How to start a small business

There are few things more exciting than starting your own small business.

You’re confident you’ve got a great idea, product or service that people will want or need, and you want to give it the best possible chance of being successful.

So how do you start a small business in a way that will give it the winning start it needs?

There are some important steps you can considering following to start things off on the right foot.

1. Do your research

2. Determine if you’re ready

3. Write a business plan

4. Decide on a business structure

5. Get good help

6. Nail your marketing

Doing your research on your small business’s viability is a vital first step. Picture: Getty Images.

1. Do your research

One of the most important (and often overlooked) steps in starting a small business is to conduct good research into the market for your product or service.

Are there enough people in your target area who want or need what you’re selling? How much competition is there?

Do you have a point of difference that will attract people to your business over others?

Chances are you’re already sold on your own idea, so try to leave your bias at the door and assess your business idea rationally, and with an open mind.

If the weaknesses of your idea begin to outweigh the positives, you might need to change tack, or walk away altogether.

Remember, the vast majority (around 96%) of Australian businesses are small businesses, which means they have an annual turnover of less than $2 million. But the majority of small businesses also fail within the first couple of years.

Do your research and you’ll decrease your chances of becoming one of those statistics.

Make sure you crunch the numbers on your business’s viability. Picture: Getty Images.

2. Determine if you’re ready

Are you ready to take the leap and actually launch a small business?

Starting a small business is a huge undertaking and will often involve a major financial commitment, so it’s important to ensure you’ve got enough pillars in place to put yourself in a position to succeed.

Firstly, crunch your numbers and answer the following questions:

• What will starting the business will cost you in terms of rent, equipment purchases, staff and inventory.
• Do you have the money to cover these costs, or will you need a loan?
• What are your ongoing costs? How much money will the business need to make weekly/monthly in order to cover these expenses, as well as loan repayments, and also let you pocket enough to feed your family?

Then look at the skills required to actually run the business.

Do you have the know-how in enough areas to make your business successful? Do you know how to market it and manage the finances? If not, you might consider taking courses or seeking advice to up-skill yourself before moving forward.

Writing a business plan should be one of the first steps for starting any small business. Picture: Getty Images.

3. Write a business plan

No, it’s not the sexiest task, but writing a business plan is one of the most important steps you’ll take on your journey to small business success.

Any successful businessperson or business coach worth their salt will almost always advise you to put together a business plan, which is essentially a roadmap for the coming weeks, months and years of your business’s life.

It should include your short, medium and long-term goals for your business, as well as the incremental steps and actions that you’re going to put in place to ensure you achieve them.

At the very least, your plan should list your predicted cashflow, your expected costs, your growth predictions and a detailed marketing plan for how you’re going to put yourself front and centre in customers’ minds in the first 12 months.

It’s not a static document, either. If you meet certain goals earlier than expected, or have fallen behind where you’d hoped you’d be, adjust your business plan accordingly so that you’ve always got achievable targets.

4. Decide on a business structure

In Australia, different business structures have different requirements and tax implications.

Are you going to be a sole trader, a company, a partnership or a trust?

There are advantages and disadvantages to each, so speak to a business adviser or your accountant about which structure will best suit your business.

Having the right people around you is critical for the success of a small business. Picture: Getty Images.

5. Get good help

Don’t make the mistake of thinking you’ll be able to do everything yourself.

Do you have good people around you that can help you navigate the perks and pitfalls of small business, particularly in those early stages?

Consider whether a business adviser, a business coach and an accountant are worth engaging as you prepare your business case for launch.

While you’ve no doubt got great knowledge of your product and service, would things like marketing and social media be better left in the hands of someone else who’s trained to get results in that area?

It’s crucial to get the right marketing plan in place for your small business. Picture: Getty Images.

6. Nail your marketing

There’s no point having a fantastic product or service if no one knows about it, or knows how to find you.
All of your hard work and preparation can be quickly washed away with a poorly thought out (or lack of a) marketing plan.

You should already know your target demographics, so ensure you’re marketing and advertising in the most appropriate places to reach them.

Will your website generate enough traffic on its own? Should you advertise in print or online? Is your offering suited to social media posts?

Execute those initial months with a solid marketing plan, and you won’t be left wondering why there are no customers beating down your door.