So you want to start your own business?

Are you sure you want to start a business?

People start businesses for all kinds of reasons ranging anywhere from a purely commercial decision through to a personal desire to make the world a better place. It can be driven by a bucket list or a major crisis event, such as suddenly finding oneself unemployed because of a global pandemic! No matter what, people who start businesses will all have something in common, and that is that they’ve identified a gap in the marketplace, some consumer problem to be solved, which they feel they’re capable of filling.

Taking the first steps.

The first step or main task is to identify that awesome potential in an idea. Then you’ll need to invest the necessary energy and resources to give it life. Our job as accountants, bookkeepers and business advisors, is to help you reach your goals by helping you manage risk, finances, make investment decisions, plan and implement your growth strategy, all while meeting your financial and reporting obligations along the way.

To succeed, you’ll need to understand your market and your customer’s needs. You’ll need the ability to respond to changing market conditions and build your business on strong foundations. The success of a business in the long term is influenced by so many factors and they’re not always within your control. Far too many factors to cover within the context of one blog but suffice to say your approach and preparedness are critical.

How good is your idea? Is the timing right?

Researching your business idea or concept will give you the best chance at success. Ask yourself and seek answers for the following questions;

  • Am I solving an actual consumer problem?

  • What’s my USP (Unique Selling Proposition?)

  • How many players are in the market already? Am I better? Faster? Cheaper? Smarter?

  • Who is my target market?

  • Are people prepared to pay for me to solve this problem? If so how much? It's important to know how much people will truly value what you sell or do.

  • How often will people need my product or service?

  • Analyse your idea using one of these tools; SWOT, PESTLE, STEEP, Porters 5 Forces, Critical Success Factor Analysis or Scenario planning. Do this regularly as part of your strategic business planning.

  • Write a draft strategic business plan and refine it with your accountant and/or business coach.

  • Find a good marketing consultant to help you develop a marketing plan.

  • Engage experienced professionals to help you. Did you know that Rowe Partners offer strategic business advice, business performance assessments, and business planning?

Do you really have a head for business?

When you start a business, it’s important to consider your motivations and carefully consider if you’re truly ready, willing, and able to take up the challenge. Are you one of those super diligent workers that has always worked in a business as if it’s your own? If so, chances are you’ll do great at running your own business. But if you’ve always worked for other people, it’s likely you haven’t had to deal with the mundane aspects of business such as human resources, WH&S, bookwork, payroll, PAYG withholding tax, leave entitlements, superannuation, GST, FBT. These things can be overwhelming. You need the right systems and support network in place. The great news is that there are affordable outsourced resources like our Rowe Partners Business Support Services available to handle this for you so you can focus on the aspects of the business that need your unique expertise. Our team can support you with all aspects of business bookkeeping, or just some of it depending on your skills and needs. Once we understand your business goals and needs, we’ll set you up with a no-fuss combo of cloud-based software systems. As you’re focussed on getting the business up and running, you can be confident knowing we’ve got an eye on your cash flow and have got your back with the ATO. There are some excellent software solutions and apps for accounting, bookkeeping, planning and document management that will make your task easier. Ask your Rowe Partners accountant.

Prepare to battle your demons!

Make sure you’ve got a strategy to achieve your goals and to battle those demons before you start. You'll have many moments of doubt along the way. We suggest that you write down your own success goals and develop a plan to achieve them. Anticipate some of the hurdles you might face and think through your response. We don’t all measure success the same way so your goals will be very personal. You may not need to run a global empire to be happy. Some people run successful businesses with a couple of products and just a few staff or even no staff at all. There’s no right and wrong but you need to decide early.

Managing Stress

You’re going to get stressed. Make sure you’re in the right frame of mind to deal with it and for the long haul. For example, if you’ve recently been made redundant or are under financial pressure when you start, it could undermine your confidence and willingness to take even calculated risks so…surround yourself with good, experienced, and positive people. Avoid people who don’t believe in you or your vision. You don’t need to take everyone on the journey with you. Sometimes, the most well-meaning, protective people can drag you down so make sure to maintain healthy boundaries.

