Last updated: September 27th, 2024
Blueprints for guaranteed business success don’t exist. But you can increase your chances of success, grow your business faster and spend less time bogged in Australian bureaucracy by following a good checklist to starting a business.
Below I’ll give you a rock-solid business checklist and tell you why you should avoid so-called expert advice like “write a business plan”.
I’m not a business expert. But I am a regular guy, currently involved in 3 businesses that employ over 25 people in Australia and overseas.
In the trenches for almost 15 years, I’ve:
- Made every single business mistake possible.
- Tore my hair out at times.
- Travelled the world while working.
- Made a very nice living along the way.
- Enjoyed the freedom of not having to sit in a dreary office.
- Haven’t had to answer to a boss I didn’t respect.
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1. Ensure You Have The Right Personality.
There were 2,569,900 Australians involved in running a business as of 2022, but not everyone is cut out for this life.
I can usually predict whether a person will succeed at starting a business within 10 minutes of meeting them. The traits I look for are:
- High tolerance for risk and pressure.
- Insatiable curiosity. Capacity for learning and adapting to the rapidly changing world.
- Grit. Capacity to achieve goals through perseverance, risk-taking and discomfort. Some refer to it as a “growth mindset”.
- Salesmanship or deep technical expertise. Preferably underpinned by a strong interest in that area.
- Courage. Captured by the saying, “I’m afraid, but I’ll do it anyway”.
- Competitiveness. Thirst for success. Neural pathways developed around setting and achieving goals.
- Focus on the upside. Some people like to ask, “how can I make it big?” while others say, “how can I lose small?”
- Long horizons. Ability to delay gratification and think in 5, 10, 15-year spans instead of craving overnight success, early retirement or “passive income”.
Rethink your decision to start a business if most of the traits above are your inherent strengths, or strengths you’ve worked on developing.
Expert Tip.
Don’t meet all of the prerequisites? Find a co-founder who possesses traits that you don’t, but never agree to a 50/50 power split. Choose a CEO based on the criteria above and agree that this person will have ultimate control of the business.
2. Ensure You Have The Right Expectations.
The beginning of the business journey is hard, dry and unrewarding, yet studies show that most people expect something different.
Business success is not possible without sacrifice.
The precise amount of sacrifice you’ll need to make will depend on your goals (see the next section), but as a rule of thumb, forget about starting a business if you:
- Crave more work-life balance. You will start with very little leverage and very high levels of inefficiency, which means your business will demand almost all of your attention in its first few years.
- See your business as a vehicle for pursuing passions. Pursuing your natural curiosities is important, but remember that starting a business requires doing a lot of stuff you’re probably not passionate about (e.g., hiring, firing, balancing books, talking to lawyers and accountants, etc).
You’ll enjoy work-life balance and the opportunity to indulge your passions only if you grow your business to a stage called the Lifestyle Boutique (see below).
Until then, expect to grind.
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3. Decide On Your Endgame.
The journey of starting a business is more predictable than you think.
Shown above: the Entrepreneur Journey is created by the co-founder of Dent Global, Daniel Priestley. It’s the best roadmap for business success I’ve ever come across.
Daniel Priestley’s excellent business planning roadmap points out the ONLY two stages where business is both fun and profitable:
- Lifestyle Boutique (3-12 people, high revenue per person).
- Performance (40-120 people, high revenue per person).
Expert Tip.
Do you have to grow your business to Performance? Absolutely not. But you must get to the Lifestyle Boutique stage as quickly as possible. You can hold your business in that stage forever, enjoying high profits and levels of freedom. All 3 of my businesses are Lifestyle Boutiques.
4. Articulate Your Point Of Difference.
What makes your business unique?
Also known as a unique value proposition, the answer to this question gives your business a competitive advantage.
Unless you answer it well, you’ll start a business that sells an everyday commodity, forcing you to compete on the worst possible differentiating factors:
- Lowest price.
- Best service.
- Generic “best” product (e.g., best pizza in Australia).
Why are they bad? Because anyone can claim them – and almost anyone can replicate them.
Here are some examples of good differentiating factors:
(Related: How To Pay Overseas Contractors From Australia).
5. Write A Business Plan (Quickly).
Business plans are mostly a waste of time.
As a great 21st-century philosopher, Mike Tyson once said,
Your business will punch you in the face within the first week, and your business plan will go out the window.
Important!
Don’t listen to so-called business experts who insist that you spend days creating an elaborate, formatted business plan, presented in a fancy folder.
What you need is a set of structured notes that:
- Describes the product or services in detail.
- Outlines daily business operations, including location, staffing and manufacturing details.
- Defines the leadership team, including their roles and responsibilities.
- Presents your marketing and sales strategies.
- Articulates your goal within the first year of launching (including short-term goals) plus your 3-5 year goals.
6. Determine The Legalities.
Let’s get the bureaucratic stuff out of the way and set up solid regulatory foundations.
A. Organise Licenses.
In Australia, some registrations and permits are all legally required.
First, you must register for an Australian Business Number (ABN). This:
- Confirms the business identity.
- Allows you to skip pay-as-you-go taxes on payments that you might receive.
- Ensures you can claim Goods And Services Tax (GST) credits and energy grant credits.
