THE FIRST 5 FUNDAMENTALS FOR STARTING A BUSINESS THE RIGHT WAY
Starting a business can be a daunting task. Armed with only your passion and idea, the climb to commercial establishment can feel overwhelming and uncertain.
And although we live in a fortunate time when resources for starting and growing a business are plenty, for the emerging or inexperienced business owner it can be tough to know where to actually start; particularly in a way that will set your business up to survive long-term.
So, here are five fundamentals to get your business started the right way:
1. Write the operations basics of your business plan
Ultimately, your business plan should be comprehensive, similar to the templates for business plans you’ll find on most government websites (like this one, for Queenslanders: https://publications.qld.gov.au/dataset/business-plan-template). Having a business plan is one way to significantly increase your business’s chances to survive (and thrive) long-term. It’s also helpful if you decide to seek finance from an investor or a bank.
If the detailed version seems too much right now, then figuring out your operational basics is the perfect first step.
Ask yourself these questions, and write down the answers:
What will my business be called?
What will it do/what problem will it solve?
What products/services will it provide?
Where will it be based?
Here’s a hypothetical example for a florist:
Provide people with fresh, high-quality flowers sourced only from local markets, to celebrate special occasions.
Bouquets for brides, Valentine’s Day couples, and local commercial businesses.
Once you’ve done that, check out the (free) full template provided by the Queensland government.
The BDO website also has a great, simple run-through of the purpose of a business plan: https://www.bdo.com.au/en-au/insights/advisory/articles/how-to-create-a-successful-business-development-plan
2. Do a SWOT analysis
After sorting out your operations it’s a good idea to do a SWOT analysis. It doesn’t take being a business executive to do, and much of the research you’ll need is a quick Google search away.
SWOT stands for:
Strengths (what resources do I already have available, and what skills am I good at?)
Weaknesses (what don’t I have, and what am I not great at?)
Opportunities (new markets or segments to enter, areas for innovation)
Threats (what is the barrier entry to this industry? Is the market saturated? How many other competitors do I have?)
Continuing with our Florist example from before, it could look like this:
The owner of Floral Delight is a fantastic people-person, so she already has a great network of peers and a handle on marketing.
One thing she doesn’t have, however, is ample capital – her business’s finance isn’t organized yet.
No other florists near Floral Delight offer free, same-day delivery – this is something she wants to take advantage of.
There is a relatively low barrier to entry into floristry, and the market is saturated with businesses who have a franchise structure.
3. Decide on your target segment and target customer
In your business, the most important person is your customer. After all, a business can’t survive without people purchasing its products or services. Some business owners have the tendency to focus so much on their business, that in their advertising and other business communication, that’s all they talk about – how great their products and services are.
When we communicate with potential customers, we are entering into their story, so we need to make our products/services about them. If we can shift the way we think and speak about our business so that it puts the customer at the centre - by focusing on how we can solve their problem - we’ll have a better chance of engaging the people we most want to serve and helping them.
For fantastic resources on marketing (specifically, serving your target customer), I highly recommend the guys at Owner Media – they have years of experience, are incredibly down to earth, and they have various resources at different price points: https://owner.media/
4. See your accountant
In my very biased opinion, accountants are the world’s oldest - and therefore, one might say most experienced - business advisors. Luca Pacioli, who published the first known record of accounting in the 15th century, said ‘a person should not go to sleep at night until their debits equal their credits’. This wasn’t restricted to just accountants, but to anyone in charge of finances – that means business owners, too.
There is a great deal of knowledge your accountant has when it comes to your business; they can review your business plan, draw up a chart of accounts for you, help you with pricing, strategy, tax, and a whole host of other things. Depending on their speciality they may even be able to help you with the day-to-day bookkeeping and cost management, too.
Don’t be afraid to ask questions – the more you know, the more you’ll understand how your business works, and over time you’ll be able to spot and correct more of the financial problems yourself.
5. Organise finance
One of the most common hang-ups for businesses – and a reason many fail – is underestimating how much capital is needed; this is a fatal flaw.
The saying goes: revenue is vanity, profit is sanity, and cash flow is king. Cashflow is to a business like blood is to humans – a healthy circulation will keep your business pumping (operating), and more likely to return a profit at the end of the financial year.
If you don’t have a plan for your finances, make that a priority component of your business plan. When you see your accountant, have them review your business plan, and get their feedback on what kinds of finance might be appropriate for you, and/or whether entering the market is advisable right now.
Starting a business can be scary, but it can be incredibly rewarding to achieve your goals when the hard work is put in consistently. Applying these five steps - at any point in your business journey - will give you a strong start and greater chance of lasting the long haul. With the right expertise and a clear strategy moving forward, achieving your goals will make it all worthwhile.
- Courtney Deagon
Courtney works as a Trainee Accountant at a small firm in Brisbane, and is studying an undergraduate degree in accounting. She’s married, has two children, and 6 chickens who are the main reason she ever goes outdoors. She has a passion for helping sole traders and small business owners understand the ‘business side of business’.