Having a great team around you will help. Include in yours a trusted Rowe Partners accountant and/or financial advisor, a lawyer, business coach, IT guru, technical or subject matter advisor and marketer on your team. And again, implementing good bookkeeping and administrative processes early will save many headaches later and help you avoid drowning in paperwork.

Read the Rowe Partners blogs and our Rowe Partners Facebook page. We provide a lot of good business-focussed content.

Dotting your I’s and crossing your T’s.

Get clear about business structure

Setting up the right business structure to suit your needs is particularly important. So too is protecting your business. You need to be able to imagine your business into the future and prepare for possibilities. The ripple effects of an error in the early stages can be costly.

What business structure is most suitable? Talk to your accountant first! You’ll need an appropriate, legal, and compliant business structure to suit your needs. If you’re planning to operate across borders or globally, you’ll need to ensure your business is compliant in all markets. Advice on structural setup will vary depending on your requirements, who owns the business, how you’re raising capital, your level of exposure and sometimes what roles people might have in it. Your Rowe Partners Accountant will be able to go through the pros and cons with you but essentially, you’ll have four main options;

  1. Sole trader

  2. Company

  3. Partnership

  4. Trust

Protect your assets in case of “What If?”

What if your business takes off? That’d be awesome right? Well yes. Absolutely. However, it may also open you up to risk and unscrupulous behaviour from competitors. There's an old saying "there are no friends in business". At Rowe Partners we don't subscribe to that at all. Developing good business relationships and networks is often critical to success but we do recommend that you take precautions. Your new-found enthusiasm for your business could blind you potential issues. Take an eyes-open approach and if you’ve done your research well in the first instance by completing a competitor analysis, you’ll know who the other players are in the market, the size of their business, their products, market positioning, services etc. but you will still need to protect your investment. You’ll be developing assets which represent a value to the business. At some point when you need a clear understanding of how much the business is worth say for selling the business or accessing finance, it will be important.

Whilst the cost of defending a breach of copyright, for example, might be prohibitive, there’s no point giving an untrustworthy person the keys to your house. Make sure to;

  • Register your business name with the Australian government and other key markets if operating internationally. and be sure to conduct a search of both your business names and domain names first.

  • Obtain an Australian Business Name (ABN) or Australian Company Name (ACN) registration

  • Register for taxes such as GST, PAYG and FBT

  • Trademark any brands and protect other Intellectual Property such as designs, patents and unique methods or processes.

  • Decide what sort of business you want to operate - Bricks and Mortar? Online? Bricks and Clicks? A franchisee? Provide specialist services as an independent contractor? Knowing this will influence the many choices you will need to make.

  • Always protect your reputation. With the ability of social media to spread damaging negative opinions and reviews fast, it pays to focus on customer service. Know your responsibilities and your rights. Grow your fan base!

  • Take a professional approach to legal matters pertaining to your type of business. Get a good basic understanding of contract law, privacy, anti-spam, WH&S, consumer law, tenancy, defamation etc. and if anything tricky comes up, see your lawyer.

  • Know what help is out there. As Australia begins its economic recovery post-COVID, there is likely to be lots of support by way of Government programs and grants. Keep an eye out. If you're eligible, why not apply for funds or assistance?

  • Secure all financial, supply and logistics contracts, licencing or franchise agreements, leases, cyber, business names, domain names and social media accounts.

  • Be cyber safe. Keep a record of passwords in a reputable password manager, keep thorough records of client information in a quality database (preferably a CRM) obtain SSL certification on domain names, use 2-factor authentication for all accounts and install high-quality cybersecurity software on your systems. *Ideally you should have an IT expert conduct a security risk assessment.

Money, money, money

The start-up phase of a business is financially risky. It requires a significant investment of resources and you need the capacity to make important, real-time business and financial decisions. Develop good open communication with your bank and/or investors and set up a system to facilitate this. Secure your financial resources and budget for cash flow. Ask your Rowe Partners accountant about this.

Good luck and remember we are here when you need us. Call 1800 04 7693.