April 3, 2017
What people WON’T mention about becoming your own boss
It’s a statement filled with promise and optimism, an advertising slogan we have seen everywhere trying to entice us into franchises or pyramid schemes.
Be your own boss today!
While it might sound like a dream, especially for the majority of Australians slogging it out doing 10 hour days for a boss who takes 3 hour lunches and leaves early every chance he gets. The Aussie dream of owning your own business is much more work and stress than many people know.
These are the things that people won’t tell you about becoming your boss and how you can set yourself up for success when you start your own business.
Paying your own tax
Working for another business, you know that your tax is taken out and paid before you ever see your payslip. The accounts department handles all this for you. But when you work for yourself, you need to have that money ready and waiting for when tax time comes up. You’ll need to put aside money each month to account for the tax on your earnings otherwise you could have a hefty bill at the end of the financial year and no funds to pay it.
Paying your own super
Like tax, your super is handled by your company’s accounts department. Your accounts department is working out how much super you’re owed and allocating it to your super fund. This is a legal requirement that companies pay their employees super. When you’re your own boss, you are the only person who can set aside money for your retirement, so make sure you’re doing so.
Being your own boss means motivating yourself. Depending on the industry you’re in, if you don’t get out of bed and go to work, there are consequences brought upon you by your boss.
If you’re your own boss, the only person you have to answer to is you. Finding motivation to get through all the projects you have up and running and to complete work for your clients can be challenging.
Owning your own business means doing EVERYTHING that needs to be done in the business. Accounts, administration, marketing, logistics, the list goes on.
Many business owners specifically don’t consider the amount of time and energy the accounting and administration takes when running their own business. Responding to emails, creating contracts, filing and chasing invoices. It can be hard to find the time to do the actual work for your small business.
Clients don’t pay you on time
When you work for another company as an employee you can be assured that your pay will arrive at the same time every fortnight or month. But as a business owner you don’t have this luxury. Money comes into and out of your business at random times.
One of the biggest gripes business owners have is clients not paying their invoices on time. Many business owners find they spend too much time chasing unpaid invoices, and when you have bills coming in, this can be frustrating.
You can’t call in sick
Feeling poorly? Maybe you caught the flu or ate some bad sushi. That’s too bad because there is no-one to cover for you. You can’t call in sick to yourself, and while you can decide to take a day off anyway, it just means you’ll have more work to do the next day.
The high risk of failure
It’s hard out there, and starting a business has an extremely high failure rate. According to data collected by the Australian Bureau of Statistics 20% of small businesses will fail in the first year. By the end of the second year 30% of businesses have failed. Within five years half the small businesses fail and within a decade about 70% will fail.
Here’s how to succeed
While these facts can be hard pills to swallow, it doesn’t mean that you shouldn’t try to start our own business. It’s just better to go into it with open eyes. Now that we’ve covered the downsides, let’s look at some of our tips to succeed in small business.
Back up savings
Before you walk out of your workplace and burn that bridge, you’ll want to make sure you have the start-up capital you need and backup savings. Aside from your initial setup costs you should have an additional six months worth of income saved to support you while you’re getting started.
Make a plan
Don’t go into starting a business blindly. Take steps to ensure you’re well informed and have a plan on how you are going to start your business, handle taxes and superannuation and get your first client. Use the Australian Government’s Business plan template. This will help you to organise everything you’ll need to run your business.
Stick to schedules
To run your own business successfully you’ll need to establish schedules and stick to them. Outline your tasks including administration and accounts and structure your days making sure all tasks are accounted for within their timelines.
Try to set a particular day for meetings so that your whole week doesn’t get chewed up by calls and meetings. Put one day aside to do outbound and inbound marketing, you can check freelance pages and websites for job opportunities, pitch out to clients, or create content for lead generation such as blogs and social media content and PPC campaigns.
Automate what you can
Owning your own business can leave you very time-poor, especially in the beginning. Automating everything you can is going to free up a lot of your time to focus on the actual work you need to do.
Set up an automated online booking system on your website so you don’t need to go back and forth with potential clients about a meeting time. Use an automated system for your invoices that sends reminders when a client does not pay on time. And schedule your social media and email marketing forward by least two weeks. Consider setting up re-marketing campaigns to capture your warmest audience and set up automatic email responses and replies to take some of the admin out of your day.
While you can do a lot of the work for your business yourself, there will be certain things that you need to hire professionals for. If something comes up that you need help with, whether it’s the website needing rebuilding or help with taxes and super, hire a professional.
Learn how to do it
You’re not going to know how to do everything right from the get-go. You know how to do the work but how to actually run a business, that’s a whole other kettle of fish. So set yourself up for success by completing a short course.
The best course to do if you’re thinking about starting your own small business is the Certificate III in Entrepreneurship and New Business. This course is designed for those who are just starting out on their small business journey.
In the course you’ll learn how to:
- Research business opportunities
- Come up with a plan
- Figure out your finances and taxes
- Understand and apply insurance requirements
- Network and get your first client!
You can learn more about the course here.
Starting your own business is an exciting and scary journey. But, you can set yourself and your business up for success by following these tips.
If you’d like to know more about courses that can help you excel in entrepreneurship you can check out our small business courses here or get in touch with us. We’d love to help you find the right course to succeed in the business world.