Start a Small Business in Australia

There are many reasons to starting a business in Australia. As long as you follow the rights steps for setting up your business, then you will set yourself up for success. There are three main types of businesses you can start in Australia and certain benefits to each. I have seen many new business fail miserably, and I have seen some start-up Aussie businesses become very successful. The thing that the successful Australian businesses have in common is that the founders were passionate and, therefore, motivated. Don’t start a business out of the sole desire to make money. Donald Trump and Warren Buffet have both said do what you love and the money will follow. If you love to cook, then open a restaurant. If you’re a lawyer, then don’t open an online store. Got it? Get it? Good!

First, think long and hard about what you love to do. Later on you can figure out how to make money from the one thing you are truly passionate about. If you’re an artist, then paint or practice whatever medium of self expression you love. If you’re smart enough to follow your dreams, then you will be smart enough to figure out how to make money from it.

A good place start looking around for business ideas is in your own house. Go ahead, look around the room you’re in and find an area that has a problem that needs to be fixed or causes irritation or frustration. That unorganized stack of business cards in the corner, CD’s everywhere (itunes, ipod, etc.), dirty window, shelves that are too high, pile of laundry in the middle of the floor, etc. Everything has potential for the next great thing.

Next, you will want to decide which type of business to open in Australia. You can chose from sole trader, partnership, and company. These are the three ways to start up a business in Australia and here are the tax benefits of each.

A sole trader is the least expensive and easiest business to start in Australia. A “sole trader” status business is not a separate entity for tax purposes. Therefore, you are taxed at the same rate as your personal income tax. This may be good or bad, depending on how much you earn with your business. In Australia the business tax is a flat rate of 30%, while personal income tax is a progressive rate system. The highest rate for personal income tax in Australia is 45%. If you would be in a higher tax bracket, then it makes sense to form your own company, but if you don’t plan on making much money the first year then register your business as a sole trader so you pay less taxes.

If you register as a company in Australia, then you have a completely separate entity that is able to acquire property, invest and pay taxes on its own. Another huge benefit of registering a company is that it separates your personal assets from that of the company for liability reasons. In other words, if you get sued they can’t get your personal house, car, or anything else that is under your name (as opposed to the company name).

You can also register a partnership in Australia with at least one other individual or company. With this, the tax benefits can vary and you may end up splitting the taxes. It all just depends on the individual situation.

Australia is one of the best countries in the world, according to the World Bank, for the total ease of doing business. It is very easy to start a new business, hire employees, and quick to process paperwork and licenses. These are all reasons Australia is a top destination for business excellence.

After you have your business idea, then you will need to register your business and get an ABN (Australian Business Number). Register the business on the state level. Search Google for “your state” business registration.

The next step is to open a business bank account and a merchant account. These will allow you to receive payments under your business name. This is only not required if you are planning on getting paid with cash or cheques made out to “Your Name” (substitute your actual name for “your name”, mate). If you will be building a website, then go register a domain name, but never use GoDaddy ever! I would recommend NameCheap.com. Hire someone to build your website (especially if this is important to your business) and focus on running your business.

The final and never-ending step is to promote, promote, promote, then you should probably focus some time on marketing, and then maybe a little bit of time and money on PR. Seriously, everything should be focussed on promoting and marketing your business however you can.

Preparing Business Plans

This article shows how to prepare business plans for developers or owners of a small or home business. You also may want to use the information in this article to prepare a plan for your own business startup.

Qualifications

You need to be skilled in using a business planning program on a computer. You may want to purchase some reference books on business startups and/or preparing business plans at Amazon.com or some other online or local bookstore.

Getting clients

Place classified advertisements for your services in your local newspaper or on the local craigslist.org website. After the initial contact with prospective clients over the telephone or using e-mail, you normally would drive over to their home or office for a personal meeting. When meeting with them, you need to do the following:

* Review the status of their business startup
* Determine if you and the prospective client can work together
* Agree on the specific services desired, including the types of business plans and other reports
* Determine when to perform the services
* Agree on an hourly or fixed fee you will receive for your services (if the client expects you to develop some of the background information, you should increase your fee accordingly)

You probably want to formalize this agreement about your services and its limitations in an engagement letter that can be signed by both you and the client.

