13 December 2021
Do you have what it takes to start your own business?
Two small business owners provide expert tips on what you need to ask yourself before starting a business. Check out our 6 considerations for business success.
Who amongst us can say they’ve never thought about starting their own business? We all dream of opening a cafe with friends or selling that jewellery we make for fun to start making a profit. But often the first step of starting up can be the hardest.
There are over two million small businesses in Australia, many of which have a solo owner/employee (also known as a ‘nano business’). They account for a whopping 97% of all businesses (and rising), a fact that goes to show how many of us want to step away from the rat race and start something special. The appeal of running your own business is obvious. You can theoretically make unlimited money, have freedom to set your own hours and work in the location of your choice. Best of all, you’ll likely be pursuing something you truly enjoy.
However starting your own small business also comes with added risk. It means lack of security, and sadly a very high chance of failure. According to the Australian Bureau of Statistics, more than 60% of small businesses stop operating within three years from launch.
We’ve spoken to two successful small business owners who took the plunge and went out on their own. We uncovered what useful suggestions they have for anyone wanting to start their own small business.
Rebbecca ‘Becca’ Stern started her lockers-as-furniture business, Mustard, from her Newcastle home, in partnership with her sister in London. Thiago Giraldi is a Brisbane-based veterinarian who decided recently to take a leap and start his own practice.
Two very different small business owners, both of whom have mountains of helpful advice for anyone considering whether or not they should take the plunge.
Is there a market for it?
Having a great idea or being able to spot a good business opportunity is core to the success of starting your own business. You need to either do something different or do something better.
Becca and her sister Jess came up with the idea to design and sell lockers while taking some time out following the birth of her second son. She’d always loved the look of the old vintage lockers that she’d collected over the years, but couldn’t find anywhere to buy new ones with the same style, “I realised there was an opportunity because I’d tried to find nice lockers myself and there really was no one doing it” says Becca.
Thiago similarly came to the decision to open his own small business when his wife was on maternity leave with their first child. After working as a locum for a number of years he had seen what worked and what didn’t and wanted to take those learnings to open his own veterinary practice.
Their advice; first up, do some research. Whether that be sitting on Google to find anyone doing something similar or creating a survey to quiz a sample of the market on their appetite for the idea. Just because someone else is doing something similar, doesn’t mean you can’t compete. You just need to figure out how your product or service is different.
You can also sense-check your idea with trusted friends and business experts. “Through our whole business journey my sister and I have had each other to bounce ideas around. You need people around you who are encouraging but also honest,” says Becca.
Do you have a solid strategy?
You don’t have to watch too many episodes of Shark Tank to know that enthusiasm is nothing without a solid business strategy. A good understanding of your target customer, a marketing plan, financial plans and forecasts are all crucial.
An early factor in Becca’s Mustard journey was the conscious decision to make things scaleable. This planning has been a key factor in their success over the last four years. “When we first started Mustard, I considered doing the shipping in-house. I was going to put a shipping container of lockers in our backyard and manage it all myself. Thank goodness we decided to outsource it and get a warehouse partner!” say Becca.
Thiago’s partner has an MBA and they worked together to develop a solid business plan which set the direction and the roadmap for the business. “I had a lot of stuff in my head, but having a business plan made sure I was clear about what my vision was and who my target demographic would be,” says Thiago. “I realise now that without that plan, without the realistic foundation, it was never going to be a success,” he adds.
Do you have the resources?
While you don’t need to have a massive amount of money, being realistic about the funds required to set up and sustain the business in its early stage is vital. One of the biggest reasons for failure in small business is a lack of capital. It’s a common story that people go into business under-capitalised and they just run out of money just before the success kicks in.
To start a business, you have to have both funds plus the time and freedom to work on its growth. Making sure you do is part of creating a solid strategy.
One of the first people Thiago engaged to help him was a broker who specialised in medical industry specific loans. “I had an idea of how much I needed, but I went to the broker and asked ‘Can I get a loan? How much can I loan? What do you need from me to make it happen’, ” says Thiago.
In order to make the business attractive to a lender, you’ll need to ensure you have a well thought-through business plan. “The business plan also helped me with gaining finance. It was all in there and it was realistic. You keep going back to the business plan” explained Thiago.
Do you have support?
Both Becca and Thiago had the support of a family member to help them start their businesses; but more often than not, it’s just as important to engage the professionals.
Once Thiago had secured his business loan, he started to build his team, including hiring an accountant, financial planner and solicitor. “At the beginning the only thing you truly do on your own is have the idea. Then you need good people around you to help make it happen,” suggests Thiago.
Becca echoes the same sentiment when it comes to the importance of your team in making your idea become a reality. “The biggest lesson we’ve learnt through all of this has been that we absolutely couldn’t have done it alone. Find good people, build a great team and together you can get through any hurdles,” says Becca.
Many local councils and chambers of commerce can provide you with a network of contacts for finding the right support.
Do you have what it takes?
Running your own business means you have to be disciplined and self-motivated. There are well researched qualities that successful business people have. They are often visionary, determined, resilient and are comfortable with taking on what can be a high degree of risk.
For Thiago, working as a locum gave him the chance to see how different vet clinics were run. From the large corporate franchises to the smaller family-run businesses, it helped him to understand what was required, what the risks were and how he might operate his business differently.
One realisation that is quite common amongst new business owners who have previously worked for large companies or in larger teams is that they now are responsible for everything. “One of the strangest things has been the realisation that if I don’t do something, it might not get done. Things don’t happen by magic, they take work,” he says. “From going to Kmart to buy a microwave to negotiating a half and million dollar lease; at the end of the day, it’s my business and it’s all up to me,” Thiago adds.
Is your heart in it?
Talk to anyone who runs their own business and they will very quickly get to the long hours and hard work involved. Being passionate about what you do will help carry you through the effort required and the ups and downs of being your own boss.
It’s critical to have the right expectations. That romantic picture you have in your head of how much fun you’ll be having doing your thing and answering to nobody will come, but not before some good old blood, sweat and tears.
While you need to hold that image of success in your mind to drive you forward, also make sure you picture yourself doing the little, less glamorous parts of the business. If for example you see yourself in your cafe, laughing with customers and staff while putting the decoration on a latte, also picture yourself at night, on your own mopping the floor and stacking tables.
Get clear on your vision, make a strong plan, be realistic with your expectations and you’re halfway to living your dream.
For more great information about starting your own business go to ASIC.
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