You can’t prepare yourself for every aspect of running your own business, but here are some key questions to ask yourself before taking the plunge.
1. Why do you want to start this business?
This is the big first question to ask. Do you want to build a business in support of a product or invention? Do you want to organize, solidify, and expand existing freelance or consulting work you’ve been doing? Do you love what you do, but hate the company you’re been doing it for? Do you want to branch out on your own? There are a million possible answers, and likely more than one will be true for you. Not to say that any motivation is inherently better than others, but knowing what motivates your desire to start a new small business will determine a lot in terms of how you move forward.
2. What resources do you need?
The most important element in starting a business is funding. Even the most basic home business incurs a multitude of startup costs, including registering a business name, obtaining a business telephone line and printing business cards. Physical resources such as your workspace, information systems and marketing materials also need to be considered. Do you need human resources for your business to operate or are you planning on being a sole trader?
3. What’s different about your business?
Is your business idea similar to other businesses already out there, or do you have something unique to offer? How crowded is your target marketplace? These are important questions to think about, but bear in mind that the key to success doesn’t always hinge off finding a completely empty field (and good luck finding one!). Rather, it depends on how you define your company and its place in the market. You don’t always have to forge a new trail, but you have to give customers a compelling reason to choose you over the competition.
4. What is your business structure?
The structure you choose will depend on the size and type of business, along with your personal circumstances and how much you want to grow the business. The key is to ensure that whatever structure you choose is in place before you start the business and that you’re able to comply with the various legal requirements it carries. The four most widely used structures in Australia include: sole trader, partnership, company, trust and not-for-profit.
5. Are you an inventor or entrepreneur?
A lot of successful startups are hatched from an amazing idea. However, a great product idea or invention isn’t necessarily enough to make a great business. Too many times, an “inventor” type stays focused on the product, the prototype, the patent, etc., ignoring the other aspects of developing a business. Just because you develop a great product doesn’t mean that customers will instantly flock to your door. Of course, if you consider yourself more of an inventor than an entrepreneur, this doesn’t necessarily preclude you from starting your own business. But perhaps you should look for a partner with complementary entrepreneurial skills and interests to help take your idea to the next level.
Asking yourself the tough questions ahead of time could mean the difference between success and failure. Seeking professional guidance and undertaking detailed market research is also essential in ensuring that you are making an informed decision in setting up your own business.
For further information about starting your own business contact an ETC Business Consultant on 1800 007 400.
Sign up for our newsletter to stay informed about the latest tips, trends and business insights from ETC.