Getting background information

You need to know some details about the client and their business objectives. Here are some questions you might ask:

* What are the client’s name, address, telephone number, and names of people to contact about routine matters and about confidential matters?
* What is the purpose of the business plan? (Examples: raise money, guide the business startup, determine if the business idea is doable and worthwhile, etc.)
* Who will be reading and/or using the business plan?
* What are the goals of the business venture?
* What type of business entity will they use for the business venture?
* Have they investigated the legal and insurance requirements for their startup?
* How do they expect their product (goods, services, or information) to meet the needs of the marketplace?
* What market research have they conducted
* What are their competitive advantages, if any?
* What financial resources do they have available
* Who are the principal players in the business venture and what are their skills?
* What functions are assigned to these principal players?
* What is their marketing plan?
* What is their pricing policy, and is it flexible?
* Do they have an itemized list of their estimated startup costs?
* Do they have a realistic projection of their monthly sales for their first two years of operation?
* Do they have an itemized list of their estimated fixed and variable operating expenses?
* What fixed operating expenses will they defer until the business has passed the break-even point?

Performing your services

Here are the preliminary services you might perform:

* Prepare a tentative business plan on your computer
* Review your tentative plan and make a list of questions, possible problems, and suggestions
* Arrange for the next meeting with the client

Here are the main services you might perform:

* Meet with the client and go over the plan you prepared
* Request any additional information needed to finish the tentative business plan
* Develop any missing information, if this service is included in the scope of your engagement letter
* Make any changes to the business plan as requested by the client
* Print copies of the revised business plan for the client

Here are the final services you might perform:

* Resolve any final questions the client may have
* Accompany the client to meetings with the people who want the business plan (bankers or investors)
* Make any final changes to the business plan
* Print copies of the final business plan for the client and other interested parties.

The Top Ten Ways To Grow Your Business

Following startup, many small businesses are so concentrated on daily business operations that they do not, or cannot, take the time to actively focus on business growth. While others are focused on growth but do not have a strategic plan to achieve it. The Top Ten Ways to Grow Your Business is provided to help your small business enterprise attain growth beyond startup on a continuous basis, and is based on my experience working with small businesses from startups to expansion.

Know Your Market Opportunity – When I work with small business executives and entrepreneurs, one of my first questions, if not the first, is-”Do you really know your market opportunity”, or more succinctly, “Do you know your strategic market opportunity?” And then, “How well do you know your strategic market opportunity?” These are your common how, where and what questions that a small business owner or entrepreneur must ask. For instance, how do you see your market?, where is your market”, and what is your market? Business growth is extricably linked with and to market opportunity, and how well you capture it. In my experience business growth is a function of envisioning your strategic market opportunity, planning how to acquire it, executing your plan, and then working your plan to attain it.

Know Your Customer – Your customer is the primary focus of your business enterprise. Identifying who your customer actually is, followed by knowing your customer needs, is essential in meeting growth objectives. Staying connected with your customers via email, web site, face-to-face conversations, and special customer appreciation programs, such as offering a monthly customer discount, strengthens your customer base and lets you know who your customer is. Think of it this way; a customer-centric organization gains a competitive advantage over competition, which typically results in a bigger share of the market.

Cultivate and Maximize Your Brand – Brand recognition has become critically vital to small business growth as much as knowing your market, customer development, product and service credibility, growth strategy, pricing, cash flow, and having the right executive team in place. Your brand is the ‘face’ of your small business enterprise and how well recognized it is well directly impact your business growth. Cultivating and maximizing brand recognition is crucial to your business success. The new marketing media approaches include social networking venues such as Twitter, Facebook, LinkedIn, MySpace, YouTube, etc, which need to be exploited. Global companies have realized the enormous marketing opportunity these venues provide and have established social networking as a primary business function. The small business enterprise can likewise take advantage of this expanded, nearly free, marketing approach to reach customers and increase brand recognition. Cultivating and maximizing your brand distinguishes you from competition and allows your customers to link your business with your brand.

Develop Your Growth Strategy – Developing a growth strategy is a best-management process which involves determining long-term growth objectives and developing a specific action plan for attaining these objectives. The process involves an assessment of your market environment from the perspective of having the relevant market experience after startup; performing a SWOT analysis; selecting a set of alternative growth strategies based on changing market conditions, and then implementing your strategy. Note that this is in reference to the ‘envision, plan, execute and attain’ model I mentioned previously. The strategic growth plan is developed from the viewpoint of your small business corporate entity, where the focus is on the accomplishment of your strategic business objectives based on four critical questions: Who are we? What do we do? Where do we want to go? How do we get there? The answers to these questions will give you the information necessary to create your strategic objectives for your growth strategy.

