5 tips for starting your own successful business
Want to be your own boss but not sure where to start?
Some people’s dream is to nurture a business idea through to success. Calling the shots, working their preferred hours and achieving financial independence fires their dream.
Many people have a great idea but are overwhelmed when they look to turn their idea into a thriving business. Here are 5 tips for translating your dream into reality.
1. Road test your idea
Speak to people whose opinion you trust and run your idea past them to gain feedback and an alternative perspective. You’ll be pleasantly surprised by how many people will be happy to help and connect you to professional expertise.
The chances of your idea being stolen are low. After all, if your idea can be replicated that easily it’s not a great a business concept!
2. Start lean
Way too many businesses run out of money before they have an opportunity to succeed. Spend as little hard cash as possible to get your idea up and running. Get a basic website up using WordPress templates. Target Facebook Ads to reach a specific audience and look at options like Hootsuite to drive your social media presence.
3. It takes a community
Starting your own business can be tough and lonely! Find a friendly, affordable accountant and lawyer. Sound technical advice can save you money and tears further down the track.
Similarly, seek out people who’ve been in your shoes. Learn from their experiences and ask for feedback.
4. Follow the money
You need capital to start your business. You may self-fund, borrow from family or friends or tap into a partner to help with your start-up. Map out a draft Business Plan, budget and cash flow projections then stick to your budget. Make sure your business has a dedicated bank account for transparency. Muddling your private bank account with the businesses is a recipe for future disaster.
5. Legals and ownership structure
Choosing the right structure for your fledgling business can be complex. Multiple options, each with different pros and cons can be confusing. Think about:
Your personal liability from your business, its products or services
Future plans for downstream partners or investors
Administrative costs of setting up and maintaining your preferred business structure
Tax effectiveness of your chosen structure.
Being a Sole Trader may be the simplest and cheapest option, but your personal assets are unprotected. It doesn’t give you much protection if things go horribly wrong in your business.
An Australian limited liability company (an LLC) remains the most common structure. It needs only one shareholder, one director and one resident director. There is no mandatory minimum paid-up capital and your personal assets are protected.
Whatever your structure, you’ll need to register your business with ASIC. Your form needs to identify the business’ ownership structure. You will also need an Australian Business Number (ABN) for your business from the Australian Business Register website. Then register for the Goods and Services Tax (GST). Registration is mandatory for any business generating more than $50,000 in revenue (not profits) during any 12-month of operations.
Final observation
Setting up your own business is exciting, challenging and occasionally frustrating if you’re not prepared. Put in place smart plans, receive competent tax planning and legal advice and consider staffing lean, to begin with. Above all else, keep a sharp eye on your cash burn!