8 Steps to Starting a Successful Small Business

This document has been compiled to guide new small business owners through the start – up phase – a phase where being clear about what needs doing can make a huge difference.

Two points need to be made about what follows:

  • it may take time to work your way through this. Take the time necessary. The best approach might be to determine the your highest priorities and deal with those first.
  • this document is not alternative to professional advice and guidance. The uniqueness of every individual business means that there is no set, well defined path covering all possibilities.
  • Step 1. Are the Regulators Happy – Registrations, Licences, & Approvals.

    Your business depends on regulators (like the ATO for example). If you don’t have their approval you either cannot operate or you risk facing their wrath. It really is best to comply with their needs – and it is not that difficult.

    Firstly, check the registration, licences, and permits that you may need to run and maintain your business. These will vary according to a number of factors – size, type of business, turnover, location.

    (Note: The very first step in setting up a business is deciding on the legal structure – Sole Trader, Partnership, or Company. Once that has been determined you need a Tax File Number (TFN) for the business entity – then you are ready for ABN Registration.)

    Check whether your business entity needs to register for:

    • Tax File Number (TFN)
    • Australian Business Number (ABN)
    • Goods & Services Tax (GST)
    • PAYG withholding

    Also determine your obligations in relation to:

    • Business Licences
    • Local licences and permits.

    Determine whether you need:

    • Business Name Registration
    • Trademark Registration

    Step 2. Facing each day on a good night’s sleep – Financial Planning& Management.

    Trying to run a business without a financial plan and management system is a recipe for stress and sleeplessness. Akin to a car running on empty. On the other hand, if you set the right systems up from the very beginning it is a great start to building a successful small business.

    Some things that should be considered now are:

    • a dedicated small business banking account
    • preparing estimates for your income and expenses for the next 12 months
    • understanding your obligations to employees, tax office, when those obligations fall due and planning for fulfilling them.
    • determining whether your business is eligible for grants or support from the government.
    • do you need to raise capital to support your small business in its early days.

    Step 3. Fishing for growth – prepare a marketing plan.

    Many people put more effort into planning a fishing trip than they do planning growth for their small business. Marketing is all about growing your small business – making sure the right people know about you and want to deal with you. (Fishermen make sure they fish where the fish are and have the right bait and tackle – not so different really!)

    Elements of the marketing plan may also have an influence on decisions you make about your business name, web domain name, and trademarking.

    Key steps in your marketing plan are:

    • identifying the characteristics of the people most likely to need your small business
    • working out what will differentiate your – business from your competitors
    • how you will communicate this difference in a way that will have an impact on the people with the highest potential to buy from you.
    • what elements will help people identify you – your name, a logo, a tag line.
      • if you have unique identifying names, marks or other assets you need to seriously consider trademarking them
    • develop a brand position – the values and aspirations of your business.
    • go about generating leads for your small business in a conscious way – set up systems for generating and capturing the details of potential customers.
      Do not leave this to chance.
    • set up systems for converting potential customers into paying customers.
    • set up systems for regularly measuring the success of your lead generation systems and you sales conversion systems.

    Step 4. Flexibility is great, chaos is crazy – prepare a business plan.

    Knowing your starting point and desired finishing point are 2 essentials for any trip.

    And so for your business, the bookends of your small business plan are what it is now and what you want it to be. Planning whats happens in between fills out the plan. The marketing and financial plan form parts of the business plan.

    Successful small businesses tend to build a comprehensive view of themselves and their future. In a changing world this naturally needs to also contain room for flexibility.

    Some of the elements contained in a small business plan:

    • business description
    • analysis of your industry and your main competitors
    • lists of the external factors that may be opportunities or threats
    • lists of your internal strengths and weaknesses
    • a description of how you want your business to look in the future (your vision)
    • documentation of how will achieve your vision and what you need to do.(your mission, goals, strategies, action steps.)

    Step 5. The law of entropy and – Business Systems.

    You know that, left to its own devices, everything reverts to chaos – that is entropy. Businesses can’t afford to continually recover from chaos. That is why it is so important to start with solid business systems and commit yourself to maintaining – even improving them.

    For some business functions systems are vital to either efficiency, effectiveness, legal compliance, or all 3.

    Some of the systems that should be considered are:

    • bookkeeping system. Well kept financial records are vital.
    • systems for invoicing customers (tax invoices) and receiving payment
    • systems for paying suppliers and other creditors
    • filing of legal documents – your licences, registrations, etc
    • maintenance of customer records.
    • maintenance of employee records

    Step 6. Don’t gamble on these, the odds are not in your favour – Risk Management/Insurances.

    Sometimes it might feel like it but running a small business is not the same as sitting at the poker table. Failing to manage the risks at the poker table can result in financial loss.

    Failing to manage risks that face your small business, or to adequately insure for those risks, can result in serious problems for your business and you personally. This is a complex area and seeking professional advice is advisable.

    Some of the areas of risk are:

    • workplace health & safety (OH&S)
    • environmental impact
    • community impacts
    • computer security, maintenance, and back – up.

    Some insurances you may need are:

    • workers compensation insurance
    • public liability
    • professional indemnity
    • assets & revenue
    • accident & illness

    Step 7. Employer Obligations.

    If you are employing people in your business you have obligations that must be met. Failure to meet them can have serious repercussions. Some areas of employment containing obligations that may effect you are:

    • recruitment & hiring
    • taxation
    • superannuation
    • equal employment opportunities & discrimination
    • OH&S & workers’ compensation

    Handling complaints & disputes

    Step 8. Other Important Stuff.

    One of the most important things to do is to understand where you can get more information and advice about starting then growing your business. Help and advice can take many forms and come from many sources.

    Some of those sources are online:

    Some sources of advice, mentoring, & help are best through paid professionals:

    • solicitor
    • accountant
    • tax agent
    • bank manager
    • insurance broker

    What Next – Free Small Business Success Consultation.

    Starting or Running a small business is not easy, which is exactly why we created the Small Business Authority Powered by Distil

    – to help help make small business life simpler through providing a One Stop Shop service which can help you with all the above areas.

    But often small business owners just need a little advice or somebody to act as a sounding board. Thats why we offer a 20 minute free Small Business Success Consultation.

    Rest assured that these are not sales focused consultations. They are run by staff who have previously operated their own successful small business and who will listen to your situation, answer any questions you have and give you their best input into your small business.

    However, please note that the Consultations are limited to a maximum of 20 minutes.

    To book a free Small Business Success Consultation, contact us.