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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
- Veröffentlichungsjahr: 2023
The big ideas that you'll need to run your small business So, you've decided to take the plunge into being an entrepreneur. (Congratulations, by the way!) Do you need advice about business structures, marketing, hiring employees, keeping the books or modelling financial scenarios? You can do it all, with Getting Started in Small Business For Dummies. Turn your bright idea into a real-world success and have fun while you're at it! Planning is the trick for succeeding in small business. This process needn't be daunting, especially if you can get the timing right, pick a strategy that works and chart a sound financial course. And if your best-laid plans go sideways, there's always hope, and a practical way forward, right inside this book. * Decide whether small business ownership is right for you, and assess the viability of your business idea * Devise a clear strategy so you can get ahead of the competition * Master the marketing must-haves to build a successful brand * Find that extra bit of profit with smart business decisions * Hire the right employees and build a winning team This latest edition is fully updated to respond to Australia's rapidly changing business environment, delivering an easy-to-understand guide which will help you get your business off the ground!
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Getting Started in Small Business For Dummies®, 4th Australian Edition
Published by
John Wiley & Sons Australia, Ltd
42 McDougall Street
Milton, Qld 4064
www.dummies.com
Copyright © 2021 John Wiley & Sons Australia, Ltd
The moral rights of the author have been asserted.
ISBN: 978-0-730-38485-4
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Getting Started in Small Business For Dummies®
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Table of Contents
Cover
Title Page
Copyright
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Where to Go from Here
Chapter 1: Is Small Business for You?
Working for Yourself — A Dream Come True?
Working for Yourself — Reality Strikes
Factoring Yourself Into the Whole Deal
Staying Safe or Inventing the Wheel?
Getting Clued Up
Believing in Yourself
Chapter 2: Finding the Path that Works for You
Deciding What Path You Want to Take
Wearing Different Hats
Building a Business with a Life of its Own
Appreciating the Limitations of Your Business
Chapter 3: Creating Your First Business Plan
Getting Started with Your Plan
Step One: Describing Your Business
Step Two: Assessing the Environment
Step Three: Plotting Your Plan
Step Four: Selling Your Marketing Plan
Step Five: Describing Your Dream Team
Step Six: Presenting Financials
Chapter 4: Getting the Legals Right
Picking a Business Structure
Matching the Name to the Game
Protecting Your Brand
Registering with the Powers That Be
Working with Contracts
Negotiating Lease Contracts
Chapter 5: Projecting Your Profits
Forecasting Sales for a New Business
Understanding Costs
Forecasting Expenses
Building Profit Projections
Chapter 6: Marketing With Your Heart on Your Sleeve
Laying Down the Elements of Your Plan
Defining Who Your Customers Are
Analysing Your Competitors
Setting Sales Targets
Building Sales Strategies
Expanding Your Reach Offline
Keeping Yourself Honest
Chapter 7: Hiring Your First Employee
Becoming an Employer: The First Steps
Meeting Minimum Pay and Conditions
Playing Safe and Playing Fair
Creating a Positive Workplace
Chapter 8: Tracking Every Dollar
Figuring How Often to Do the Deed
Choosing Software that Fits
Creating Recordkeeping Systems
Keeping Track of How Much You’re Owed
Meeting Bookkeeping Deadlines
Budgeting for Tax
Chapter 9: Ten Tips For Getting Ahead
Focus on What Works
Remember You Need to Eat
Balance Reality against Ambition
Manage Growth Carefully
Play the Percentage Game
Recruit Staff Super Carefully
Deliver on Your Promises
Create a Customer Service Culture
Ask for (and Listen to) Feedback
Plan to Sell, Right from the Start
Index
About the Author
Connect with Dummies
End User License Agreement
List of Tables
Chapter 1
TABLE 1-1 Rating a Business that’s Been Done Before
TABLE 1-2 Rating a Niche Business or New Invention
Chapter 2
TABLE 2-1 Moving from a Small Business to a Big Business
Chapter 3
TABLE 3-1 Industry Analysis — Regional Accounting Firm
TABLE 3-2 Analysing Your Competitors
TABLE 3-3 Identifying Strengths and Weaknesses for Your Business
Chapter 4
TABLE 4-1 Summary of Different Business Structures
Chapter 5
TABLE 5-1 Variable Costs Examples for Service Businesses
TABLE 5-2 Cost of Producing One Bottle of Pickles
Chapter 6
TABLE 6-1 Example Competitor Analysis
TABLE 6-2 Supporting Sales Goals with Strategies
Chapter 7
TABLE 7-1 When You Have to Pay Super (and When You Don’t)
List of Illustrations
Chapter 3
FIGURE 3-1: The principles of a SWOT analysis.
