Starting a business can be both exciting and a little scary. I’ve written this article to help you navigate
some of the pitfalls I’ve experienced through my years of being in business, many of which I have
learned the hard and expensive way.
There are several key areas of business that are often overlooked when starting out and
unfortunately doing so can lead to serious consequences. Let us explore them now
#1 Business Plan
Perhaps you’ve heard the quote by Benjamin Franklin, “If You Fail to Plan, You Are Planning to Fail”
Business failure is estimated between 60-90% in the first 3 years and a common cause is failure to
plan and implement strategies.
A basic business plan should at the very least consist of a description of the business, what it does
and how it does it, a marketing plan and a financial plan complete with goals and milestones. Once
this is done it is time to include a set of actions designed to achieve your overall aim- more
commonly know as strategy.
Without this information, it is near impossible to achieve the outcomes you are hoping for. You may
find yourself frequently frustrated and confused. Perhaps you aren’t sure how to write a business
plan or what you should put in it. I assure you, there are many free templates and tools available
online including at business.gov.au
#2 Bookkeeping – It is extremely important to start your business understanding your numbers.
I can tell you that when this area is an afterthought, it can be extremely expensive and stressful to
have corrected. It may not seem like it at first but it is cheaper to get professional advice and
support from the very beginning of your business journey.
Some people like the idea of doing their own books and that’s fine but make sure you get support to
set up your accounting system and procedures correctly.
• This means that the Chart of Accounts (CoA) have been properly set up
• You know if you are using cash or accruals based accounting
• Know if you should you be registered for GST
• You have a consistent process for recording your expenses and income – There are several
accounting principles and guidelines that must be followed.
• That you have correct system in place for employees wages and superannuation. As of 2019
Single Touch Payroll was introduced and a compliant system must be used.
• Ecommerce business bookkeeping is often more complicated. Get advice if receiving
customer payments from methods such as Afterpay, Square and Stripe
• Have separate bank accounts – DO NOT USE your personal account for your business nor
your business account for personal expenses! I can not stress this enough. You need a plan
for how much and how often you will you pay yourself and keep money aside for taxes
refunds, upcoming expenses.
#3 Industry Regulations & Insurance
Depending on what industry you are entering, you must ensure that you are aware of and codes or regulations that must be adhered to as well as insurance options to protect yourself. Most businesses will find they are required to comply with privacy and anti-spamming policies.
Regulations – There are mandatory and voluntary codes for a great deal of industries. There are so many that it is not possible to list them here. You can search business.gov.au for fact sheets related to your industry. There may be some that will surprise you!
Insurances- below are a few typical insurances. Seek out an insurance broker to assist you with your insurance needs.
- Workers compensation
- Professional Liability
- Product and Public Liability
- Technology and CyberCrime. An insurance broker will be able to help you figure out what type of insurance you will need.
There are a multitude of systems that a business owner will need to develop. While you may not need all of them when just starting out, at the very minimum you will need the following
- Payments- What method will you use to accept payments? There are many merchant options such as bank deposit, stripe, paypal, square readers, website online payment options
- CRM stands for Customer relationship management- Keep good client records from the very start of your business because an email database becomes a valuable asset as it grows.
- Policy and Procedures – This may not be something you have available from the very beginning of your business however having these in place can aid in making appropriate decisions. There are many areas that should be covered in your policies, too many to mention here.
This may come in as number 5, but don’t let that take away from its importance. it is essential you know how you will attract customers and bring in revenue or your business is not a business, it is just an expensive hobby.
While Field of Dreams with Kevin Costner was a great movie, the concept of “Build it and they will come” is a recipe for disaster for your business.
Many of us business owners come up with great products and services then struggle for years to find enough customers to keep the lights on and ourselves feed. The reason most business fail is that the bruised and battered ABN holder runs out of energy, starts looking for a job and closes the business.
Consider the following
- How will you get customers?
- Customer avatar- who is your optimal customer? It is anyone or everyone!
- How will you reach them?
- Do you have a website? It is considered a must these in this day and age as potential customers expect to visit your website for more information learn who you are at their leisure
- Can you be found on Google? – Think about the fact that when we thinking about searching on the internet the majority of us use the term ‘google’. It is an absolute must to be found there. Google has a free Google My Business Tool that allows you to confirm you are a real business.
This article was intended to provide you with an overview of what steps to take after you receive your ABN- Australian Business Number. Please do not consider this a comprehensive list or become overwhelmed by it. There are many stages along the journey. It is impossible to know and understand how to be an experienced entrepreneur until you are. Take one step at a time and gradually you will build on your knowledge and both you and your business will grow and benefit.
A final note, business is not a solo game. Remember to surround yourself with people on a similar journey as you and take advantage of the many wonderful supports available.