Who hasn’t dreamed of starting their own business? Becoming the next Katie Page or Ron Ilhan?
For many budding entrepreneurs, the pandemic has given them the ideal opportunity and excuse to dip their toes into the waters of commerce.
Whether it’s inventing a new type of hand sanitiser stand or a completely new design of water chillers, a quick look at Kickstarter or one of the other online crowdfunding sites reveals hundreds of people working on projects which they have started.
But, it’s one thing to start a brand new business, and quite another to run one properly.
Flying by the seat of your pants is all very well when you are a one-man-band or working with your family, but as soon as you have employees or customers you have to be responsible, and there are rules – both written and unwritten – that you have to follow to make any business a success.
This is a short list of some essentials – it’s not exhaustive – but gives you an indication of what you should do to make sure you are being responsible and considerate, and giving your business a fighting chance of becoming the next big thing.
Your Business Idea
Your idea needn’t be unique. Very few completely “new” inventions ever come to market. They are usually variations of an existing idea or ways that have improved things. The most important consideration here is making sure that there is enough of a gap in the market to enable your new idea to have a share of it.
Some of the best ideas are born of frustrations with an existing “thing.” Velcro fastenings are a splendid example of this – an alternative to string and sticky tape rolled into one. A new system of mobile crane transformed the plant hire industry and made gantry cranes a common sight on the skylines of most major cities.
Your Market or Demand
It’s completely pointless to have a brilliant idea for which there is just no market. Not all markets are the same. Something which may sell in one country or location might be ignored, or totally inappropriate for another.
When starting your own business, it’s crucial to check laws and regulations as they may prevent you from selling certain products or services. It is also a guide to find out what does and doesn’t to your resources. Many towns and states have their own Chambers of Commerce and can help with research and advice about this.
Market research is a lot easier with the internet. Searches enable you to look at a wide range of forums and social media platforms to gauge the likely reaction to your idea.
Your Competition
Whatever your idea, there is bound to be competition. Some competitors will be serious contenders for your market and you need to understand their offers and way of doing business so you can find your edge.
In most markets, there are different segments and there is enough business for everybody. This is not always the case though, and some industries are extremely cutthroat and don’t take kindly to new disruptors coming onto “their patch” of commerce.
Getting traction and gaining market share is the name of the game. Find your unique selling proposition, or USP, and promote this relentlessly. Get feedback and test everything you do to make sure that it is working and getting you the best possible results.
Your Start-Up Costs
It’s easy to get carried away with the excitement of starting your new business and buying all the top of the range computer systems, office furniture, cars and other gear that you “need.”
Concentrate, instead, on things like the inventory that you will need in the future, and contingencies. Start off with reconditioned or second-hand equipment if your business is not customer-facing, or it doesn’t matter.
Bootstrapping in the first couple of years will keep you on the right side of breakeven and allow you breathing room. Once you have some traction and sales, you can improve things gradually.
Your Finance and Capital
Along with this last point, cash flow is king. It’s impossible to run a business without money and preserving what you have started with engaging an excellent accountant and asking for generous credit terms with suppliers.
Most businesses start with personal financing and money from friends and relatives. Look after them, and their faith in you, by making sure you use the funds wisely.
Have both a backup plan for emergency funding and a cut-off point beyond which you will call a halt to the business if it is not working.
Your Expertise and Knowledge
You might well have to learn new things – new programs, procedures, ways of working, leadership skills, and business processes. These will take time and money, so make sure you can manage to accommodate these new demands effectively.
Personal development is important for you, and any staff you take on, to maximise the opportunities in the marketplace and make your embryo business as efficient as possible.
Planning and research are also vital, as well as tracking jobs, invoices and other admin. A system like Asana or Trello will help with these tasks.
Your Location and Logistics
Ideally, a retail business needs an excellent location, in a prominent position, with good footfall and availability for parking. If your business is not customer facing, these considerations are not so paramount.
An industrial park or enterprise zone is ideal for manufacturing or for a business that needs storage facilities. Because of the pandemic, commercial premises are freely available and can be found at a much cheaper rent than they were.
If your business is going to need staff, then you need to locate near population centres which will give you access to the largest possible pool of talent available. Often, states or governments make grants or subsidies available for areas they want to develop, and these might be something to consider.
Whatever your new business is, this is an ideal time to start. With interest rates for borrowing historically low, and customer growth picking up again, the prospects of success are high.
If you do your homework, plan properly and keep expenses low, you will soon join the top ranks of successful Australian entrepreneurs.