Starting a business can be overwhelming, but with the right tools and information, you can turn your passion into a successful company. In this Business Kitz blog, we will guide you through the key processes of starting a small business.
What is a small business?
As the name suggests, a small business is an organisation that has less than 20 employees. Usually, these businesses will be privately owned, meaning the owner has executive and creative control of the business and its direction.
How do I start a small business?
We have outlined a step-by-step procedure to kickstart your business idea into gear! Follow along with the following steps to start your small business journey…
1. Draft a business plan
We recommend you start by drafting a business plan. This will help you clearly identify your product, purpose, point-of-difference, audience, business objectives and goal.
In your plan, you should begin with a clear summary of your business and what you are offering customers.
Next, provide a company overview that identifies your relevant industry, how your product fits in the industry and how you will charge your customers. You should then detail your product and explain what ‘gap’ or problem your product is fixing. In order to do this successfully, you should clearly identify who your product is for by describing your target market, audience and any competitors.
Following this, think carefully about how you will find and target these potential customers and begin devising a few sales strategies.
Then, it’s time to think action! Identify what needs to happen for your business to be a success and how you will get there – this means building your team and establishing their distinct responsibilities.
Further, you will need to establish a budget to manage your costs, with consideration of your potential income. Essential to this, you must illustrate how the business will be funded in the early phases. It is also helpful to highlight any potential hurdles, and how you could mitigate these challenges. This will become obvious when you have an in-depth understanding of the current market by performing a market/situational analysis. This allows you to familiarise yourself with your key competitors and the existing gaps in the market.
Once you have this plan in place, you should have a clear vision of where your business is heading! Having a solid idea of the ways in which you want your business to grow can also enable you to secure a loan, if necessary.
2. Register your business
Once you have drafted a business plan, it is time to register your business as a legally recognised entity . This requires you to think about what business structure you want to follow. The typical business structures include sole trading, partnerships or a company. Based on this, you can then register your chosen business name with the Australian Government. You will also need an Australian Business Number (ABN) to allow your customers and suppliers to easily identify your business. Check out this blog by Business Kitz to assist in setting up your ABN. This number will also allow the Australian Taxation Office (ATO) to identify your business for tax purposes.
3. Preparing finances
You will need adequate funding to ensure all business operations run smoothly. Your business plan should give you a general idea of how much capital you will need for your business. Starting off, you will need to first open a bank account under the business name to manage transactions between different parties.
In the event that you do not have adequate finance, there are a myriad of funding options available. The common funding practices within small businesses include self-funding, investors and loans.
A large portion of financing consists of maintaining day to day cash flow, setting up timely budgets and recording invoices. Research shows that inadequate financing due to poor management was the main reason for small businesses failing in their first year. Bookkeeping can be a useful tool in aiding the success of your business. Hiring professionals such as an accountant or bookkeeper could alleviate the stress involved and oversee any potential errors.
4. Ensure your business is compliant with laws
Having solid legal documents and employment agreements in place are essential for ensuring legal compliance. Business Kitz‘s subscription service is the perfect resource for businesses of any size. Subscribers gain access to over 200+ of the highest quality, solicitor-drafted legal, commercial and employment documents, to ensure compliance and establish essential policies for safe, productive workplaces. Having these documents in place will ensure that your business follows fair trade laws, thus mitigating non-compliance fines. If you find your business in a legal dispute or failing to meet compliance, our sister company, LegalKitz, can assist in navigating these issues by providing legal support.
5. Setup your business operations
So you’re ready to start your business operations! It is time to decide whether your business will operate in-person or online. E-commerce structures allow new businesses to target a wider demographic and expand their geographical reach. It also reduces the costs associated with the upkeep of a physical store. You can also choose to have a physical office or work with employees remotely. we also recommend setting up social media accounts to promote your business as an efficient and cost-effective method of growing your business.
Starting a business can be tricky and exhausting, but we are here to make it easier. Check out Business Kitz subscription service today to access our full range of legal, commercial and employment documents to begin your business with a solid foundation that ensures compliance. If you are unsure about how to best protect yourself and your future business, our sister company, Legal Kitz can assist you. To arrange a FREE consultation with one of their highly experienced solicitors, click here today, or contact us at email@example.com or 1300 988 954.