5 tips for starting your own successful business

Want to be your own boss but are not sure where to start?

The dream of starting your own business often stays just that, a dream. Many people have a great start-up idea but get overwhelmed when they start looking into everything that is required to take their idea and turn it into a thriving business. Here are 5 tips for translating your dream into a reality.

1. Road test your idea

Speak to people whose opinion you trust and run your idea past them to gain feedback and an alternative perspective. You’ll be pleasantly surprised by how many people will be happy to help and connect you to professional expertise.

2. Start lean

Way too many businesses run out of money before they have an opportunity to succeed. Spend as little hard cash as possible to get your idea up and running, and explore ways to promote your business such as creating a basic website and using social media to reach your audience.

3. It takes a community

Starting your own business can be tough and lonely. Find a friendly, affordable accountant and lawyer. Sound technical advice can save you money and tears further down the track.

Similarly, seek out people who’ve been in your shoes. Learn from their experiences and ask for feedback.

4. Follow the money

You need capital to start your business. You may self-fund, borrow from family or friends or tap into a partner to help with your start-up. Map out a draft Business Plan, budget and cash flow projections then stick to your budget. Make sure your business has a dedicated bank account for transparency. Muddling your private bank account with the businesses is a recipe for future disaster.

5. Legals and ownership structure

Choosing the right structure for your fledgling business can be complex. Multiple options, each with different pros and cons can be confusing. Think about: 

  • Your personal liability from your business, its products or services;
  • Future plans for downstream partners or investors;
  • Administrative costs of setting up and maintaining your preferred business structure;
  • Tax effectiveness of your chosen structure.

Being a Sole Trader may be the simplest and cheapest option, but your personal assets are unprotected. It doesn’t give you much protection if things go horribly wrong in your business.

An Australian proprietary limited company (Pty Ltd) remains the most common structure. It needs only one shareholder, one director and one resident director. There is no mandatory minimum paid-up capital and your personal assets are protected. However, directors may be held personally liable if in breach of their legal obligations, and suppliers may require personal (director’s) guarantees.

Whatever your structure, you’ll need to register your business with ASIC. Your form needs to identify the business’ ownership structure. You will also need an Australian Business Number (ABN) for your business from the Australian Business Register website. Then register for the Goods and Services Tax (GST). Registration is mandatory for any business generating more than $75,000 in turnover (not profits) during any 12-month of operations.

Final observation

Setting up your own business is exciting, challenging and occasionally frustrating if you’re not prepared. Put in place smart plans, receive competent tax planning and legal advice, and consider staffing lean, to begin with. Above all else, keep a sharp eye on your cash flow.