On your marks, get set …. GO! You’ve ditched the job (hopefully gotten a golden handshake or gardening leave), taken the plunge and are now your own boss. Congrats! Massive step, and one you need to be proud of.
Are you ready though? Have you set up all the things that need setting up?
Some simple things to consider and implement to help ensure your business is not one of the 44 small businesses closing per day (gulp!)
1. Have you got a business plan in place?
A solid plan helps you start off strong and ensures you stay that way, and is one of the first things you should do. The plan, if done properly, will serve as a guide for your decision making process for the life cycle of the business – including whether you should be in business or not. A business plan is also needed to satisfy lenders or investors when approving a loan or making an investment.
2. Have you decided on a business name?
The Name Game: every business needs one. How do you choose a memorable name that kind of describes what you do, and that is not gonna get you sued by someone else who has already has that name? You need to check with ASIC on the availability of that name, on the domain name registration availability and on any trademarks over the name.
3. Have you thought about the structure that you will operate your business from?
What structure you will operate in – Sole Trader, a company (Pty Ltd), partnership or a Trading Trust, and what is most suitable for you? Have you applied for an ABN, Business name and registered for a Tax File Number?
You may also need to register for PAYGW if you are planning on employing anyone or paying yourself a salary. GST registration is compulsory if you earn above $75,000.
The above structures all have different legal implications, different tax reporting requirements and different compliance requirements.
4. Have you got your logo, business cards, and domain name reserved and set up a website?
Business cards do not need to be OTT and fancy, but they do need to show you are serious about your business and you are professional. Your website is your gateway, especially if you are going to be selling online. To save costs, this could be a shop front like Shopify or Etsy or Squared. Invest in great photos and images that sell your product or services. The age old adage “A picture is worth a 1000 words” has never been so true.
5. Do you know your numbers?
You may have hated Maths at school – but at the least, you need to know numbers coming in and going out, and how to read a profit and loss and a cash flow (these are different!)
Have you costed your product and service? You need to have worked out whether your product or service will actually break even, let alone make a profit.
Do you have an accounting system? Excel to start off with is fine, but I guarantee you what you spend on a cloud based accounting software (like XERO, MYOB Essentials, QuickBooks etc) monthly subscription will save you ten-fold in your financial administration time.
6. Do you know your customer?
Who are they, what do they like, what do they WANT? And, what is your marketing message saying – how your business will satisfy that want – and you only have 8 seconds to do it. That’s it. Then they move on.
Be crisp and concise. What do you do, and why you do it better than anyone else. Price point is not always a factor. If you are best at what you do, people will pay more. You don’t have to be cheaper than chips to get business.
Open a bank account for the business and keep things separate from your personal finances. If the business needs a loan – do a transfer into the business bank account – and record it as a loan. This holds the business accountable, and allows you to track how much you are making and spending.
Still on board? Hope you are not running in the opposite direction. Just remember, the biggest mistake a small business can make is to think like a small business. Think big. Go big! Grow big!