09-Aug-2020 By - Anna Eydlish
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Starting a business for the first time and worried about failure? If you’ve thought about opening your own business, you might have begun to look for advice. There are so many tips for starting a new business out there that choosing which ones to follow can get confusing.

Before you start selling your product or service, you need to build up your brand and get a following of people who are ready to jump when you open your doors for business.

As a team of seasoned entrepreneurs, we can tell you that there is no perfect formula for starting a small business.

We’ve learned that the best business advice usually forces you to think in a new way. So, we’ve compiled a list of tips for starting your own business that you might not have heard.

When you start a business, there are tax and super responsibilities you need to be aware of, including:

  • the tax implications of your business structure
  • whether you’re entitled to an ABNExternal Link
  • registering your business
  • records you need to keep
  • deductions you can claim.

Virtual Cfo

What will make or break your business? What determines if it will be a success?

Here are some tips for starting a business and making it succeed.

Know yourself, your exact motivational level, the amount of money you can risk, and what you’re willing to do to be successful. 

Sure, we all want to make millions of dollars. But what are you willing to give up to reach that goal? How many hours a week will you work on an ongoing basis? How far out of your comfort zone are you willing to stretch? How far will your family stretch with you? To be successful, keep your business plans in line with your personal and family goals and resources.

Great resource websites:

Be passionate about what you do

You don’t have to love every aspect of your business (and you probably won’t), but you do have to be fired up about it. You’re going to devote a lot of time and energy while building it into a successful enterprise, so it’s essential that you genuinely enjoy what you do, whether it be running fishing charters, creating pottery, or providing financial advice. 

Make sure you’re on the right track by asking yourself whether you feel the excitement when you think of the business, and if it is worth the sacrifice of your time and money. If your answer is “no” to any of those questions, then it probably isn’t right for you.

Seek professional help 

On the other hand, just because you’re starting a business doesn’t mean you have to be an expert on everything. If you’re not an accountant or bookkeeper, hire one (or both). If you need to write up a contract, and you’re not a lawyer, hire one. You will waste more time and possibly money, in the long run, trying to do things yourself that you are not qualified to do.

Choose the right business for you.

The old formula – find a need and fill it – still works. It will always work. The key to success is finding needs that you can fill, that you want to fill, and that will produce enough income to build a profitable business.

Before you get started

As you get your business up and running, there are a few things you may need to consider, including:

  • when your tax and other obligations start – this will depend on whether you are in business yet
  • the implications of the structure you choose – tax and legal
  • the location of your business (such as working from home).

Get the money lined up. 

Traditional lenders don’t like new ideas and giving money to new businesses that do not have a proven track record. Save up first, as well as approach potential investors. Work out your financial fall-back plan first, and it will ensure you do not hit a snag while building your business due to running out of money.

Be sure there is a market for what you want to sell.

One of the most prominent mistakes startups make is to assume a lot of people will want to buy a particular product or service because the business owner likes the ideas or knows one or two people who wish to the product or service. To minimize your risk for loss, never assume there is a market. Research the idea. Talk to real potential prospects (who aren’t family and friends) to find out if what you want to sell is something they’d be interested in buying, and if so, what they’d pay for the product or service.

taxation calculation on paper

Be professional from the get-go

Everything about you and the way you do business needs to convey to others that you are a professional running a serious business. That means your professional “suite” should be complete and on point, including quality business cards, a business phone, and a business email address. Most importantly, you will want to conduct yourself courteously, treating everyone as if they are your next client.

Start your business while you’re still employed

How long can most people live without money? Not long, and it may be a while before your new business makes any profits. Being employed while you’re starting means, you will have money in your pocket to invest in the market, as well as to ensure you can keep up with your monthly living expenses.

Are you already in business?

It is essential to understand the differences between a hobby and a business for tax and other purposes.

Your tax and other obligations start once you are in business. 

Get legal, accounting and taxes right the first time

It’s much more difficult and expensive to fix a mess afterwards. Does your business need to be registered? What about GST? Will you have to have Professional Indemnity Insurance? How will the form of business ownership you choose to affect your legal and tax situation? Learn what your responsibilities are before you start your business and operate accordingly.

Research your competitors 

No matter what type of business you are starting or running, you will have competitors. Even if there is no other business offering precisely what you plan to sell, there is very likely to be other products or services your target customers are using to satisfy their need. To be successful, you need to research the competition and find out as much as possible about what they sell and how they sell it. Competitive research is something you should plan on doing on an ongoing basis, too.