Chapter 4
FIGURE 4-1: Digging around for names in the ASIC business names register.
FIGURE 4-2: Check the Australian Trade Mark Search for relevant trademarks.
Chapter 5
FIGURE 5-1: Building a sales forecast in Excel for a service business.
FIGURE 5-2: Breaking down sales projections into fine detail.
FIGURE 5-3: Forecasting expenses for the months ahead.
FIGURE 5-4: Building a gross profit projection for a service with employees or ...
FIGURE 5-5: Building a gross profit projection for a business selling products,...
FIGURE 5-6: Compiling a monthly profit projection.
Chapter 7
FIGURE 7-1: Your employer checklist.
FIGURE 7-2: Workplace health and safety is an ongoing process.
Guide
Cover
Table of Contents
Title Page
Copyright
Begin Reading
Index
About the Author
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Introduction
I believe that pretty much anyone is capable of running their own business. You don’t need to be a qualified accountant in order to understand your own finances, nor do you need to be a marketing guru in order to sell your wares to unsuspecting victims. Instead, all you need is a bit of cash, a willingness to work hard and lots of straightforward advice. This book provides the straightforward advice bit, along with a pinch of humour every now and again.
Most people have lots of questions when starting out in small business: Are you best to stick with a tried-and-tested model, or instead should you seek to innovate? Should you trade as a sole trader, or incorporate as a company? How do you go about taking on your first employee? What about financial reports, budgets and tax? I try to answer all these questions, and more.
Getting started in your new venture is probably one of the most exciting and creative stages in your life. You get more control over your own life and a chance to create something that really belongs to you. Although small business can be stressful at times, I’ve met few businesspeople who have regretted the decision to leave the security of their day job.
I hope you enjoy this journey and wish you the very best of luck.
About This Book
This book is designed so you can skim through it quickly, find the answer to whatever you want to know, and then set aside the book until next time. You can also pick the book up at any point and just start reading.
However, if you’re new to business and you’re just getting yourself on the road, I suggest you read Chapters 1 to 4 before doing much else. That’s because some of the decisions you make when getting started affect everything else that follows, and if you can get off to a good, clean start, your chances of success are going to be that much higher.
On the other hands, perhaps you want to know about hiring your first employee (Chapter 7) but you’re not the least bit interested in legal structures (Chapter 4). That’s fine — just skip the first six chapters and start off from where you want to be.
Each chapter covers a specific part of running your own business, including business set-up and planning, marketing and people management, money stuff and bookkeeping. I mix advice and explanations with anecdotes about my own experiences in small business, as well as some of the experiences of clients and colleagues.
Foolish Assumptions
When you work with small business, you learn to assume nothing. I see everything from clients who time all strategic decisions to fit with the stars (no kidding!), to multimillion-dollar enterprises that have grown out of nothing in a matter of months. So, in this book I try to assume very little about you.
You don’t need to know anything about bookkeeping, marketing, tax or computers, and I try to explain all concepts in the simplest possible way. I focus on the kinds of things I reckon most small businesses are concerned about, combining positive advice about promoting your business and planning for success with practical guidance about the really tricky stuff — such as becoming an employer or working with GST.
Icons Used in This Book
Want to be streets ahead of the competition? Look for this handy icon.
Get out your calculator and start doing those sums. This icon flags money stuff, highlighting vital information for anyone with an eye for making a dollar or two.
Tie a knot in your hankie, pin an eggtimer to your shirt but, whatever you do, don’t forget …
This icon indicates handy advice or insights into how to improve your business or make life easier.
If you can’t learn from history, you’re doomed to repeat your mistakes. Real-life stories from businesses and people who’ve been there provide all the history lessons you could ever want.
A pitfall for the unwary. Read these warnings carefully (and then you can’t say no-one told you …).
Where to Go from Here
Getting Started in Small Business For Dummies is no classic work of literature (one day, I promise myself!), and so you don’t need to start reading from page one and plough through to the end. Instead, jump in and start reading from whatever section is most relevant to you:
New to business? I suggest you read
Chapters 1
,
2
and
3
before doing much else.
Chapter 1
asks if you’re ready to run your own business,
Chapter 2
looks at how you’re going to stand out from the rest of the pack, and
Chapter 3
covers everything you need to know about creating a business plan.
If you think you’re ready to start,
Chapters 4
and
5
talk about planning for profit, covering everything from picking a business structure, to understanding costs and expenses, and building profit projections.
