Australia has more than 2 million small or medium businesses. Together, SMEs contribute greatly to our economy and are responsible for employing much of our labour force. Whether it’s our nation’s desire for self-made success or our ‘DIY’ attitude, it’s evident Australia has an entrepreneurial spirit.
Starting a new business is exciting. It can also be nerve-wracking, stressful and a bit overwhelming. After all, you want it to succeed. We know how it feels because Dexterous started as ‘a new idea’ back in 2015. As we’ve grown, we’ve supported many new businesses to find their feet. Our guidance and expert advice can be the difference between a wobbly beginning and a solid starting block.
That said, 2020 has served society a huge dose of disruption. Bushfire, an international pandemic, and Australia’s first recession in nearly 30 years has forced change across the board. It’s ‘evolve or die’ in business today, more than ever before. So, regardless if you’re starting anew after redundancy, shifting gears with your current business or you’re simply keen to ‘go out on your own’ – we’ve laid out the following 4-step guide with advice for entrepreneurs and start-ups to help you map your way.
1. Begin testing
So, you’ve got a killer idea. You’re feeling excited, enthusiastic and ready to throw everything at it. It’s such a good idea it’s going to be a success. Right?! Our first piece of advice for entrepreneurs? Take this enthusiasm and start testing. Is there a market? Can you find customers who want to buy it? Will they buy it? How will they buy it, and how often? What price will they pay for it? Reach out to objective contacts in your own professional or personal network that can test out your idea and offer candid feedback. (Spoiler alert: don’t ask Mum. She’ll definitely love it.)
Real-life example: The owner of a burgeoning skincare business crafted her products at home. Family and friends raved about her products when they received them as gifts. However, to prepare her business for market, the owner wanted authentic feedback from people she didn’t know. So, she connected with unknown testers to try her products at cost price in exchange for a review. The real-world results from this testing campaign helped inform the company’s complete offering. The product line was refined and they learnt that the ‘most popular’ product was received indifferently and a tough sell to market.
2. Start budgeting
Firstly, work out how much money you think you will need to start your business. Then double it. The thing about business is that things end up costing a lot more than you think they will, especially when you are just starting out. So, be sure to map out a budget for both your business and your personal circumstances. It’s smart to run your start-up costs by an accountant too – an expert eye can quickly recognise any costs you might have missed.
Real-life example: Our client Maria was starting a business to sell baby wares. As her accountants, Maria shared her business budget with us for professional input. Immediately we noticed a very important line item was missing – product insurance! This can be costly in this industry and its addition really changed her budget. It led to Maria’s re-evaluation of her start-up capital and whether her product line prices should be increased.
3. Make a business plan
The most common stumbling block for new businesses is knowing how and where to start. The key to deciphering your direction is to just start. Outlining a business plan doesn’t necessarily mean writing a detailed document for your business; it can be as simple as mapping out your idea and determining your required steps to becoming the business.
Real-life example: One of our relatives had a business idea. Unsure where to start, she downloaded a ‘100+ plus business plan template’ which made her feel completely overwhelmed by the level of detail. Instead, we advised her to use the headings in the business plan as a checklist for her business. For example – what is the idea? Who is the target market? How do you register your business? What insurances do you need? As you develop your business plan, it’s a good idea to book a consultation with an accountant or business advisor. They are skilled in identifying any areas — particularly compliance — that you need to be aware of.
4. Adapt your vision for 2020’s challenges
If you have completed Steps 1-3 and have an insatiable thirst to just get going; don’t hold back just because of the current economic uncertainty. Some operators and industries have thrived in the current conditions.
So, if you’re a consultant or tradie starting your own operation, or you plan to make your home office your permanent workplace in your current role, learn about the tax deductions and expenses you can claim. In addition to business running expenses, find out if you can claim deductions for occupancy expenses or if you might be susceptible to Capital Gains Tax should you choose to sell your home down the track. There’s a lot to consider. If you’d like us to help you navigate tax and accounting as you focus on starting your business, please get in touch.
Is starting a business new to you? It’s not to us.
Being your own boss can bring so much excitement, fulfilment and flexibility. However, there are numerous critical factors, especially financial, that you must be on top of as you start. Dexterous Group can guide you by offering expert advice or managing any accounting and business needs your business has — it’ll help reduce stress, simplify your workload and give you more time to focus on launch!