Don’t do it alone 

You need a support system while you’re starting a business (and afterwards). A family member or friend that you can bounce ideas off, and who will listen sympathetically to the latest business crisis is invaluable. When you’re starting a business, experienced guidance is the best support system of all, so finding a mentor in your industry will also allow you to learn from someone who has already been through the startup process.

Characteristics of a business checklist:

There is no single factor that determines if you are in business, but some of the elements you need to consider include:

  • You’ve decided to start a business and have done something about it to operate in a businesslike manner, such as 
    • registered a business name, or
    • obtained an ABN.
  • You intend to make a profit – or genuinely believe you will make a profit from the activity – even if you are unlikely to do so in the short term.
  • You repeat similar types of events.
  • The size or scale of your activity is consistent with other businesses in your industry.
  • Your action is planned, organized and carried out in a businesslike manner. This may include   
    • keeping business records and account books
    • having a separate business bank account
    • operating from business premises
    • having licenses or qualifications
    • having a registered business name.

If you aren’t in business yet, it is essential to keep these factors in mind as your activities change or grow, so you’ll know when you need to register for tax and other business responsibilities.

Bookkeeping with xero

Get clients or customers first. 

Don’t wait until you’ve officially started your business to line up clients, as without them, your business will not survive. Spend time in the commonplaces of your potential market to network or connect with people over online social platforms, such as LinkedIn, then set up meetings to build on these contacts and provide possible future leads. You can never start marketing yourself too soon.

Plan to succeed

Suppose you’re not seeking investors or putting a considerable sum of money into your business. In that case, you may not need an elaborate business plan, but you still do need a plan – one that specifies your goal – your destination – and then lays out at least a skeletal roadmap for how you’ll get to where you want to go. The plan will change as you progress and learn more about your customers and competition, but it will still help you stay focused and headed in the right direction. Use our business planning worksheet to help develop that basic plan.

Know the Operational Needs 

Most people who are thinking about starting a business focus on what they’ll sell and who they’ll sell it too. What they often don’t consider is how the business will operate. 

For instance, if you’re selling items, how will they be delivered? How much will customer support be needed – either to answer questions about the product or to respond to people whose shipments haven’t arrived? Will you need to accept credit cards? Will you invoice customers? Who will follow up to be sure you’re paid? Who will build and maintain your website and social media presence? Will you be able to use a virtual assistant for such tasks, or will you have to hire employees? Even if you’re starting a small personal service business, these are issues you should consider and plan for.

Is it a hobby?

If you determine your activities are a hobby, then you do not have any additional tax or reporting obligations.

If your activities are a hobby but you supply goods or services to businesses, they may request your ABN when they pay you. Because you do not have an ABN and your activity is done as a hobby, you should use the ‘Statement by a supplier’ form. This will avoid the business you are supplying having to withhold an amount from their payment to you.

Don’t procrastinate

I’ve heard some people advise would-be business owners to not move ahead with their business until they have investigated every last detail of the business they want to start and are sure it’s all going to work and be profitable. The problem with that approach is that it leads to procrastination. No one ever really has all the pieces in place – even after they’ve started their business. Yes, you need to research the market, have a rudimentary plan in place, and do things like getting a tax id if required, register with local officials, if needed, etc. But if you try to make everything perfect before you launch, you may never get around to starting the business at all. 

Write a business plan 

This is a crucial step before starting your business, as it provides you with invaluable information. Creating a business plan will allow you to understand both operational and financial goals better, providing crucial budget and marketing strategies. The main reason for doing a business plan first when you’re thinking of starting a business is that it can help you avoid pouring your time and money into something that will not succeed.

Start on a small scale before going all out

Some people believe that entrepreneurs are risk-takers. But for the most part, successful entrepreneurs don’t like walking blindfolded on a limb. Instead, they take controlled risks. They test an idea on a small scale, then build on what works well, tweak what shows promise, and discard the disasters.

Please don’t fixate on mistakes or get demoralized by them

The difference between successful people and everyone else is that successful people learn from their mistakes and move on. They don’t dwell on failure, blame the economy, curse their bad luck, or blame other people for their fate. If the path to their goal is blocked, they look for an alternate route or sometimes choose a different, more attainable goal.

Do your research 

You’ll do a lot of research writing a business plan, but that’s just a start. When you’re starting a business, you need to become an expert on your industry, products, and services, if you’re not already. Joining related industry or professional associations before you start your business is a great idea. It will keep you informed on new information in the market, and help you keep track of competitors actions.

Guest post by : Anna Eydlish Form -

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