MANY IDEAS ON STARTING A BUSINESS FROM SCRATCH

Business plan - 1

• Act like you know what you are doing even when you don’t.

Boasting is nothing to be ashamed of. If you move full speed ahead with aplomb, people are bound to move with you despite the fact that you have no clue as to what you are doing. You won’t always feel confident, but that doesn’t mean you can’t perform.

• Be patient if you want BIG clients.

Landing the BIG one takes time. It’s like fishing. You bait the hook and swing it high and mightily, but it can take hours to catch a big one. The same holds true for landing a corporate giant. Finding strategic customers or vendors who know your industry and believe in your product or business is manna from heaven. But it won’t take days or months to woo them. Count on years.

• Believe in yourself.

If you do not believe in yourself, who will? Every day, look in the mirror and say, “I am the best I can possibly be and I am going to do great things today!” You have to convince yourself first before you can convince others.

• Build a core team of people unlike yourself.

When the going gets tough, you want people at your side who are responsible, accountable and reliable. Look for people who complement you, compensate for your weakness or offer a fresh perspective. Impose on them to challenge you constantly by taking a critical or contrasting position. How else will you and the organization grow?

• Create luck.

Sure, we all run into bad luck at some time or another but the secret is learning how to squeeze out the negative and only work with the positive. In other words, search for ways to turn a misfortune into a benefit. Give yourself plenty of time to turn things around. The key to creating luck is to seek opportunities. Think about the good things happening in your life and work your way toward making every day an even better day.

• Define your business but remember to put the customers first.

Refer to Henry Ford’s classic statement, “An American can have a Ford in any color so long as its black.” The business is not about you, it’s about the vision you have that should serve customers. Theodore Leavitt had it right when he said, “The purpose of a business is to get and keep a customer.” Peter Drucker stated, “Companies are not in business to make items, but to make customers.”

• Delegate when you can.

Control freaks, perfectionists and compulsive people are “out.” Delegators are “in.” Who’s going to get more done, the gal who delegates the work to 100 people or the guy who does it all himself? By delegating responsibilities early on, you will have time to consider the needs of the business as a whole.

• Don’t quit your job until you have your first BIG customer.

What’s a business without at least one rock-solid customer? It’s a frustrating hobby. Before you even think of starting a business and running it full time, you better have a BIG customer or a handful of small ones who pay well and are committed for the long haul.

• Evaluate the source when you seek advice.

If you ask a homeless person whether you should launch a new product and he shouts, “Full speed ahead,” and then burps -- would you heed his advice? Pose the same question to the CEO of a publicly traded company and her answer will differ greatly. Respect and trust your source.

• Exude enthusiasm and positiveness.

What turns you on -- an enthusiastic and positive person or one who never smiles and never jumps up and down at your new idea? Start jumping up and down and look for people who will happily join you.

• Figure out how to get around or through an obstacle.

If you can’t get around it, then prepare yourself to go through it. Each of us has experienced problems that won’t go away. The best solution is one that allows you to break an “issue” down into manageable parts until nothing is left unsolved. Another method is to talk it over with friends, colleagues or family. You’ll be surprised at how many people have faced a similar situation and are more than happy to share what they have learned.

• Get a grip on cash.

To run a lean, alert and ready-for-challenge business, you have to tidy up your balance sheet and have enough money at your disposal. Know where your money is coming from and where it’s going. Most new businesses fail, and many do so because they are undercapitalized. Small businesses by definition tend to be thrifty even in good times, and bad times are all the more the reason to keep belts tight.

• Go to the bank when you don’t need to.

Just like going to the store when you are hungry makes you buy more than you intended, going to the bank penniless places you in a very vulnerable position. Get the paperwork for a loan done well in advance of being in a desperate situation and build a relationship before the economy sours. You want to always be in a position to weather the storm.

• Have a mentor.

Nothing beats turning to someone who’s been there and can provide you with perspectives that you are unable or unwilling to see. Mentors spare you from making costly mistakes or learning lessons the hard way.

• Hire the best team you can afford.

Don’t be cheap. Don’t be stupid. Offer what you can afford and be willing to explain why. If there is more to come, tell them so. If that’s unlikely, then say that too. No one ever walked away from a great opportunity just because the money wasn’t there. They turned it down because the person behind the offering wasn’t a straight shooter.

• Learn from all of your successes.

Don’t be defined by one moment. If you learn only one lesson, you‚re destined to fail because you will apply it in every situation. However, if you learn many important daily lessons, you will have a war chest of material from which to draw.

• Invest in the people you hire.

Think vacation and flex time, bonuses, health clubs, recognition for performance, opportunities for growth and advancement and the need for respect, sponsors and mentors. Employees look at both the “soft” and “hard” sides of the job before they decide to take it. Invest in your people. They are precious assets that will appreciate as you grow.

• Keep your business plan simple and clutter-free.

