What you need to know when starting your own business
Starting your own business is an exciting adventure, but it can also be a daunting one. That’s why we have put together a checklist-style guide to help you navigate the process, ensure your business is set up for success, and explore how we at Ipsum can assist you on this exciting journey.
1. Do your research
The first step in starting a business is to do your market research. This involves researching your target audience, competition, and potential market size. It is essential that you validate your business idea early on and ensure that there is a demand for your product or service. Undertaking market research allows you to optimise opportunities, minimise risks and ensure you’re making informed business decisions right from the very beginning. This resource walks you through the steps to thoroughly research your market.
2. Choose the right business structure
Choosing the right business structure is an important decision that will impact your liability, ownership, and taxes. Some of the common business structure options include:
- Sole trader: If you’re looking to start a business on your own, a sole trader structure might be the way to go. With this structure, you’ll have complete control over your business, but you’ll also be responsible for all of its debts and legal obligations.
- Company: A company is a separate legal entity from its owners, which means that you won’t be personally liable for the business’s debts. You can also choose to have your company be publicly traded or privately owned.
- Partnership: If you’re planning to start a business with two to twenty people, a partnership might work well. With this structure, each partner contributes to its management and sharing in the profits and losses.
- Trust: A trust is a legal arrangement where one person (the trustee) holds assets on behalf of others (the beneficiaries). This structure can be used to manage assets for a business or investment purposes.
- A co-operative: is a business owned and operated by its members. If you’re passionate about a particular cause or industry, starting a co-op can be a great way to work together with like-minded individuals.
- Indigenous Corporation: An Indigenous Corporation is a type of company that is owned and controlled by Indigenous Australians and is governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
- Joint venture: A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific project or purpose. Each party contributes assets or expertise, and shares in the risks and rewards of the venture.
It’s essential to understand the pros and cons of each structure and choose the one that best suits your business needs. Throughout your business journey you may find that your current structure is no longer the best option for your business, and you need to transition to a more complex business model. Our team can guide you through the process and help you choose the right business structure to serve you. You can also find further details regarding business structure using this list generated by the Australian Government.
3. Create your business plan
So now you’ve chosen your business structure, your next step is to develop a business plan. A well-crafted business plan will help you secure funding, attract investors, and guide your business decisions. It should outline your business goals, target audience, marketing strategies, financial projections, and risk management plan. You can download a free business plan template to help you organise your thoughts and ideas and create a comprehensive business plan.
4. Register your business
Once you have chosen your business structure and created a solid business plan, taking care of legal requirements such as tax registration, licenses and permits, and company and trademark registration is crucial. Our team can guide you through the registration process and assist you in obtaining an Australian Business Number (ABN), registering your business with the Australian Securities and Investments Commission (ASIC), and securing any necessary licenses and permits.
5. Secure funding
Starting a business can be expensive, and whilst securing funding can be challenging, there are a few different options available to you. Some of the most common sources are: business loans, venture capital, grants and crowdfunding. Each comes with their own requirements, challenges and advantages so it’s important you understand the qualities of each before making a final decision. The Ipsum team can help you assess your financial needs and guide you to secure financing.
6. Understand the law
It’s time to start off strong by legally establishing and safeguarding your business. This includes knowledge of fair-trading laws to protect both your business and customers from fraudulent practices. You will also need to understand contracts to ensure that they are legally binding and fair, keeping up-to-date with any laws that may apply to your specific business activities. Understanding the legal essentials for business, staying informed and compliant with these laws, and reaching out for help when you need it will help you build a strong foundation. Fortunately, when it comes to financial requirements and responsibilities our team can help. From understanding your tax obligations to maintaining your financial records, we have the skills and expertise to make sure you’re set for success.
7. Protect your business
The next step is to protect your business, and the best way is by planning ahead. Understanding which types of insurance are required, knowing work health and safety procedures, protecting your intellectual property and establishing emergency contingency plans can help safeguard your business. In this digital era, it is also vital that you implement measures to keep your business and customer data safe from cyber threats. By taking these steps, you can not only help to ensure the longevity and success of your business, but also protect your customers and employees from potential harm or loss.
8. Set up your business operations
Now, it’s set up time… Setting up operations involves many moving parts, including choosing a physical location, purchasing or borrowing equipment, managing inventory, and hiring staff. In the digital age, it is also a good idea to consider conducting business online. This stage can be overwhelming, but remember, you are not alone; our Ipsums are here to help you set up your business operations and assist with budgeting, financial planning and the implementation of systems to help support your business. Using a bookkeeping or finance system can help you manage budgets, payments, and invoices to give you more time to focus on growing your budding business. Ipsum can also work through financial forecasting to help you develop an effective pricing strategy.
9. Market your business
It is finally time to share this great idea with the world and market your business. First, work on establishing your market position and communicating effectively with customers. Next, set up a business website and establish your brand to differentiate yourself from the competition. Finally, plan your social media presence to reach new customers and connect with existing ones. With a solid understanding of your market position, effective communication with customers, a strong brand identity, and a well-planned social media strategy, you will be well on your way to successfully sharing your great idea with your potential customers.
If you are considering starting a business in Australia, you are about to embark on an exciting and fulfilling journey, but we understand that it is easy to feel overwhelmed. Having the right support network behind you can truly make all the difference allowing you to be confident in the decisions you’re making and focus on the parts you do best. Our team of friendly financial superstars are here to guide and support you every step of the way. Together, we can work to make your entrepreneurial dreams a reality!