- Speaking of GST, register for it once you cross $75,000 in turnover.
- Qualifies you to receive an Australian web domain.
What Else?
Ensure you also consider Trademarking, obtaining business insurance, public liability insurance, payroll insurance, Work Cover, and setting up a payment processor.
B. Define Your Business Structure.
You must decide if the business will be a sole trader, partnership, company, or trust.
Each of the following business structures has its own set of pros, cons, rules and regulations:
- A sole trader owns and runs a business alone but can hire workers to assist them.
- A partnership is a business run by 2-20 people with a general or limited agreement outlining each partner’s responsibilities and financials.
- A company is a separate entity from its owners. A company must be registered if owned by shareholders but run by directors.
- A trust comprises members that may or may not profit from the business. All decisions are in the best interest of the members.
Expert Tip.
If you operate a partnership, company or trust, you’ll also need to obtain a separate tax file number (TFN).
C. Who Is On Your Team?
Depending on the business model you opt for, it may be necessary to define roles and responsibilities within the business.
- A partnership requires assigning rights, responsibilities, and financial requirement outcomes for each partner.
- Trusts require that a trustee be appointed.
- Companies hire a team to run operations, such as general management, mid-level managers, and clerical or operational employees.
No matter what business model you choose, each employee is essential to the success of your business, so hire well.
7. Get Your Finances In Order.
One of the most crucial preparatory steps when starting a business is to organise your personal finances.
We recommend:
- Budgeting your weekly/monthly spending.
- Organise a plan to cover the cost of day-to-day living without working full-time.
- Set up separate accounts to ensure your bills and expenses are in the correct streams.
- Consider a small loan to support yourself in the start-up phase.
- Get an accounting system or software to help organise your income and expenses.
Expert Tip.
Engage an accountant or financial planner to outline the exact steps needed for your particular business. Come prepared, as these can be up to $400 per hour.
8. Organise Your Business Finances.
Cash is king, and systems that enable cash flow are queen.
A. Organise Accounting Software.
Keeping your business and personal financial affairs completely separate is essential for bookkeeping. You must do this before approaching any financial backing.
You should consider the following:
- Xero for invoice processing.
- Square as your point-of-sale software.
Expert Tip.
Even the most minor home-based enterprise requires a business banking account. Approach a few different banks to find the best one for you.
B. Approach Investors.
If you decide to grow your business your business using external funding:
- Solidify your business plan.
- Outline business expenses, equipment purchases, expansion, or the purchase of property.
- Approach angel investors with solid, researched financial forecasts.
- Contact aligned individuals you know personally to invest.
Important!
Investors and banks may require your income and tax information, and possibly that of business partners, for up to seven years prior when applying for loans.
8. Undertake Market Research.
You would have done some market research while choosing your point of difference.
It’s time to go deeper and determine how competitors offer similar products. To do this:
- Find out who the current competitors in your niche are.
- Select five to ten competitors to study.
- Reflect on product offerings, pricing strategies, and marketing techniques.
- Create a spreadsheet that you can use to analyse the strengths of different businesses.
Important.
Expect the journey to be particularly difficult if you have a corporate management background.
Your corporate overlord has paid you a nice salary to sell out on your dreams, and you’ve gotten used to the lifestyle. Downsizing is hard.
9. Build Your Digital And Social Media Assets.
Your business won’t get noticed without a website and social media presence.
A. Create A Business Website.
Your business needs to rank high on Google to retain customers, plus offer clear, concise information that cuts through the competition.
Our tips:
- Consider Shopify if you’re planning to start an e-commerce business. Wix and Squarespace are your best bets if you plan to have a service business and/or a bricks-and-mortar shop.
- Opt for hosting – this allows website publishing and search engine accessibility.
- Ensure descriptions of the services, products and photos are visible.
- Consider a freelance website builder – pricing ranges anywhere from $50 to several hundred, depending on the complexity and necessity for updating.
- Test the website on multiple device types before publishing.
Expert Tip.
If you want to design your website, there are many YouTube videos or other online tutorials and demonstrations.
B. Explore Marketing Options.
Building clientele organically takes time. Your best marketing will come from authentic customer experiences.
You should:
- Know your audience: Consider using paid ads to target specific audiences.
- Get creative: Partner with local organisations to include your business in brochures, newsletters and fundraisers.
- Offer free or discounted services: In exchange for 5-star reviews, offer specific discounts to new and existing customers.
- Digital marketing: Maximise the power of social media and automated marketing through MailChimp or Google Ads.
- Geo-fence: This allows you to track where new customers come from and how they find your business – you can then double down on what is working.
Expert Tip.
Be consistent and steady with campaigns to capture attention. For a potential client to remember your business, it takes approximately six interactions.
Bottom Line About Starting Your Business In Australia.
Starting a business in Australia can be exciting and daunting. To succeed, you must understand that it will require time and effort.
You should organise your ideas, research the competition and develop a strong business plan.
Be sure to follow my business checklist to meet legal requirements, approach financing and create a multi-platform marketing strategy.
Your business ideas can become a reality with hard work, planning, and determination to overcome the many hurdles that will arise. You can do it – you’re an entrepreneur, after all.
Steven
