So you’ve got an idea for a business. Now what?

Starting a business and becoming your own boss is an exciting time, yet also a challenging one, with a whole laundry list of things you’ll need to put on your to-do list before you open your doors (even if they’re virtual ones). To help you get started, we’ve put together some important things you’ll need to do to get you on your path to success. 

Does starting this business make business sense?

Whether it be hand baked cakes or salsa lessons, it pays to spend some time early on researching and deeply considering whether your business idea has realistic potential to be a winner.  

Questions to consider before going all in include who is your target audience? Is there an actual need for the product or services and how you can gain an edge over the competition? Do people actually want to purchase what you want to sell? What price will you need to sell at in order to cover your costs and make a profit?

Answering these questions will take a combination of research, calculations and some educated guessing. It also pays to get advice from professionals like accountants and lawyers and also people you know and admire with some business experience. 

Build your business with the right foundation 

Your business plan provides direction and keeps you on track over the first years and beyond.  It also acts as an organised framework where you can highlight what makes your idea different and how marketable it is. It will also help identify staffing needs, funding requirements, who your customers and competition are, as well as address your strengths and weaknesses.  You’ll also need one if you require a loan.

Your business plan should include:

• An executive summary, or a short synopsis of your business goals 

• A description outlining your products or services 

• A market analysis showing the need for your business

• An organisational summary listing employees and other key players

• A marketing strategy outlining advertising and promotional strategies

For a more detailed look at how to write a good business plan visit https://business.gov.au/planning/business-plans/develop-your-business-plan 

Once your foundation is built, you’ll need a good structure. There are advantages and disadvantages to each type of business structure and it’s important to get this right as it can affect the safety of your personal assets and tax obligations. The most common structures in Australia include:  

• Sole Trader –as the sole owner of the business, you and you alone will be responsible for the liabilities. 

• Partnership -  Where  more than one person and/ or entities run a business together, but not as a company.

• Company (Pty Ltd) –the most common structure for small businesses in Australia, a company remains a separate legal entity from its owners.

Sometimes you will need to outsource expert advice and this is one of those times where it could pay to meet with your accountant and/or lawyer to discuss which business model is right for you.

Crunching the numbers

Most small businesses take a while to begin turning a profit and a common mistake is not having enough cash to survive until the business gets momentum. You’ll need to do a conservative financial forecast to see if you have the cash available to ride out the inevitable slow start or whether you’ll need to secure a loan.

When determining your cash needs, you’ll need to factor in expenses such as office space, equipment, furnishings, marketing expenses, insurances and daily operating costs. Main sources of funding to help cover costs include:

• Australian government grants

• Traditional bank loans.

• Private equity/angel investors

• Your personal savings

A great idea means nothing if no one finds you 

Whether you end up doing the marketing yourself or hire someone to help out, you still need a marketing plan which covers who you want to market to and how you’re going to do it.

Whether you do this yourself or someone does it for you, you will need to consider which platforms you want to be on such as Facebook, Instagram, magazines, billboards, or radio and this will also depend on the demographic of your target audience as to which media channel you choose. 

If you’re not a confident writer or don’t have anyone in your team to write your content, you will need to hire a copywriter to write blog articles, newsletters and social media posts for you. Ideally your writer will understand SEO (search engine optimisation), which is where you will need to consider the best keywords your target customer will be Googling when looking for your product. If you have the funds you can choose to do paid advertising instead of, or as well as free organic content such as your regular blog articles and social media posts on your chosen platform.

The key takeaway is that you need to do something once you’ve launched to continue to attract new customers. 

Time for admin

Even if you’re an ideas person the legal bits need to be done, and the sooner you do them the sooner you can start building your dream.  

• ABN - You will need to register for an Australian Business Number (ABN) before registering your business name or creating accounts with suppliers or issuing invoices. Registration is free and can be completed online at https://abr.gov.au. 

• Registering your business name - Register online at http://asic.gov.au. One year costs $34, or 3 years $79.

• Trademarks - Trademarking your name starts at $220.  For more information visit  http://www.ipaustralia.gov.au.

• Licenses & permits - Every state has different requirements for licensing and permits and they differ across industries. For a comprehensive look visit https://ablis.business.gov.au.

• Register your domain name - It’s only possible to get a .com.au address if you’re a registered Australian business.

• Taxes – you must register for the appropriate taxes which are dependent on the type of business

  • Goods and Services Tax (GST) - compulsory if your business turnover is greater than $75,000 AUD 

  • Pay as You Go (PAYG) withholding tax - if you need to withhold an amount for tax purposes, such as paying wages or salaries

  • Fringe Benefits Tax (FBT) – for those lucky enough to provide perks like a company car.

Before starting any business, it’s important to know your skill and financial limits, and where you can go for further advice and support. A great resource is  www.business.gov.au

Last but not least – it’s important to get insurance that covers the basics like fire, natural disasters or theft, and even more important to make sure your policy includes legal liability such as both public liability and product liability. If you’re from SA, WA, TAS, QLD, NT, NSW or ACT, check out NRMA business insurance to find a policy that suits you.