You don’t get anywhere in business without marketing and people skills so, in
Chapter 6
, I delve into the nitty-gritty of developing your marketing plan, including defining your customers, setting sales targets and strategies, and expanding your reach — online and offline. In
Chapter 7
, I talk about becoming an employer, providing some pointers on knowing your legal obligations and creating a safe — and positive — workplace.
Need help with money?
Chapter 8
helps you track every dollar, looking at bookkeeping and recordkeeping systems, keeping track of — and tracking down — how much you’re owed, and budgeting for tax.
Finally, my favourite part of any Dummies title: The Part of Tens.
Chapter 9
offers ten extra special tips for getting ahead in small business.
Thank you for taking the time to read Getting Started in Small Business For Dummies. I hope you find something along the way that helps you and your business flourish.
Chapter 1
Is Small Business for You?
IN THIS CHAPTER
Working for yourself — the good things that make it all worthwhile
Working for yourself — the bad things that no-one wants to talk about
Making sure the time is right for you, personally and financially (now, where is my crystal ball?)
Figuring out your business strategy
Digging up government advice, free of charge
Having faith in yourself and your ability to succeed
I love small business. For me, small business is about believing in yourself, being passionate about what you do and creating opportunities. Our culture of getting up, getting out and giving it a go fits perfectly with this entrepreneurial existence, explaining why so many Australians are hooked on the self-employed way of life.
Although starting your own business can be daunting at first, the everyday challenges don’t leave you with much time to regret your decision. Besides, being self-employed is a pretty addictive thing: Working your own hours, being responsible for your decisions and raking in handsome profits (here’s hoping) are just some of the attractions of being your own boss.
In this chapter, I talk about what it means to start your own business. I take you on a roller-coaster ride over the highs and lows of small business terrain (for every upside to being out there on your own, a downside exists, too), through to finding your community, taking advantage of government advice and continuing to believe in yourself. After all, the success of any venture depends on belief — in yourself, your business idea and your abilities.
Working for Yourself — A Dream Come True?
If you ask most small business people what they like the best about working for themselves, you’re likely to get a pretty cynical reply — something about the delights of working for peanuts and the thrills of doing bookwork in the wee hours of the night. But dig a little deeper, and most self-employed people warm to the question.
Doing what you love to do
Doing what you’re passionate about has a lot going for it. If you want to play the trumpet day and night, you’re likely to be happiest as a professional musician. If you love hanging off cliffs on the end of a rope, you’re going to dig being a climbing instructor. And if you’ve never quite gotten over your LEGO phase, you probably need to go and build houses.
Happy people love what they do for a living. Besides, being self-employed is often the only way you can get to do just that. (Nine-to-five jobs tend to be rather thin on the ground for trumpet players or climbing instructors!)
Earning pots of money (here’s hoping)
With many trades and professions, your income always has a pre-defined upper limit, no matter how hard you work — teachers, carpenters or nurses on the regular payroll, for example, are limited in the amount of pay they can get. However, by setting up your own business, whether you’re tutoring private students, building house extensions or doing private home nursing, your earning potential immediately increases.
Statistics that compare the taxable income of self-employed individuals with those of employees working in similar industries or professions are hard to come by. However, if you start up a low-risk kind of business — home-tutoring, for example — the financial benefits of becoming self-employed are small but relatively guaranteed. On the other hand, if you start up a high-risk business — say, launching a new invention — you could end up losing everything you have. Or, you could just wind up a millionaire.
Being your own boss
No-one is going to dispute being your own boss is fantastic. And no matter how much you stuff things up, no-one can give you the boot — except perhaps your customers — leaving you with a feeling of security that’s hard to beat. Here are some other reasons being your own boss feels so good:
You get to set your own rules:
Your rules may involve anything from setting enormously high standards, to declaring mufti days seven days a week.
You choose when (and how often) you work:
Of course, choosing when you work often means working 24 hours a day, seven days a week. However, in theory you can pick and choose which hours you work and when you take holidays.
You can follow your own instincts:
You can do what you think is right, as opposed to doing what someone else thinks is right. I know firsthand how frustrating it is to be forced to do stuff the wrong way, or the slow way, just because the person who is giving the orders happens to be your boss.
You can use your conscience:
You can afford to make decisions that may not be the best from an economic point of view, but are good decisions in terms of your own conscience. For example, a business colleague of mine who recently purchased an electric car was acting according to her principles, rather than seeking to save dollars.
You can take risks:
When you’re self-employed, you can take risks that you may not be able to otherwise take. Thousands of successful businesses have been started by former employees who went out on their own because their employers didn’t believe in the viability of their new ideas.
You can provide employment for family members:
Being in a business team with your family, and being able to provide employment when it’s needed, can be one of life’s most satisfying experiences. (Of course, it can also be one of life’s most frustrating experiences, but I’m not going there right now.)
