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Starting a business is an exciting decision, but with that decision comes a lot of pressure. Of course, the idea of autonomy is an appealing one, ditching the 9-5 to define your own working hours and find that ideal work-life balance is something we are all striving for in 2024. The world has changed radically over the last two years and that has impacted how we start, manage and operate businesses. That being said, if you get the balance right, you are in for one of the most rewarding experiences of your life.
How do I start a business?
There are several steps to take. The first is to write your business plan, and then you need to secure funding, research and find a location, register your business, sort your tax information, and file for permits and licenses if necessary.
Your business plan
It doesn’t matter how wonderful yourbusiness idea is; you need to lay the groundwork to ensure the best chance at success. That’s why writing a solid business plan is the first step in your journey. It’s your blueprint, and you can use it as a reference point when you want to measure your success. It’s also a crucial part of fundraising if you require external funds. Any lender will expect to see a detailed, fully formulated business plan. Here are a few starting points.
The executive summary
This should be the first section in your business plan. It’s a top-line summary of your business idea and how you will accomplish your goals. This is the first impression your business will make, so you should view it as a critical one. You may want to complete the rest of your business plan and circle back to the executive summary at the end. This will allow you to pull elements from your plan to highlight.
The business description
Your business description is basically your pitch and your mission It’s the answer to what is your business? Where do you see the most potential for your business? And, why?
This is particularly important in the current landscape. It’s 2022, we have just been through a global pandemic, and while many markets are recovering, there is some way to go. How do you foresee the current climate affecting your business? What steps will you take to ensure it doesn’t negatively impact you? Are you launching a brick and mortar store, or, are you going into eCommerce? Or maybe a combination of both?
The market analysis
You already touched on it in your business description, but this is where you take a deep dive into the specifics of your marketplace. What data points will help people understand your business segment? What is your potential audience size and share? Are there weaknesses present in the current market? What are they? How will you fill those gaps? Be specific here, so that the information doesn’t overwhelm the reader.
The competitive analysis
What businesses are in the industry doing what you do? What are they doing really well? Where are they failing or falling short? A comprehensive competitor analysis is a critical part of any business plan. It’s your opportunity to do a full assessment of your competitors’ weaknesses and strengths. It should help you shape your plan and identify threats and opportunities. If there are no competitors because your idea is new, you can use this space to walk readers through how you will stay on top of your game should a competitor enter the market, your point of difference. That being said, do extensive research (both on and offline) to make sure there isn’t another business already doing the same thing.
The product piece
What is the product/service you are offering? At this point you should include copyright, trademark, or patent information. It’s also where you should discuss your research and development piece if necessary.
The operations plan
An operations plan is a detailed statement of the daily management of your business. Are you a sole trader or do you need to recruit employees? If it’s the latter, how many employees will you need on your team? Do you need office space or a brick and mortar store, or maybe will you operate from home? If you are solely eCommerce based, do you need space for inventory and shipping, or are you drop-shipping? Your operations plan should cover all of this information.
The Omicron surge has had a larger impact on customer confidence and staffing levels than even the peak of Delta. The hospitality industry is a prime example. A survey of 541 restaurants shows almost 70% of respondents lost an international chef. This has of course begun to turn around,with skilled workers allowed entry from December of 2021. However, it’s something to consider for your own business if we were to run into lockdown restrictions again. Ultimately, it’s about future-proofing your business as much as possible, in as many different ways as you can.
If you foresee staffing being an issue, there are ways to streamline your business. For example, restaurants can reduce their menu offering to alleviate pressure on the kitchen staff. They can reduce the seating area to make waiting tables more manageable for the front of house team. Understaffing can lose customers, threaten sales and increase staff turnover. So, the more you can manage ways to get around it temporarily, the better off your business will be. Investing in technology may help with some of the heavy liftings and free up your employees time to serve customers. Adding an Appointments system provides you with not only a POS system, but an online appointment creatorand a way to manage your team and business more efficiently.
The financial details
What type of investment will you need to grow your business? What capital have you secured, and how much more do you need to get off the ground? If you do need further investment, what steps do you plan to take to secure it? This is where you lay the financials out as clear as day.
Taking action to start your business
It’s worth completing a self-analysis to identify your own strengths and weaknesses.. Once you know your opportunity areas, you can take steps to secure training or knowledge for the areas you want to improve. For example, you may possess a lot of the practical skills necessary to operate your business, but lack business management and financial knowledge. Or vice versa. Don’t be shy about outsourcing tasks that are beyond your skill level. That’s how we grow and learn!
Location location location
If you need a storefront, location is important. The right location will depend on the type of business you operate. Foot traffic is an important consideration for many brick and mortar stores, you will need to find a frequented area to capture passing traffic. A sole trader, meanwhile, can operate from home if they choose.
There is more to it than simply finding a location. There are zoning laws, licensing fees, insurance costs, and a host of other financial considerations to factor in before you secure your space. You can speak to your local council to get a better idea of what’s required. You will also need to consider your business image. What are you trying to project and how will your location align with that image? Are you accessible and safe for your target customer to visit? Is there space to expand in the future? Talk to other business owners in the surrounding area and research the neighbourhood to ensure you make an informed decision.
This is where your business plan comes to the forefront. You will need to secure financing if you don’t have the necessary capital to launch and operate your business. Whichever route you choose, you will need to consider several factors. What does your business structure look like? If you have to give up a stake in the business to secure investment, it may change your company structure. And, if you don’t want to give up a percentage of the business, you need to know what the next step is for funding. If you follow the traditional loan route make sure to read the details before you sign on the dotted line.
You need to decide on your business structure because different options come with different legal and tax implications. The best way to proceed, especially if you’re unsure, is by speaking to a lawyer or an accountant. You will find a wealth of information on the Australian Tax Office website. Once you have settled on the structure, you can select a name and register your business.
Now it’s time to file the legal paperwork. The first step to filing your new business is registering it, along with your business name, with the ATO (Australian Tax Office). Your business needs its own ABN (Australian Business Number). If applicable, you will need to register for GST (Goods and Services Tax). Do you need an ABN? Seek advice from a lawyer or an accountant if the ATO website doesn’t have the information you need.
Do you need permits or licenses to operate your business? For example, if you plan to serve alcohol in your establishment, you need a liquor license. If you’re opening a tattoo parlour, an operator license is required. And, if you expand your business to several locations, you will need a separate license for each space. Check state and federal regulations to ensure you are fully covered. All of this should be in place before you open your doors for business.
If you plan on recruiting employees, you need to know your legal responsibilities. There are contracts to draw up, tax liabilities to consider, industry-specific training requirements and you need to know what is required of you to stay legal.
The payment processor
If you open a physical store how do you plan to process payments? Many business owners shifted to card only payment processing during COVID-19 and we are moving to a largely cashless society. You want to accept all major cards and be able to process mobile wallets. A solution like Square POS is ideal. Not only can you process sales in-person and online with one easy system, but you can also track your inventory and manage your team. Don’t forget about an invoice system, which will help you send estimates and invoices, schedule recurring invoices, chase payments and issue receipts.
There isn’t a one-size-fits-all approach to starting and succeeding in business. There are different considerations for every industry. Get to know your industry requirements and take steps to future-proof your business. It might seem overwhelming at first, but the more planning you do before you open your doors, the better off your business will be in the long run.