Don’t over-complicate your business plan. It should be easy to follow, easy to execute and easy to modify. Clarity is more important than bulk. Use the plan as a compass to guide your business. Keep it clutter-free.

• Live more like a farmer than a parachute salesperson.

A parachute salesperson drops in and stays for a moment. A farmer, on the other hand, plants different seeds to mature at different times and harvests them constantly. Properly nurtured crops (customers) can take care of you for the rest of your life.

• Overhaul your business to survive.

Given the choice between staying with a sinking ship or finding a new boat to float, overhauling your existing business may be your only chance for survival. For example, if you already have a website, start a monthly online newsletter. If you already have one that has become popular, offer its content to customers or vendors in your industry. You want to increase the odds that your customers will find your business offerings valuable.

• Prepare yourself to work hard.

Remember the days when you took long walks in the park, picked up seashells by the seashore or watched television for a couple of hours in the evening? Those days are gone forever. Starting a business takes lots of hard work. Don’t be in it to make fast money. Be in it because you love what you do and it doesn’t feel like work.

• Stay focused, do something sensational and keep going.

Blah, blah, blah and more blahs. That’s what people are sick and tired of -- the same old thing and too much of it. People are tuning things out like never before. Focus on your business, do something sensational and keep doing it until people buy into it. Sooner or later the blahs will turn into WOWs, you’ll get noticed and your business will turn into a yellow godzilla. Hard to ignore that, right?

• Stick to your knitting.

If you are great at marketing snacks, why start selling computers? Stick to what you do best. Make the most of your company’s core strengths.

• Take the long-term view of building your business.

Building a great, enduring business takes a lifetime. Make it your own. Enjoy every moment.

• Use common sense.

Mom always told you to use common sense. Why do it any differently now?

Sure, there’s a lot more to consider in launching a new business, but by practicing even a handful of these tips, you are guaranteed success.

Business plan - 2

 

• Researching your business idea and developing a business plan

Before starting a business, you need to answer the following fundamental questions.
Is your business idea viable?
Is there a market for your product/service?
What is that market?
Who are your competitors?
Do you have the financial capacity to get the business up and running?

These questions will be answered once you begin to research the market into which you wish to enter and when you set about establishing a business plan.

Researching your market
Whatever the product or service you are going to be offering, you need to be sure there’s a market for it — and that you can reach the right target audience too.

Take a good, long look at the market you wish to enter. In the long run, this research will also help you to evaluate the best forms of marketing for your business.

Research and look at the following:

1. Competitors. Examing your competitors will be vital for ensuring the success of your business. Find out:
Who your direct competitors are?
How successful are they and why?
What are their strengths and weaknesses?
What marketing do they undertake?

2. Reports and statistics. Look for information in market reports, government statistics, journals and industry association publications.

Once you’ve conducted this initial research and ensured your business idea is feasible, it’s time to formulate a business plan.

Establishing a business plan
A business plan is essential for any business, no matter its size. Generally a business plan should cover the following:
your business goals
marketing initiatives
industry research
operations/management plan
financial plan

Remember, your business plan should be an ongoing initiative which is reviewed regularly. After all, it’s the blue-print for getting things right.

Obtaining finance
Having finance — and the right amount of it — is crucial for the ongoing success of your business. Your business plan should cover you financial arrangements for start-up.

Be sure to contact your local banking or financial institution for finance options. Consider other sources of finance too. For the best advice, consult a business advisor and accountant — and have a solicitor look over any loan contract.

• Naming your business

The name of your business could have big impact on its future. So take the necessary amount of time — and steps, to get it right.

When choosing a name, consider the following:
Competitors. Look at what your competitors have named their businesses and try to set your business apart.
Business goals. What do you want to achieve with a name?
Branding and marketing. Will the name work in the marketing and branding initiatives you have set out in your business plan?
Market/customer appeal. Choose a name that’s easily remembered — and one that’s easy to spell and pronounce too.

Get others involved and brainstorm ideas around the room. Once you have a few options, try them out on different people to see their reaction. Check with the Australian Securities and Investment Commissions National Names Index to see whether your chosen name has already been registered — this way you’ll know whether the name can "officially" be used.

Once you’ve decided on a name, do not forget to register it with the proper channels (see below for how to register a business name). You should also ensure that your chosen business name does not conflict with any registered trade marks. This can be done through IP Australia.

• Choosing a business structure

There are several different types of business you can operate under — here’s a brief overview of your options.

Sole trader: a type of set-up whereby the business has no separate legal existence from its owner. You can use a business name or your own name and as a sole trader you are responsible for the liabilities of your business.

Partnership: unlike a sole trader, a partnership involves two or more people starting a business. All partners legally share profits, risks and looses according to the partnership contract (which is established at the onset of the business).

Company (Pty Ltd): a proprietary limited company is the most common type of company used by small business. Unlike partnerships and sole traders, it has more regulatory requirements and is a legal entity separate from its shareholders/owners.

