Small business is the backbone of the Australian economy.
According to one report, there are over 2.4 million businesses currently operating across the country. Of these, a whopping 98% are classed as small businesses, with some 66% of them being run by sole traders.
At 33%, New South Wales has more small businesses than any other state in the country.
The good news for those who are thinking of launching their own venture is that it is now easier than ever to do that.
The bad news is that it is not that easy. With 33% of small businesses failing within the first 12 months of operation, and up to 75% by the fifth year.
This is not to scare you, but rather to outline the difficulty of the task ahead. Which begs the question of how you go about successfully starting up a small business in Australia.
To help answer this, in this guide, I’ll go through 7 tips that should give you every chance of turning a profit.
1. Do Your Research
You’ll no doubt have an idea as to what you want your business to be.
But whilst it might be tempting to just launch your operation and work things out on the fly. It is crucial you do your research thoroughly before opening.
There are several questions you will need to ask yourself and answer honestly before you can even begin to write a business plan. Failure to do so will put you on the back foot from day one.
- Is there a requirement for the products/services I want to offer?
- Who is my target audience?
- Will my business have a physical store? If so, where?
- Who are my competitors and how can I be better than them?
- Am I ready for the commitment of running my own business?
Also, be sure to consider wider circumstances and opportunities.
For instance, in the short term, with Covid restrictions still in place, some business ideas might not be as attractive as they otherwise would be.
Likewise, with Brisbane winning the rights to host the 2032 Olympics, now might be the perfect time to launch a business to tap into that.
2. Prepare Your Business Plan
A robust and flexible business plan is essential for any successful business.
Firstly, it will give you a full understanding of what staff and funding resources you need in order to run your operation. Secondly, financial lending institutions will demand you have one prior to giving you approval for a loan. Thirdly, a well-thought-out business plan will give you a working guideline of what you need to do to meet your goals in the first 12 months to three years.
The plan will need to cover the following areas:
- An executive summary, that outlines the goals of your business
- A descriptive overview of what products or services your business will deliver
- Market evaluation and analysis that ascertains whether there is a need for the products you will offer
- Organizational summary which identifies key employees or players who are critical to your business success
- A marketing strategy that provides a detailed analysis of the promotional methods you plan to use to promote your business
3. Register Your Business
Having written your plan, it’s time to register your business with the Australian Government.
To do this, you will need to head to the Australian Government’s business registration service.
This free, and easy-to-use service will enable you to complete the registration process in just a few minutes.
It even has a handy tool that can help you decide on the tax registrations and business structure that would best suit you.
4. Secure Operating Capital
In order to get their venture off the ground, most Australian small businesses need funding.
Depending on your business, you may need to cover the costs of production equipment, office space, furniture, marketing expenses, and other daily operating costs.
These can be expensive endeavors. So, as many small businesses can often take quite a few months to turn a profit, you may need to approach one of the following for assistance with funding:
- Grants and funding programs: The Australian government runs various funding and grant programs for business owners that satisfy their eligibility criteria.
- Bank loan: Many small businesses rely on loans from major banks. You can check out Westpac’s business loans and finance guide to gain an idea of what types of loans may be available to you.
- Private investors: Australia has a good network of angel investors who regularly lend financial support, advice, and assistance to new business ventures.
- Personal savings: Some small business owners dip into their savings to get their business up and running.
5. Develop a Marketing Plan
Once you have secured funding, you will need to divert significant attention to how you will promote your products and services.
Unless you have a successful track record in marketing, it is a good idea to hire a specialist, or company, who can help you develop a plan.
Your plan should include strategies for the following areas:
- Website development and management
- Search Engine Optimisation (SEO)
- Social media
- Advertising channels
6. Consider Having a Soft Opening
One of the biggest mistakes new business owners make is to launch their business with a big grand opening straight away.
However, this is not always the best tactic as new businesses often have some teething issues. For example, the phone or till system is not working properly, or the staff might not be quite up to speed with your operation.
As a result, it is worth having a soft opening, which will give you time to iron out any of these issues, before officially opening your business to the general public.
Doing this will enable you to fully make sure all aspects of your business like the phone system, website, tills, and staff are running like clockwork.
This in turn will increase your chances of customers gaining a positive first impression of your business.
7. Ensure you have a work/life balance
Make no mistake, running a business is very hard work.
Whilst you will no doubt want to give it your all to make it a success, it is important that you get that balance right between work and life.
Take time to rest and relax. Catch up with family and friends. Ensure that date night is a regular occurrence if you are in a relationship. Keep up the exercises and hobbies you like to do for recreation.
All of this will ensure that you have time away from your business to recharge your batteries. This in turn will also ensure that when you are working on your business, you will be on top form.
Launching a new small business is always an exciting, yet challenging time.
After all, you have an idea, that you want to turn into a serious money-making venture.
However, it is a very difficult endeavor to undertake, and you will for sure have your work cut out for you.
That said, if you follow the steps outlined above, you will at least be giving yourself every chance of making it a success.