You can realise your dreams:
No business book is complete unless it mentions dreams. Nothing beats putting your heart and soul into what you believe in.
Staying home
I confess that working from home somewhat lost its shine for me during COVID-19 lockdown. However, over the years I’ve really appreciated the flexibility that working from home affords. Generally, I love walking to my ‘office’, ten seconds down the hallway, rather than commuting two hours by train to the city.
According to the Australian Bureau of Statistics (ABS), home-based businesses make up over half of all the small businesses in Australia, reflecting part of an international trend towards more businesses operating from home (a trend presumably partly fuelled by improvements in technology). Home business is the spawning ground from which larger businesses are born, including iconic brands such as Airtasker, Billabong, Canva and Salt Gypsy.
Working for Yourself — Reality Strikes
An acupuncturist once said to me, ‘When you work for yourself, you work for a real bastard. No holiday pay, no sick pay, no bonuses — long hours, filthy pay and no promotion.’ As I lay on the couch, needles sticking out of my ears and my navel, I reflected on my 60-hour weeks and wobbly bank balance. I had to agree with him.
Teetering on the edge
As the years have passed by, I’ve developed a sniffer-dog instinct for which businesses are likely to succeed, which are going to struggle and which are doomed to fail. Although I usually wish I wasn’t so chillingly accurate (especially when I predict failure), occasionally life delivers a surprise — the success of an overpriced French restaurant with a mad chef, for example, or the survival of a bed and breakfast in the back of beyond.
Running a business is an inherently risky game. Sometimes, this risk makes things exciting and, other times, just plain old scary. Of course, business success is a fantastic feeling but, on the other hand, failure can be quite catastrophic. You can lose your house, your job, even your family, all in the one hit, not to mention the disillusionment of having precious dreams crushed by harsh reality.
How well you cope with risk depends on your age, personality and health. Certainly, investing your life’s savings in a new venture is infinitely scarier when you’re 60 than when you’re 30. I recommend you always minimise risk by keeping a tight control on your finances, a topic I explore in detail in Chapters 5 and 8.
Working night and day for little pay
Unfortunately (or maybe fortunately), the brilliant business ideas that earn $10 million in the first year are very few and far between. For many people, the only sure-fire way to succeed is to work loooong hours in the first year or so, taking on the roles of bookkeeper, marketing consultant, salesperson and managing director all in one.
These long hours do tend to settle down as your business becomes established, however, and the ABS reports that the average self-employed owner-operator works 42 hours per week. And, at the other end of the spectrum, many people choose to only work part-time in their business, content to choose lifestyle and flexibility over income.
One of the hardest things about being self-employed is staying motivated. Not just in the first year, where everything is interesting and different, but also year after year after year. Of course, as your business grows, you can hopefully employ staff to help. (Chapter 7 talks more about becoming an employer and building an effective team.) Ideally, you can arrive at a point where your business earns money, even if you’re not working in it every day of the week.
ASSESSING YOUR CHANCES OF SURVIVAL
Australians are a pretty entrepreneurial bunch. With a population of 25 million (give or take a few), almost 2.4 million businesses are alive and kicking. Impressive, don’t you reckon? Almost 10 per cent of the population run their own business.
But what about business survival? Are all these businesses fly-by-nighters, starting up one year and disappearing the next? Not so long ago, a business coaching franchise advised a client of mine that 80 per cent of businesses go bust in the first year, and only 8 per cent of businesses survive five years or more.
Pish tosh. Business is tough, but it’s not a suicidal mission. The ABS reports that half of new businesses without employees, and 30 to 40 per cent of new businesses with employees, cease trading within the first three years. However, these figures don’t shed light on how many businesses chose to cease trading (as opposed to going broke or ‘failing’), and how many businesses actually experienced financial loss upon closing their business. In my experience, very few business people rate their overall experience as a negative one.
Weathering feast and famine
Sometimes, the highs and lows of small business profits make even the government railway services look reliable. A bumper year, and the bank account is rosy. Then you lose a client or two, interest rates go up and, before you know it, you’re wondering how to pay the rent.
In Chapter 5, I talk about creating financials for your first year of operations. I differentiate between financial projections, where you model your likely profits and possible business scenarios, and budgets, where you set targets for sales and limits for expenses. Developing the skills to create meaningful financial projections and budgets is crucial to your business success.
I used to find the feast and famine of running my own business very stressful, but I’m getting better at managing this dichotomy as time goes by, even managing to put money aside when things go well. How you cope with the effect of this insecurity depends not only on your personality, but on your family commitments as well.
