Starting a small business
Starting a business is no small feat. There’s lot’s to consider when deciding if your business is viable, and if it is, where to even start. This blog is here as a guiding light, with insider knowledge from accountants who have seen the in’s and outs of many businesses. We are here to help you make good decisions and flourish in your business journey!
So let’s begin.
How to analyse a business idea
Why are you here - what do you want to get out of your business?
A great place to start is to establish why you want to start a business — is it the flexibility and financial freedom, a passion, challenge, making a difference in the world? It's a big commitment starting a business so it's good to know why you're doing it and what you want to get out of it.
Who is the business for?
Who are you trying to help/target in your business? Knowing your customers is extremely important when considering if an idea will work. Do some good research to understand who they are, what they want, and what their needs are.
What's your products or services?
This sounds basic, but it’s key. If you’re a service based business, what are you offering/not offering? Do you have set packages and prices for your services so you can save resources quoting all the time? If you’re product based, what is the RRP (Recommended Retail Price)? Understanding how much the product costs so you can make profit and cover your expenses and taxes is very important.
Know your industry and competitors
Knowing who is in your industry and even your local area will help you position your business. This is important as you decide what is different about you and why people would come to you rather than someone else.
Do you have access to the money you need to start?
Whether you need an investor, or you have some savings, it is important to have the finances you need to start and to have a clear budget of what’s required to get the business off the ground.
Set up your business right
1. Get Advice!
Good, sound advice from a professional really can be a make or break. Chat to an accountant that offers business advisory services. It’s so invaluable to have an overview from the get go of what is required to succeed. Not only that, but you’ll have someone on your side in the future, so when it comes time to pay BAS, or lodge a tax return, you know who to call.
Wondering what the benefits of a good accountant are? Check out our blog: 11 benefits of having a good accountant for your business and life
2. Set up your business structure
Getting your business structure setup correctly is important for many reasons but especially for tax and liability. Whether you’ll be a sole trader, company or trust—be sure to setup the correct structure for you.
For more info on business structures, check out this article from business.gov: Business Structures and Types
3. Register for an ABN
You can register your free ABN through the Australian Business Resister (ABR). This is your number that customers, suppliers and the ATO use to identify your business.
4. Register your business name
If your business name is different from your own name, you’ll need to register it. It is important to know if your name is available to use legally, as someone else may already be using that name. You can register and check name availability on the ASIC Website
5. Tax Registration for your Business
Taxes vary from business to business depending on what entity structure you register your business under.
- Tax File number (TFN) — Regardless of the business structure you have, all businesses need a TFN. If you are planning on running a business as a sole trader, you can keep your individual TFN. If you are a company, partnership or trust, then you will need a business TFN seperate to your personal one.
- Goods and Services Tax (GST) — GST is compulsory if your business is earning $75,000 or more. If you are not expecting your business turnover to be over that amount when you first begin, you can hold off registering for GST. For non-for-profit organisations, GST is compulsory once your turnover is $150,000 or more. You can register or find out if you need to here.
6. Licences & Permits
- Are you offering a food service or do you need some other license to provide your product or service? It is important to know what you need to ensure you legally can run your business. Find out more information or register for licences and or permits here.
7. Trade Marking
- Protect your business or other IP by trademarking your name, logo or product etc. This means you will have exclusive rights and no other business can encroach on your trademark. Learn more or apply for trademarks here.
Plan your business
1. Create a business plan
Having a good business plan will help you stay focused and prioritise what needs to be done to succeed. It can also help you assess risks that could negatively affect your business. If you are wanting to apply for a business loan from a bank or finances from an investor, they will often require a business plan to see how you will be using the funds to generate revenue. You can download a business plan from the Australian Business site here. If you would like someone to look at your business plan, our team of business advisors would love to sit down with you to discuss. Get in touch if you’d like to book an appointment.
2. Pricing Strategy
A pricing strategy is a model or structure you use to determine how you can price your product or service. Knowing your bottom line and how much to put away for taxes will help you with developing your strategy. It is important to spend time developing and getting this right because if your prices are too high, you may struggle to sell, but if they are to low, you will struggle to meet your expenses and make profit.
For more info on pricing strategies, check out this article from business.gov: Develop a pricing strategy
Build your business (market and grow)
General overview of marketing your business
How will you bring your idea to market and launch it? There are many avenues you can take when marketing your business and it is important to do your research and use your money wisely. Do some research to find where your customers are and focus your energy on meeting them there.
Develop a brand identity
Branding is how people remember your business, so getting some professional help with a brand identity that includes your logo, fonts and colours will help distinguish your business in the market.
Whether you can develop your own strategy or you can engage someone to help you, having a marketing plan can be really helpful to keep you focused on achieving your goals.
Set-up your marketing channels — whether it’s social media or a website, it is important to have places people can find you.
How to run a small business
1. Customer experience is your main game
Focus on your customers — what do they need, want, desire? And how can you meet those needs in an efficient and seamless way? Good customer experience often means that you will get returning customers and referrals.
2. Build a good team and manage them well
If your business requires more than just you or you decide to scale your business, finding the right people is the key to success. Surrounding yourself with people who have specific expertise can be just what you need to get to the next level. Managing a team well means good communication, clear goals and paying a fair wage. If you manage a team well and create a good culture to work in, your employees will want to stick around.
3. Have good systems
Systems are really important for any business to ensure tasks get done and things run smoothly. If you can automate tasks, systems and procedures—whether it’s accounting software or sales pitches, or simple tasks—this will help you scale and grow.
Networking and meeting people is always a great way to grow your business. There are also great local business groups or industry associations you can join to help you continue to connect with others.
Don’t be afraid to start small
Maybe it’s a side hustle so you can keep working your full-time job, or maybe it’s something you can make from your kitchen bench. Often this is how businesses start because it is low risk and does not require a large investment to begin. It also allows you to road test the idea to see if it will work, build a customer base slowly, and tweak any issues that arise.