competitors.
Each section of the business model must be studied so it can be optimised. For example, what is your product? If you’re opening a sales coaching consultancy, document exactly what it is that you’re offering and the process for delivering your product.
A notable area of your model will be the marketing sections: customers and channels. Understanding who your customers are and how you’re going to reach them should take you some time. Starting a business from scratch is tough and those first few customers are vitally important.
There’s no better way to know if your product is enough to base a business on than by testing it.
Go through your contacts app and put together a list of people whose opinion you value and that you trust to be brutally honest, and ask them to be a guinea pig for you. Bonus points if the test subjects are in your target market! Their feedback will be doubly important in that case, and you might score your first customer. Sales isn’t the goal here though – remember to explain that it’s a test and you’re not yet in business.
Do you know where to find help if you need it?
There are many business advisory services (free and paid) in most locations around Australia. If you’re in a particularly rural area, get in touch with your nearest Business Centre (a great local example in our area are HTTP://WWW.BUSINESSGROWTHCENTRE.ORG.AU/) or startup business incubator (like OURS) if your business is up and running but needs a little push in the right direction.
Business support and advisory services are also found in Governmental and NFP spheres. A quick Google search for ‘Business Support [Your Location]’ will help you connect with any nearby services.
Additionally, your accountant (which you may or may not have yet) should be a great source of information for you. A good accountant can be the difference between harsh failure or rapid learning and growth in the early days of business. In the Lower Hunter Region in NSW, we recommend GROWTHWISE and VBD.
AusIndustry and Jobs For NSW are two great examples of government agencies who exist to help businesses get off the ground. They may have some grants available for businesses like yours, or might be able to provide you with ideas if they can’t help.
It’s not just government agencies who offer grants though. Often universities, councils, and large corporates put some cash up for grabs for the right business. An example is Beyond Bank’s COMMUNITY ENTREPRENEUR PROGRAM, which offers up to $50k to entrepreneurs benefiting their local (regional) communities.
It pays to network and have your ear to the ground!
An accountant, a solicitor, and an insurance broker.
Paying these service providers SUCKS when your cash flow is slow, but believe me, you’ll be even lower on cash without their advice and services. It’s helpful to consider these services as an investment. Your asset (i.e. the business) will be worth more money in the future as a result of this expense.
Shop around for the right service provider, but if you can afford it, don’t skimp on these guys. Every one of them can and will save your ass if you’re inexperienced, and even if you know what you’re doing, they are a valuable string in your bow – a great resource to call on when you need them.
You’ll need to choose a business structure here that best suits your goals and immediate needs. THIS is a great starting point, but especially if it’s your first time running a business, we recommend that you discuss this with your accountant and/or solicitor. Once you’ve decided upon a business structure…
It’s boring, it’s unsexy, and it can be another annoying cost, but complying with business law is totally necessary. It’s also probably the main anxiety-inducing element of going into business, because it’s not widely taught. These boxes are essential to tick before going into business in Australia:
There are many different ways of managing your books. You don’t need a massive ledger, and you also don’t need to purchase Xero right away. At such an early stage, you’re going to be the one doing the books, so choose a system you’re comfortable with, that will make it easy for you to meet your taxation (and other) obligations.
This is a great article outlining some of your options and the difference between each bookkeeping method.
Days 30-60 can really be broken into two sections: learning and doing.
You’re going to try a lot of things. Some will work, some won’t, but your mindset needs to be an experimental one. This applies to almost all aspects of operating your business: from marketing, sales, customer service etc. You should see which activities or processes get you the best results, and make that your priority for the next iteration.
For example, marketing your product on social media (a nice, cheap way to start targeted digital marketing) might get you no returns at all, but Google AdWords gets you great results. While you shouldn’t necessarily forsake social media during your next marketing campaign, you should divert more funds into AdWords, as your Return on Investment will probably be higher.
You will also be spending a large chunk of your time doing what (hopefully by now) you’re being paid to do. Your product/service is the most important aspect of your business, and should be treated accordingly with regards to time spent and energy expended.
However, think about the best massage you ever had. What made it so great? Was it the way your masseuse worked your muscles? Or was it the other factors (candles, ambient music, incense) that made you enjoy it that much more than the second-best massage you’ve had?
Whatever your product/service, there’s probably many other people doing the same thing, and most will be better than you, at least to begin with. The supporting activities (value delivery, customer service, branding, after-sales service etc) of your business are a good way to differentiate your business and help you gain a foothold in the market. Don’t spend 100% of your time working IN your business, while forgetting to work on your business.
Rinse and Repeat!
Learning is going to be vital to your success, so make sure that when you try something new, you make a mental note of it so you know whether to repeat that or not. Your support services (accountant, advisors etc) are there to help you. Make sure you make use of them!
Keep your eye out for business development opportunities, and pretty soon you’ll need to know how to employ your first helper!