Wed Jul 18

Top Tips if You’re Thinking About Quitting Your Day Job and Starting a Small Business

Written by News Company

Are you fed up with working for another person and long to be your own boss? Do you think you’d like to take over a local business that’s up for sale? Would you like to make your hobby into something that earns you money? Whatever the reason and the determination for starting a small business, you can be sure it’s going to be an exciting and equally terrifying time. If you’re already in gainful employment, consider the following tips before you take the leap and quit your job. Being master of your own destiny is something to look forward to. However, you do need to follow a plan because there are lots of things you need to think about to ensure your new enterprise is a success.

Are You Ready to Run Your Own Business?

Before you get down to the nitty-gritty of starting a business, take time to consider whether you are ready for such a big step. It might seem like a good idea on paper but putting it into practise is going to be a lot of hard work. Do you realise what running a business is all about? Have you got the necessary skills? You’re going to be making sacrifices and will need your family and friends to support you. Are they ready for such a commitment? Only when you’re sure you’ve got what it takes should you take things further.

You Don’t Have to Do it Alone

Starting your own business is rather scary! You don’t, however, have to do it alone. There are many business owners who would be your mentor if you asked. Advisory bodies will also be able to offer advice, as will friends and family. Some of the input will need to be taken with a pinch of salt, but there will also be some very valuable tips.

What Type of Business are You Planning to Start

In Australia, there are four different types of business:

Sole Trader: You will be the sole owner of the business and responsible for all legal aspects. You have complete control and flexibility. All the profits will be yours, and there are minimal tax and legal formalities to take care of. Personal liability for any debts is one downside.
Partnership: This is when two or more people run a business together, but not as a company. It is relatively easy to set up and raise capital. You and any partners will be personally responsible for any debt.
Company: When a business has a separate legal entity to its shareholders it is called a company. It is a little more difficult and expensive to maintain. You are not personally liable for any company debts; however, you will have little control over the company. A company has to be registered.
Trust: A trust possesses property, income or assets for the benefit of another person or persons. Raising capital is easy, there are fewer liabilities and assets can be protected. Set up costs are high, and any profits will incur penalty taxes.

Choosing a Business Name

Your name is an important thing to think about because it will help create an image for your business. You also need to find out whether any other businesses are using the same name. Think about the brand image you want to convey and how you can stand out from any competitors. It’s also worth checking out whether a domain name is available because you’re going to need to have a website.

Apply for an ABN and register your business name

Before you can register a domain name, you have to register your business name and get an Australian Business Number. You can do this online at the Australian Government Business Registration Service portal. Once registered you’ll be given an 11-digit number that is exclusive to your business.

Where is Your Funding Coming From?

You may be able to fund your new business from your own savings. However, if this isn’t the case, you’ll need to think about finding the cash to help you keep things running while you get off the ground. Various grants could be available, or you could borrow money from a finance company. If you want to know about this option, you can learn more here. If you’re considering applying for a line of credit, you’ll need to have a good business plan.

Write a Business Plan

You can have the best idea in the world, but if you can’t translate that idea into a business, it’s worthless. Writing a business plan will help you realise your dream. It should take into account the market you’re aiming to enter, how much it will cost to set up, what you expect in the way of profit, cash flow projections and other business-related figures. An accurate and well thought out business plan will impress any would-be investors. Don’t be worried about writing one if you’ve never done it before. There are plenty of resources available online.

Register for Your Taxes

If you’re starting a business, you must register for taxes. It depends on the business you are starting as to the taxes you’ll have to pay. However, you can bet your first dollar profit that there will be some to pay. Failing to register will mean you could face a variety of legal implications.

When you’ve got all the above sorted, you and your business are well on the way to getting started. If you realise it’s not going to be a walk in the park, you’ll be fine. Starting a business is a tough thing to do but there are resources and advice available online and from peers and partners. There are going to be a lot of expenses in the first few months so make sure you don’t get carried away. It is possible to reduce some of them and many of your initial expenses will be tax-deductible. Something else you’ll need to think about is marketing your business. Spread the word to the right people and you’re going to be a success.