Is Small Business For You?Owning and running a business of your own can be a rewarding experience or it can be a demoralising experience. Operating a small business is not just about working for yourself, it's also about having the necessary management skills, industry expertise, technical skills, finance and of course a long-term vision to grow and succeed. Planning is critical to success and requires careful assessment of both personal and industry factors. A good idea is simply not enough for a successful business. Ask yourself whether you are looking for an investment that will grow over the years or whether you are just satisfied taking on something that will replace your last job.
Are your family supportive of you starting a small business?
If your family isn’t happy with your plans this can seriously affect your ability to successfully run your business. Are they prepared to cope with the impact of running the business on your lifestyle and family commitments? Do you have industry experience? It is very important for you to understand the industry that you are entering. You will need to invest time and effort to discuss your plans with experienced industry leaders, competitors, suppliers and other authoritative individuals.
70% of businesses fail in the first five years and one of the main reasons is lack of business management experience/skills. Knowing your capabilities will help you decide whether you are likely to be suited to running your own business. It will also allow you to work to your strengths and think about how to manage your weaknesses eg. By undertaking training or involving other people.
Do you have the necessary training eg. Computer skills, industry specific training, record keeping etc? Consider training requirements as part of your business planning.
You are more likely to be successful if your business venture can meet your interests and needs.
A good plan is like a map, helping you to find the best path to achieving your goals. By planning ahead you are more likely to be able to take advantage of business opportunities and anticipate problems.
Have you considered what can go wrong?
You need to acknowledge everything that can go wrong, assign a probability to it actually happening and then have strategies in place to prevent or minimise the risk. Clearly identifying your target market is critical in the success of your business. You need to know: Who are your customers? Where are they? How do they buy? Why do they buy? How do you reach them? Once you have identified your customers you need to group and target them.
Promotion is much more than advertising. It also includes Personal Selling, Image and Branding, Sales Promotion, Publicity and e-Marketing. The promotion methods chosen need to be cost-effective and appropriate to reach your target market.
You need to be different to your competitors in a way that is meaningful to your customers, to succeed. It is critical that you can clearly answer this question.
Identify both direct competitors (those selling the same product/services to the same markets) and indirect competitors (those offering substitute or similar products/services). You need to know exactly what they offer their customers, their pricing and their strengths and weaknesses.
While you do not know what their reaction may be it is useful to anticipate various reactions and have contingency plans in place. Forewarned is forearmed.
Not checking licence and permit requirements can cause significant delays in starting your business. You need to research this early in the investigation stage.
Seek professional advice regarding the legal and financial environment affecting the business. Take the "Is business right for you?" test provided by Industry & Investment NSW.
This is an estimate of the cost of all plant and equipment, licence, fitout, bonds, insurances etc and working capital required to start the business.
You may like to visit your local branch for information business loans or investigate other means of finance.
Have you thought about a NAB Microenterprise Loan?
|
 |