Factoring Yourself Into the Whole Deal
Weighing up the good and the bad about being self-employed is tricky enough, but you also need to consider whether you’re ready, personally and financially.
Ask yourself these three questions:
Do you have experience in the kind of business you’re planning to start? For example, if you’re looking at buying a coffee van, have you actually spent a few weeks or months selling coffee in this way? Do you have barista or retail experience? Business is competitive enough without trying to do something that you have little or no experience in.
Do you definitely have enough capital to get started? If you’re not sure, do you think you may be better saving for a while before you launch your business?
Is your partner/spouse supportive? (I remember my (now ex-) husband wanting to start up in business when our first child was just six months old. He was ready to start a new business, but I certainly wasn’t.)
If your answer to any of these questions is ‘no’, I suggest that you try to temper your enthusiasm just a little. And if you still can’t wait, then hey, I completely understand.
I recall a client of mine, a highly experienced business manager, who — contrary to my advice — purchased two hairdressing salons as an investment. Despite relatively sound business practices, both salons floundered, simply because my client didn’t have any experience in the hairdressing industry. Among other problems, he lacked an understanding of his customers’ values, the expectations of his staff, and the importance of hygiene and appearances.
My point? If you’ve been a musician all your life, you’re going to be much better starting a music school than opening a florist shop. If you’ve always worked as a landscape gardener, you’re probably ill advised to open a bookshop.
GO BACK TO SCHOOL
Just as you wouldn’t expect to drive a car without ever having lessons, don’t expect to plunge into a new business venture without any practice or instruction. Instead, check out what courses are available.
Probably the most practical approach is your local TAFE. Although the courses on offer vary from campus to campus, look for a particular small business course that focuses on getting a business started, and which includes formulating your very first business plan.
Similarly, you may find something relevant through your local community college, but be aware that the quality of these courses varies. (Community colleges don’t always stick to curriculums in the same way as TAFEs do, so the quality of their courses depends on the individual tutors, and whether the course is working towards a particular certification, or not.)
If business management is what turns you on (and this doesn’t necessarily mean working for yourself), an undergraduate course at university may be your best bet. For example, I completed a joint major in Accounting and Business Management, and the subjects provided a great all-round understanding for all kinds of things.
If you have a university degree under your belt in a different area, a Master of Business Administration (MBA) is another option. But, be aware — while an MBA is an impressive achievement, it isn’t a hugely practical option if you’re thinking of running a small one-person enterprise, because the overall emphasis of such courses is on larger enterprises and organisations, rather than on small business.
Staying Safe or Inventing the Wheel?
Businesses fall into three broad categories. The first type of business is one that has been done before, and therefore has been tried and tested. The second type of business is one that finds its own niche, thereby doing something especially tailored to a small group of customers. The third type of business is one that launches an entirely new concept on the world.
Playing it safe
Probably the safest and most reliable approach is to go for a traditional kind of business; one that lots of people have tried and succeeded in before you. Most retail shops and many service businesses fall into this category — for example, bookshops, florists or hairdressers, builders, electricians or plumbers.
One good thing about going into the kind of business that many others have done before you is that you can find out what to expect in terms of sales, profit margins, expenses and more. (Indeed, if you choose to go with a traditional kind of business, you may prefer to purchase an existing business, rather than starting from scratch.)
With a traditional kind of business, success depends not so much on the strength of your original idea, but more on good business sense and your ongoing capacity to differentiate yourself from your competitors. If possible, this difference should capitalise on your skills and resources, so that this difference is hard for competitors to imitate.
If you’re wondering whether you’re on the right track with a traditional business, rate yourself using the questions in Table 1-1. For each question, a score of 1 is bad, and a score of 10 is good. (You probably want to get a total score of 35 or more, although don’t be dismayed if you score less than this.)
Do bear in mind that changes in technology are shaking up even the most traditional kinds of businesses. For example, bookshops used to offer solid business profits, so long as you selected a good location and you knew your trade. However, the changes brought about by ebooks and online distribution mean that, nowadays, opening a bookshop is a very different proposition indeed. Similarly, a bookkeeping business may have been a safe bet in the past, but cloud technology and new accounting software solutions are rendering many bookkeeping services obsolete.
TABLE 1-1 Rating a Business that’s Been Done Before
Give yourself a score from 1 to 10 on each of the questions below
Can you think of something that will make your product or your service different from your competitors?
Can you do something that will allow you to deliver a better product or service than your competitors?
Are you going to be cheaper than your competitors?
Do you love the day-to-day activity that this business demands?
Do you know for sure that demand exists for your product or service?
Do you (or someone in your team) have strong marketing skills?
Are you well known locally, with a strong community network?