Get The Right People On The Bus – This is one of my favorite discussion points, concerning leadership and relates to the strength, character and capability of your executive team. Here we use ‘bus’ to refer to the small business enterprise or organization and comes from Jim Collins’ book, ‘Good To Great”, where he quotes Ken Kesey’s reference to a bus as being the company, organization or firm. Collins found”…if we get the right people on the bus [in the company], the right people in the right seats [in the right executive roles], and the wrong people off the bus, then we’ll figure out how to take it somewhere great [to attain the founder's vision]…” As a small business owner, it is incumbent upon you to ensure you have the right executive team in place that will take your vision of where you want your company to go, and achieve it. Business growth at all levels is largely achieved with the right people on the corporate ‘bus’, driving it to success.

Listen To The Experts-Hire a Business Advisor, Coach – According to The National Federation of Independent Business [NFIB] Education Foundation, over the lifetime of any small business, 30 percent will lose money, 30 percent will break even, and just fewer than 40 percent will be profitable. The Small Business Administration [SBA] reports that 50 percent of all small business fail after their first year, 33 percent fail after two years, and nearly 60 percent fail after four years. A Business Coach and Advisor will work with you to help avoid becoming an SBA or NFIB statistic, help you to maintain focus on driving your business forward, work with you to develop and refine your objectives, help you to develop critical business growth strategies; and provide an honest assessment of where your business is in its life cycle.

Follow Your SOLE – It has been my experience that the small business executive responsible for business growth almost always follows and prescribes to a framework that embodies the envision, plan, execute and plan strategy in achieving business growth. Often this resembles what I have developed for my clients as the SOLE Framework. The SOLE Framework provides the context for accomplishing business growth optimization where you: Solve a critical market problem or need; Optimize growth by meeting customer needs in solving a problem, Leverage your principle business core competency, and Establish a competitive baseline to achieve business growth.

Be A Hedge Hog – The Hedge Hog Concept was developed by Isaiah Berlin in his “The Hedge Hog and the Fox” Study which divided management, leadership and professional positions into two clusters: hedge hogs and foxes, based on Greek mythology, where the fox knows many things, however the hedge hog knows one big thing. The fox is a sleek, cunning, fleetly, crafty and beautiful animal. On the other hand, the hedge hog is a dowdier creature, more like a cross between a porcupine and a small armadillo who when faced with danger rolls up into a very prickly ball and spends his days looking for food. However, Berlin points out that this otherwise simple creature is certainly not stupid, or simpletons; they have a piercing insight that allows them to see through complexity and discern underlying patterns of behavior. The hedge hog sees what is essential, critical, and important, and ignores everything else. To be a Hedge Hog, the small business executive must see only what is essential and focus on it, exploiting the essential in a positive, productive manner and concentrate on three key dimensions: what you can be the best in the world at; what you are most passionate about; and what drives your economic engine.

Establish a Competitive Culture – A competitive culture concerns how your organization is structured for market competitiveness. In fact, corporate culture is a competitive advantage for a small business focused on growth by following a rather simplistic approach, based on organizational shared values, direction, mission and belief that the primary focus of a small business is to first meet customer needs, followed by employee empowerment to meet those needs, then community involvement, using common business sense approaches towards conservation, and then attention to investor interests. This hierarchical organization places the most important focus on meeting customer needs, followed by empowering employees to meet those needs creating a company structure that is positioned to be highly competitive.

Optimize Business Growth – What is Business Growth Optimization? I think a good way to initially answer this question, is to draw an analogy to a perfectly timed automobile engine running on all cylinders, smoothly, fully optimizing its capability to produce maximum power. Similarly, the small business growth company that is fully optimizing its core business competencies is structured to maximize competitive advantages and has a strategic business growth framework; running smoothly on all cylinders if it were, is attaining Business Growth Optimization. In my experience, attaining Business Growth Optimization is a three-tier process involving the SOLE Framework, achieved through the establishment of the Hedge Hog Model and implementation of the Cultural Competitiveness Organization structure.