According to data gathered by the Australian Small Business and Family Enterprise, over nine in every ten businesses operate as a small business enterprise. Small businesses also make up 33 percent of Australian’s Gross Domestic Product (GDP).
With small businesses covering virtually almost all industries, they are vital for the health of the Australian economy. Over 40 percent of the workforce comes from the small business sectors, and they comprise over 12 percent of the total company tax revenue in 2016.
Six Easy Steps in Starting Your Own Small Business
Starting a new business endeavor is equally both exciting and terrifying. On the upside, you are now finally your boss. You can now start pursuing your passion and threading your destiny.
On the downside, however, running a business is not a walk in the park. There are plenty of things you need to do even before starting a business. Among others, you have to get the necessary licenses, create a business plan, and plan your finances.
Nonetheless, we have outlined six easy and necessary steps you need to embark on before opening your business. By following these crucial steps, you help your business set a foundation for ultimate business survival and success.
Research the Market
If you already identified your business idea, it is now high-time to test it in reality. Before proceeding any steps further, validate your business idea if it would sell on the market. For a small business to succeed in any given industry it must be able to satisfy a need, solve a problem, or offer something that is in demand.
There are plenty of ways for you to determine this need. You could do a focus group, research, or simply trial and error. As you test your product or service in the market, ask yourself these questions:
- Is there a demand from the market for your product or service?
- Who needs it?
- Are the other businesses offering the same product or service?
- What will the competition be like?
Be sure to answer all of these questions before taking a plunge.
Create a Business Plan
For your business idea to become a reality, you need to create a business plan. A business plan is essentially the blueprint of how you grow your business from its start-up phase, establishment, and eventual growth. Regardless of what type of business, you would need to have a business plan.
Layout Your Finances
Opening a small business does not necessarily require you to spend a lot of money. However, you need some initial investment to cover expenses before you could turn a profit. List out all the one-time startup expenses, including licenses and permits, equipment, marketing research, property lease, and insurance.
You need to anticipate that you will need to keep your business running for at least a year using your startup money.
With an estimate in mind, you now need to figure out ways how you can fund your small business. You could opt to avail of small business loans and grants from the government, find an angel investor or start from the ground up by bootstrapping.
Select a Business Structure
There are several business structures your small business could choose from. It could be a small proprietorship, a limited liability company, a corporation, or a partnership. Selecting your business structure is crucial as it would determine your liability, how you file your tax, and even your business name.
Determine Your Business Location
Landing a good business location is another crucial thing to consider. In general, an excellent business location is one that helps you save on electricity, taxes, water, and transportation. You could operate your business in your home, a private office space, or a retail area.
Your chosen location should work for the type of business you are venturing into. If your business is a niche product or service, consider locating your business where most of your competitors are. If you are into manufacturing, an ideal location is where manpower and raw materials can easily be found.
Bring in Professionals
While being an entrepreneur means you have a set of excellent skills with you, it does not mean you know everything about running a business. For you to have a streamlined, efficient, and successful business process you need to hire the services of professionals.
Although most small business owners only hire legal counsel when their company gets into trouble, having commercial lawyers at the inception of your business pays a huge return in the long run. In the same way, hiring an accountant is good for your business’s financial health.
With all bases covered, you can now start promoting your business. Success does not happen overnight but with a well-laid-out plan your chances of succeeding in your business venture increases.