10 Things You Should Know Before Starting Your Own Business
There’s nothing quite like working for yourself. Choosing when you work and what projects you take on is a liberating experience. If you’re considering taking the leap to working for yourself or freelancing, you’re not alone.
In America from the spring of 2021 there was a sharp increase in the quit rate as the vaccine rollout decreased the severity of COVID-19 symptoms and the job market recovered. 47.4 million Americans quit their jobs in 2021, they called it The Great Resignation and there’s speculation we’re headed for one here in Australia.
The Australian bureau of statistics shows that nearly 43% of workers plan to look for a new job in 2022.
For many Americans the great resignation has come hand in hand with striking out on their own. According to the labor department, the number of unincorporated self-employed workers has risen by 500,000 since the start of the pandemic.
If this data is anything to go by, Australia is headed for a great resignation and a small business boom ourselves.
If you are thinking about chasing the Aussie small business dream and starting up your very own enterprise it’s just not that easy. According to the Australian Bureau of statistics nearly 60% of small business fail in the first three years.
Here are ten things you should consider before starting your own business.
Save for it
Starting a small business can be expensive. There are a lot of little expenses and some very big ones when you first start your small business. The website costs, the insurance, the domain hosting, everything adds up. You’ll need to budget and work out exactly how much you are going to need to get started.
Before burning all your full-time or part-time bridges, make sure you save 6 months of living expenses so you can have piece of mind while you build your business.
Business not pleasure
‘Do something you love and you’ll never work a day in your life’. But unfortunately, even a dream job has parts you don’t like. And this is especially true of running your own business.
When you run your own business, it’s likely going to be something you love doing, like baking, or writing. But what you might not realise is you’ll only be doing that part of the time. The rest of the time you’ll be planning business strategies, marketing campaigns, completing administration and invoicing. The business side of running your own business is time consuming and more boring than you might realise, but it’s so important to the health and longevity of your business.
Know your industry rules
When you work in a company all the industry rules, insurances and checks and balances are the responsibility of the boss generally. You never really need to think about them or even know about them. But when you run your own small business, the onus is on you to know what you can do, what you should do and the rules and regulations of your industry.
Every industry is governed by laws and industry standards. You’ll need insurance, licences and approved contracts which brings us to the next point.
Have your contract looked over
Have someone look over your contract or better yet have a proper legal professional write your contract. You want to make sure everything is above board and you’re covered if anything goes wrong.
When it comes to contracts, you’ll be rewriting it more than once. As you encounter clients who find loopholes, you’ll want to close them. To begin with, try to think of every possible issue you could have and include a clause for it. One saving grace in a contract is to require and keep a 50% deposit up-front for the project and include a get-out clause in case of family emergency or a very annoying client.
Don’t take every client
It’s tempting when you are starting out to take every client who enquires but all this is going to do is stress you out and turn your portfolio into a big muddled mess. Decide where you want to specialise and only take on clients that will further your goals, support your business niche and help you to level up.
Establish your authority
Getting people to pay you good money for your work depends on establishing yourself as an authority in your industry. You can start this process with little steps like sharing your tips through blogs on your website and guest blogging on other sites and then ramp up to offering your services as a guest speaker, or as a podcast guest.
Position yourself as the go-to person for your niche within the industry and live up to that reputation by constantly learning and staying ahead of industry trends. This will help to build trust with your target market and make it easier to convert your warm leads.
Work smarter, not harder
Automate and outsource everything you can. When people start their own business, they don’t realise how much of their time will be wasted with invoicing, administration and other menial tasks. It’s so important as a business owner to work smarter.
Outsourcing can be decided by a simple cost analysis. Say you have administration tasks that take you two hours to do, and you could outsource them for $60 and make $300 doing work for a client in those two hours. You’re making $240 by outsourcing those tasks, you’re supporting another small business and building contacts for when you scale your business, it’s a no brainer.
Know your target market
In marketing there is a saying “if you’re talking to everyone, then you talking to no-one”. Basically, this means if you’re trying to market your product or service to everybody then you don’t know your product or service and your marketing is going to fall on deaf ears.
Take the time to plan your marketing strategy and get to know who you are selling to. How old are they? Where do they hang out online? What do they like? How much money do they make? These are all factors to consider.
Plan your next 3 years
Starting out with your business it can be intimidating to think about where it will be in three months, five months or two years. But setting out without a plan isn’t going to help. You need to know what you want to accomplish, when you want to accomplish it and how you’re going to get there.
Completing a detailed business plan that maps out your next three years and how you are going to scale your business will help you track your progress and stay the course.
Decide what success looks like to you
With the intense emphasis on hustle culture, it can feel like the only way to be successful is to be working 24 /7, never sleeping and never taking a day off. But really if you’re hustling that hard to make ends meet, you’re not doing it right.
You should be able to decide what success looks like for you. Maybe it’s having every Friday off, or choosing work hours that suit your lifestyle, turning down the work that doesn’t make you happy.
The only person who should be measuring and deciding what makes your business a success is you.
If you’re thinking about starting your own business or you’ve started your own business but are struggling with some of the administration and practicality of running a business check out our Certificate III in Entrepreneurship and New Business.
This course covers, strategies, marketing, tax and a whole host of other helpful skills you’ll need to excel in the small business world. You can learn more about the course here or get in touch with our friendly course advisors to discuss your options.