In order to choose the right business structure, it's best to seek legal and professional advice before making a final decision.

• The regulatory requirements of starting a business

Registering a company
All companies need to register a company name and Australian Company Number through the Australian Securities and Investments Commission (ASIC).

According to ASIC, when a company is registered under the Corporations Act 2001 it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions.

Registering a business name
You are required to register your business name with the appropriate State/Territory authority. However, this is not necessary if the business is conducted under your name or your business partner(s); that is, first name and surname, or initials and surname.

Registering your business name as a trade mark
At the start of your business, you might want to consider registering your business name as a trade mark to give you the right to use your business name as a means to distinguish your product/service from that of other businesses. IP Australia has more information on this.

GST, ABNs and TFNs
If you expect to have annual sales over $50,000, you have to register for Goods and Services Tax (GST). If you register for GST, you will need to apply for an Australian Business Number (ABN), register online with Australian Business Register.

Sole traders can use their own personal Tax File Numbers (TFNs) but partnerships and companies need to apply for their own. For more information, contact the Australian Tax Office.

State government licences
All states and territories are responsible for different business licences, permits, registrations and certificates. You will need to check with the appropriate state government body.

Council permits/requirements
You need to check with your local council to find out about zoning, health regulations and whether you need to lodge a Development Application or Building Application before your business can start.

Domain name registration
Whether or not you will be establishing a website for your business in the early days, think about registering your preferred website name early on if you want to have an Internet presence at any stage. You can search for and register a domain name at Melbourne IT. For more information on domain names, visit Australian Domain Name Adminstrator.

• Finding the right premises

When looking for a business premise, you should consider the following.
Location. Do you need to be located close to customers or are you able to service your clients remotely via the telephone or over the Internet? Do you need to be located close to suppliers?
Necessary features. What features must your premises have? i.e. size, street frontage, show rooms, parking or other special facilities.
Lease or purchase. Do you intend to lease or purchase your premises?
Working from home. Do you plan to operate your business from home?
Security. In any premises you consider, you’ll need to look at having the right level of security. Consider things like fencing and gates, lighting, entry and exit points.

• Insurance — protecting your business

Often overlooked but one of the most important parts of setting up a business, you must make sure you have the right insurance in place. After all, your business will be your livelihood.

What type of insurance will you need?
Depending on the type of business you’re running and the place from which you will be running it, you’ll need to consider insurance for the following.

Fire/other events: this is a must-have for any business operating from a premise. Depending on the insurance company, you will generally be covered for loss/damage from fire, storms, malicious damage or vandalism and accidental damage. Cover your business for damage to glass windows, signs and counters at your premises as they are often not included under fire/accident insurance.

Theft: be sure to protect your money, contents or stock from theft.

Legal liability: this type of insurance covers your business if you are sued for causing personal injury to another person (other than employees) or damage to property owned or controlled by someone else(public liability) or in connection with a product sold or supplied by your business (products liability).

Business interruption: this will cover you for a reduction in your business income as a result of damage to your property. There are often different levels of protection on offer.

Business vehicles: cover your business vehicles against accident, theft or attempted theft and fire.

Personal: if you’re going to be self-employed, look at purchasing life insurance and income protection insurance too.

Remember to:
Shop around for the best deal.
Make sure you do not under insure your business.
If you're working from home, don’t assume your general home and contents insurance will cover your business.
If you rent your business premises, your landlord's insurance could leave you out of pocket.
Seek advice to get the right insurance cover for your business.

• Develop a marketing plan

Following on from the ideas raised in your business plan, you should put together a carefully thought out marketing plan. There’s no point having a great product/service if it isn’t going to reach your target market.

Whether you want to build a brand or simply advertise your services, there are lots of initiatives you can take. You might not have the biggest marketing budget, but don’t let that stop you from being creative with your marketing plans.

NSW Small Business says your marketing plan needs to answer the question: why am I in business, what do customers want and why will customers buy from me and not my competitors?

According to the Australian Government’s business.gov.au, “a good marketing plan sets clear, realistic and measurable objectives, includes deadlines, provides a budget and allocates responsibilities.”

Make sure your marketing plan covers:
analysis of your current market
your business objectives
key strategies
steps to achieving your objectives
proposed budget
implementation plan

• Financial records/accounts

In order to ensure the smooth running of your business you should keep financial records to fully understand your operations and financial situation. This should begin from the word go. Think about employing an accountant to help you sort through the piles of paperwork and accounts.

Financial reports: check with ASIC to see whether your organisation is legally required to lodge certain financial reports.

Tax requirements: check with the Tax Office for any tax obligations with which your business must apply.

• Employing staff

Employees will be one of the greatest assets of your company, so spend the right amount of time and investment to find good people.

Legal requirements
As an employer, you have certain obligations under common law. You also have obligations under federal and state and territory laws, industrial awards and agreements, tribunal decisions and contracts of employment.

For information visit;
Department of Employment and Workplace Relations
Australian government small business website.