Are you looking to start your own small business in Australia? Concerned about taking the right first steps to guarantee the success of your small business? Below are seven top tips to help you start your small business on the right foot!
1. Research Your Business Idea
Your business idea is the core of your business. Depending on how marketable your business idea is and whether there is sufficient demand for your business’ services, your business can succeed or fail before it even starts.
To ensure that your business follows the former path rather than the later, make sure to take the time to research your business idea. Fine tune it and clear up the basics, such as what consumer problem your business will solve, why people will buy from or work with your business and how much your business will cost you.
In addition to researching your business idea, it will also be beneficial to research your competitors – particularly those that have been in the industry for a long time and have developed a brand name for themselves.
How will you compare to your competitors and what will incentivise customers to work with your business rather than your competitors’? These questions are ones that you should answer before starting your small business.
2. Plan Out Your Business Structure
Before starting your small business, you will also need to choose your business’ operational structure. For example, are you planning on starting a business on your own as a sole trader, or with another person as a partnership? Will you go straight to hiring employees as a limited company?
It is important to decide how you will structure your business as this choice will affect your later startup costs, how your business will be taxed and whether your personal assets are at risk if something goes wrong in your business.
3. Take Care of Your Legal Obligations
You will need a registered Australian Business Number (ABN) before being able to legally start and run your business in Australia. You will also need to create a business name, and register it with the Business Registration Service. You should also consider trademarking your business name to protect your intellectual property and ensure your business’ name is yours alone.
Depending on the type of business you are planning on starting, you may also need to obtain additional licenses, permits and registrations. For example, if you are starting a food business in Australia, you will need to obtain a food business license from your local authority (usually your council).
4. Settle on a Location
You can run your small business from a number of places. If you are offering online services as a sole trader, your home may be the optimal location for you to start your business from. If your small business is a partnership, renting an office space may be more beneficial instead. It is important to settle on a location before starting your business as it may affect your overall expenses.
If your small business is a food or retail business, determining your storefront’s physical location before starting is even more important. Make sure to research the demographics around your location and whether there will be customers interested in your business’ food or products. Also, be mindful of the competitors around your business’ physical location and their customer base.
5. Prepare with Business Insurance
Insurance is an important factor to consider, especially if you are starting a small business for the first time and have many assets which need protection. For example, if your business uses expensive equipment, paying for insurance coverage on your equipment may save you on costs in the long run if your equipment breaks.
Protecting your business assets with insurance will also limit your financial liability and prevent you from having to pay unplanned out-of-pocket fees.
6. Work Out the Numbers
One of the most important steps to take before starting your small business is to work out the numbers. You can’t get your business off the ground if you do not have sufficient funding. The research you have gathered around your business idea, your business structure, location and insurance should give you a general idea of how much your business will cost to start and keep running. It’s a no-brainer but make sure you have sufficient funds to start and keep your business running, or you have reliable investors to help you do so.
7. Learn How to Manage Your Finances
Similar to the point above, not only do you need to work out the numbers before you start your business, you also need to be aware of the funds you need to keep your business running. The best way to do this is to learn how to manage your finances.
You can learn basic bookkeeping yourself – however, if you are finding it difficult to record your business’ financial transactions while also keeping up with your tax obligations, an accountant may be able to help. Accountants use specialized software to help you manage your finances and will save you time as you focus on running your business.
Starting a small business in Australia is no easy feat – however, it is certainly possible to increase your chances of success by taking the correct starting steps. Follow the seven tips above and you’re sure to have an easy time starting your small business!