With sure purpose and a pounding heart you make the life-altering decision to take control of your destiny and start your own business.
Where to from here?
The answer is simple and it is the foundation on which my clients and I have started and grown many successful businesses over the past two decades:
Clarity, Focus and Determination
Step 1: Clarity.
Be crystal clear about what you want and where you are headed.
Immerse yourself in your new world. Research the industry for local, national and international perspectives on the key players, the stakeholders, the investors and the customers.
Understand past, present and future trends for your industry. Examine allied industries. Include research on the likely impact of competitors, culture, laws, technology, politics and economics.
For ongoing success, always ensure that your business serves the future and does not repeat the past.
Clarity is achieved when the vision and the outcomes in your mind’s eye are so fine-tuned, you can see them long before you ever encounter them.
Step 2: Focus
The adage ‘the only way that an ant can eat an elephant is one mouthful at a time”, holds true in business.
Never allow yourself to be daunted by the enormity of the mission. Rather, concentrate on the importance of the task at hand.
Develop a list of actions that must be done to get you to your place of clarity.
Prioritise them, break them down to a set of sequenced smaller tasks that will cumulatively achieve your goals. Set a timeline and deadline for each and start marching through them.
Step 3: Determination.
Never, never, never give up.
If you are truly passionate about achieving your ambitions, nothing can stand in your way.
Inevitably, you will encounter detours. You will have alternate and new decisions to make. But it is how you choose to deal with each of these that will define your and your business’ success.
Being self-employed makes you absolutely responsible for your destiny. Often the decisions are difficult, you may not even like them, but that is no reason not to make them.
You will not always enjoy every step of the journey, but you will revel in the euphoria of having mastered and worked through the discomfort. This pleasure lasts far longer than any wallowing in temporary disquiet you feel as you push through the unease of the task at hand.
Focus, Clarity and Determination are three simple secrets that form the foundations for a business plan. Simply put, your plan is a combined human resource, marketing, logistics and financial written preview. It relates to how you intend to grow the business to a pre-defined point within a specified time period.
Step 4: Where’s the money going to come from?
One of the most important and ongoing dilemnas you will face is ‘Where will I get funding from and how much will I need?’
Funding requirements fall in to two broad categories – money needed for the day-to-day business operation and money needed for long-term purchases or activities.
Short-term funding generally comes from owner savings, bank overdrafts, personal loans, short-term finance, creditors or retained earnings. Long term funding may originate from banks, finance companies, solicitors and trust companies, federal state or local government grants or subsidies, merchant banks, suppliers, venture capital companies or business angels.
Step 5: The structure of your business
As you drive forward with your ideas and motivation, work with the business start up mechanics. These are mostly statutory.
Your first step is to decide on the legal structure of the business. This will generally be determined by your start up costs, number of owners and projected income for the next 3 -5 years.
For most start-ups, there is a choice between operating as a sole proprietor, partnership or incorporated company (pty ltd).
A sole trader entity is simple to create, the least expensive option and the easiest to discontinue. On the downside, it makes you personally totally liable for all debts incurred. Also, it is the most challenging model for raising capital – banks and venture capitalists don’t like lending money to individuals.
Its simplicity makes it the most preferred option for start-ups. You need do nothing more than register a business name and apply for your relevant GST status.
A partnership is a business entity of 2 or more participants. It is easy to establish, often requiring no more than a partnership agreement.
Its advantages are that it allows for the fusion of complementary skills, a division of profits and a larger source of incoming and on-going capital.
The disadvantages are that there is unlimited liability for the partner with greater assets, it is difficult to sell or dispose of without dissolving the partnership, there is potential for authority or personality conflicts, and partners are liable for all debts incurred by the other partner(s).
This structure is often used by professionals such as legal, accounting and consulting firms.
The third option is an incorporated company – pty ltd.
Its advantages include the limited liability of the shareholders and an ability to attract capital. Ownership is transferable and it attracts larger pools of skills, expertise and knowledge. Its disadvantages include the cost and time required for the incorporation process as well as more rigorous taxation requirements and legal restrictions.
This structure is generally considered by companies turning over moderate to significant income.
Consult your accountant and/or legal advisor before deciding on structure.
Step 6: Registering your business name
Every business, except if trading under a person’s name, is required to register a unique business name, regardless of the structure they choose. This involves the completion and filing of a short form, stating your preferred business name, its intended operations and the registered owner(s) details.
Forms and further information can be found at:
Australian Capital Territory www.rgo.act.gov.au
New South Wales www.fairtrading.nsw.gov.au
Western Australia www.docep.wa.gov.au
South Australia www.ocba.sa.gov.au
Northern Territory www.caba.nt.gov.au
Before attempting to register, it is wise to check at www.asic.gov.au (business name search option) to see if your preferred business name is available.
When choosing a business name consider its usage on the web and its availability as a domain name (www.businessname.com.au). It may be worth checking the availability of your business name as a domain name at one of the domain registration providers listed at www.auda.org.au/registrars/.
Step 7: Registering for GST (Goods and Services Tax
Goods and Services Tax (GST) is a broad based tax of 10% that applies to the sale of most goods and services. A business is required to register for GST if their turnover is greater than $50,000 per annum. Further information is available at www.ato.gov.au
Step 8: Registering with the Tax office for an ABN – Australian Business Number, PAYG – Pay as You Go and ETP’s - Superannuation and Eligible Termination Payments
An ABN is a unique, enduring series of nine numbers given to every business by the Australian Tax Office as a means of identifying your business and for GST purposes.
You will need both an ABN and GST registration to claim any GST refunds you accumulate on purchases you make and so that businesses you supply can claim their refund for goods and services you provide.
If you do not quote an ABN on your tax invoice for goods you provide, the purchaser may withhold tax at the top marginal rate when they pay you. Consult your accountant for further information or contact www.ato.gov.au (Australian tax office or www.asic.gov.au, (Australian Securities & Investments Commission) http://abr.gov.au/ABR_BC/ to register.
Step 9: Insurances
There are a range of insurance products designed specifically for businesses and business owners. You should consult an insurance broker to discuss your circumstances and your business needs.
www.naib.com.au National Association of Insurance Brokers is a useful reference.
Step 10: Get advice
The two most important lessons you need to learn in order to grow your business is to that you don’t know it all and you must readily reach out to people who can help you.
Surround yourself with great business advisors and mentors and never be afraid to ask for help.
If you are truly passionate and committed to your cause, can maintain your clarity focus and determination, then starting up and running your own business will be one of the most joyful experiences you have.
It will at times frustrate you, it will attempt to control you, it will act as your mistress and attempt to seduce you, but once you learn to control it, it will be the most faithful companion you have.
It will allow you to exhibit your true worth, and fulfil your life’s desire in a time, manner and place of your own choosing. You will become the master of your destiny.