Are you thinking of starting your own business?
December is always an interesting time.
People and business are tending to wind down, end of year celebrations have begun, the holiday mood is slowly sinking and we’re thinking about how we’re going to spend the next few weeks unwinding.
Equally interesting though are the number of people who are seriously thinking about going into business for themselves.
After another year of working long hours, rushing to meet deadlines and being told what to do, increasingly people start to think – ‘do I really want to spend another year or for that matter, the rest of my life doing the same thing?’
And it seems those in the corporate world are the biggest demographic looking to get off the treadmill and try something on their own.
After all, the thought of being your own boss, doing what you love and setting your own work hours is very appealing indeed.
However, the truth, as any small-medium business owner will tell you is that it’s far from the dream everyone thinks it is.
Starting a business is not simply a matter of following a checklist – there’s a lot more to it – many have said it’s on par with getting married – a commitment that you have to follow through on and work on in order for it to be successful.
Don’t get me wrong, having your own business can be your road to wealth and success and yes, you do have much more control over what happens compared to working for someone else.
But, more than 60% of businesses fail within the first 3 years – in this time, they are confronted with countless challenges and obstacles that they were simply not prepared for.
Key reasons for small business failure
A 2012 ASIC report into business failure showed the key reasons for business failure were;
Poor strategic management
Poor & incorrect financial management (trading losses and insufficient cash-flow)
You may be reading this and thinking – why is strategic management number one?
After all, isn’t ‘strategy stuff’ meant for big business only?
NO! It all starts with having the right strategies in place from the start along with actions and initiatives that can be implemented and measured.
A good idea on its own will not cut it – as they say, ‘the road to hell is paved with good ideas’.
What you need to consider before starting your business
When people start a business, their checklist is mostly confined to;
Registering a business name
Working out whether to start as a company or sole trader
Registering a domain name (e.g. www.example.com.au)
Setting up a website
From here, the theory is that customers will find you and buy from you.
While this is an oversimplification, it’s the general trend.
When it comes to the actual process of setting up the business, there are countless checklists as to what you need and how to go about doing it e.g. links to ASIC, ATO, Small Business Council etc.
However, if you plan on surviving the first year, let alone three years, then you must spend time on 3 critical areas.
The 3 things you need to be clear on before starting your business
The Big WHY – (why are you doing this?)
You need to be super clear as to why you want to start your business.
Simply stating that you want a lifestyle or make more money or to be your own boss may not be enough.
When things get tough, as they invariably do, your powerful WHY will be the motivator to keep you going, to get you out of bed with excitement and it will be your beacon to follow.
For example, your WHY might be; to live a life of security, comfort and freedom – where you are in control.
Marketing – (lead generation)
How are people going to find you – how will people know you exist and why should people choose your product/service over all the other competitors.
To be frank, very few if any business can claim to be unique – they will always have competitors.
Just look at how many players there are in the world of social media!
Marketing is not just about brochures and advertising.
Marketing is about;
Clearly defining who your target client is
Knowing their pain points and what gets them excited
Understanding what vale, over and above your product/service, you offer
When you are totally clear on these points, you can then start to develop your ‘pitch’ that speaks to the people who need you.
In the early stages of growing your business, the tendency will be to go after ‘everything and everyone’ – after all, a sale is a sale – however, the discipline and focus of going after your ideal customer (rather than anyone) has far more benefits than just the sale.
The alignment of values and expectations between you and your customer will be key to your long-term success and happiness.
So, learn to say NO when needed.
Sales (will you have paying customers?)
Like it or not – you will have to sell yourself first – before you sell your product/service.
People buy from people – remember, you are competing with hundreds/thousands of competitors in the same field as you – the difference will come down to how well your customer relates to you.
Once you’ve started the business and you now have paying customers, you’ll need to have actions in place to keep the business on track – a set of financial strategies to keep the business pointed in the right direction.
Finally, an area that really suffers when starting a business is your personal health – in the end, your business success will be reflection of your own health.
Aperture Accounting, 1300 273 788