What is the opportunity?
Is 2020 the year you’re going to start your own business? Congratulations!
Most likely this will be the best decision you ever made. Starting your own business is significantly challenging and hugely rewarding. But it is definitely not for the feint-hearted.
By Michael Mekhitarian
There are more than two million small and medium sized businesses (SMEs) in Australia. They make up a significant chunk of the economy, contributing about 20 percent to GDP and employing half of the Australian workforce.
But, there’s no sugar coating it: While Australia has a long history of entrepreneurship, in recent years it has become harder for SMEs to get off the ground. For a number of reasons – the challenges of competing in ( a sometimes uncertain) global marketplace, the demands of 24/7 online connectivity and customer expectations, higher compliance costs, and rapidly changing technology.
This does not mean, by any stretch of the imagination, that you should quit before you start.
It just means you need to be realistic about the challenges ahead, and be prepared. Because of those start-ups that do get off the ground, around 60 per cent fail.
So, how can you avoid this? …. Well, let’s start at the beginning.
Most entrepreneurs spend a lot of time considering what they’re going to provide and who they’re going to provide it to. It’s an excellent starting point … But those are simply marketing questions. You need to consider, on a much deeper level, the purpose of your business. And if it is not aligned with your life purpose, then ask yourself if you’re really passionate about it. Because passion is what will keep you going when the going gets tough.
You also need to consider how you’re going to bring this product or service to customers. The truth is that as a small business you will need to find a solid, loyal niche to be really successful.
We all read the amazing stories of clever start–ups like Blinkist and think we’d love to take on the world! And, sure, it is absolutely possible – small businesses are revolutionising and disrupting all aspects of life as we know it, but to give yourself the best start, start small, perfect what you do … then aim to be a global sensation.
Business success is not a race to the finish line. It’s achieved by taking measured steps forward. Quite simply, there are no shortcuts. And besides, you don’t want to kill yourself getting there. Having your own business should provide you with an income while you’re building an asset, but it should also enable you to have freedom and flexibility in your working hours, and help you to make a life, not just a living.
Don't be daunted
Planning is the key to having absolute control over your business and control is the very thing that will determine whether your business is likely to succeed or fail.
At ATB Partners, we’ve developed a 5-step process for SMEs. It’s a process that has been developed over many years of working in business ourselves, and by working with small businesses, and listening to the trials and tribulations of small business owners.
This 5-step process will help you to put this fundamental business planning in place.
And if you’re planning correctly, then you should be faced with very few surprises. You will be able to see in advance anything that could potentially de-rail you. If something does come out of the blue, then your comprehensive planning will mean you have access to contingency strategies to deal with it.
Structure and scalability
If you don’t have in-built scalability and a structure to support your business, your growth will be impeded. … And you’ll just end up feeling like you’re tap dancing on rollerblades while swinging a cat!
So many businesses fail, just as they’re starting to succeed for exactly this reason. They reach the tipping point and their business can’t sustain the growth, because their systems and structure don’t support scalability.
Sure, without a crystal ball, charting both the future and your business within it, is not easy. Looking ahead requires making some calculated assumptions. But you also need to build some flexibility into your business while ensuring that it has a solid and stable foundation.
And so this brings us to the most critical component. Money.
Adequate funds
Unless you just won the lottery and you’re all cashed up, you need to spend time considering finances: start-up costs, income and expenditure projections, as well as tax, insurances, an ongoing budget, and a buffer zone if things get tight.
Remember too, you’ve got to factor in your personal living expenses (the roof over your head and the food on your table etc) as well as what your business (and any staff) needs.
The bad news is that the traditional banks are making it harder to access funding right now. The good news is that outside of these institutions you have a number of options if you’re open to considering them: various government grants, venture capitalist funding, business partnerships, and a range of other non-traditional lending options too.
Don't go it alone
Build a team before you start your business. An accountant, a financial planner and a business mentor are a must.
Choose people with dedicated start up and SME business experience, with a whom you can work with and whom you can trust. Making sure that you have knowledgeable people around you will provide you with access to advice and opinions that will push you out of your own head, bringing fresh perspectives and ideas when you need them most.
You will need to work hard in the start-up years, but if you’re doing it right, then down the track your business will begin to reward you.
It’s one hell of an adventure though, so strap yourself in for the ride!
Feel free to wander around the ATB Partners website, we have lots of blogs and other free resources you can access. And if we can help, contact us.
Read More Blogs