Tips on Starting your own business
To start any new business you would need the following ingredients; determinations to succeed, motivation, discipline and to never give up no matter how hard your business goals look to others. Be decisive, no matter if your decision is right or wrong error some error can be made and this is one way to learn.
View for a profit
Your new attitude in your new business should be “profits are better than wages.’’ You must love profits and be willing to accept that your skills are valuable to the market place otherwise you are not in business but rather you may have a hobby. The point is that if you underestimate your skills and knowledge market will punish you. If you cannot adopt this attitude than you may be better off being an employee as this is one of crucial elements of entrepreneur’s philosophy.
Skills and licenses
Do you have required skills to start your business and would your need a license for your business activity? Accepting jobs for which you do not have competencies is a common reason of business failure and can be regarded as unethical behaviour.
The market rule is: ‘More unique you are less competition you will have.’ Have a unique name, logo, and slogan. Set your advertising philosophy e.g. if your business is related to internet your advertising should be by using internet advertising services. There are generally two types of advertising: networking (word of mouth) and marketing you should have combined strategies to cover both areas.
Long term look
If you don’t have a long term look of at least 5 years you are already determined to fail in your business. You also must have a long term look about your industry and follow market trends so e.g. if market wants movies on DVD’s and you want to start your business of selling new movies on VHS tapes.
Questions you should ask yourself before you start: Who will be your mayor competitors? What strategies they use? What are their prices? Are my services or products feature better than competitors? How can I differentiate my product from my competitors? You can learn so much from your competitors but whatever you do not be a copy-cat as this is unethical and can be prohibited by law.
What business structure should I have: sole trader, trust, partnership or company? This is a complex question and the answer depends on each individual circumstances. I strongly suggest asking for advice from an expert as having a right or wrong business structure will be one factor to determine your business succeeds of failure.
Get a professional advice
If you are starting business which will have a turnover over e.g. 500k in the first year than please stop reading this text and find an expert accountant specialized in the area of your business. If your turnover is not going to be this high in the beginning than still finding a good accountant or tax agent is another crucial thing for your start. If you have a good accountant you should treat him as a valuable asset of your business and try to create long term relationship view from the start.
The most common reasons for business failure is not having sufficient skills to run your business and this skill has nothing to do with your tradesman or industry skills and competencies.
Anther reason is not having proper business records or not having any records. By having a sound bookkeeping procedure in place you are taking control of your business otherwise your business has control over you.
Relying on a wrong advice can be fatal, so e.g. if something worked well for your friend or relative the same thing can destroy your business as your circumstances are different.
Having control over your budget and spending is a must. If your expenses are greater than income you are creating losses. For people who have sound budgets in place this means to stop and review their strategies and for people who run their business without any budget controls in place this does not apply as they have no idea who is running their business and how.
Do not be afraid to ask even if your question is a very simple one. There are many places you can ask you questions such as Tax Office, business associations and of course your accountant/tax agent.
Risks and insurance
Generally it is said: ‘If you do not risk you do not profit’ but I would add ‘If you did not take your relevant insurance please do not take any risks. Your professional indemnity insurance will generally tell you for which areas of your business you are covered and which areas are not covered. Taking risk without having a sound insurance in place may be a new definition of the word ‘stupidity’. So take business risks but take insurance first.
Take your first step – contact us
Online Tax Agent can help you to take your first step and jump-start your business by registering you for an Australian Business Number.