Starting (or buying) a business can be a big deal, or quite minor. If you’re doing something else and just starting your business initially as a ‘side hustle’, you should still follow these steps, as time is money and you want to be sure you’re doing what is right. If you’re planning on going big, making it your full-time job or buying something, then you definitely need to action these steps fully and completely!
Ask These Before You Start a Business
Have you got the right personality?
By this, I’m talking about whether you cope well with uncertainty. Initially and even ongoing, there will be times when you wonder if a client will pay (versus a job, where it’s pretty much guaranteed) or whether you’ll get enough work next week or next month to keep you busy. Are you able to cope well with change (business often needs to be flexible and pivot quite quickly) and are you fairly resilient? If a potential client says “no thanks, I don’t want your product/service”, will you cope ok with that, or take it personally or be ‘shattered’? Be assured, I know after 30+ years of assisting and coaching business owners (and being one myself) that you’re going to get a degree of knockback or rejection. Are you someone who is open to new ideas and especially technology? You may not go digital with everything, but you do need to be somewhat computer/technology savvy, whether you’re a tradie, medico or professional service provider.
Are you a self-starter?
Whilst as an experienced business coach, accountability is a big part of coaching, I won’t be around all the time to prop, poke and pump clients into doing what they need to do. People often go into business for both the freedom and to make good money, but that (especially initially) takes effort and discipline. You have the freedom to start late, or finish early or have super long lunches every day, but if you’re not disciplined and keep that to a reasonable minimum, the money isn’t going to come. Once you’re established and especially if you have team to do things, you can relax more, but initially you need to be motivated and a self-starter, and turn up day in and day out to do what needs to happen.
Have you got the skills?
Consider, and answer yourself honestly, do you have the skills and acumen to be a business owner? Let’s say you’re planning to set up an Accounting Practice. You’ve likely got excellent accounting skills, you’re fully qualified and licensed, but do you know how to market your business? Do you know how to recruit a great team? Do you know how to ‘close a sale’, onboard a client and keep clients happy? Chances are you know about money, finances and budgets, but so often those who know don’t follow best practice. I know one accounting firm where the owner doesn’t track his time (at all) and another practice where they went bankrupt. Great at accounting; not great at business. If you don’t have the skills, can you learn them, factor in a business coach or factor into your budget outsourcing certain services?
Do your due diligence!
If you are buying (whether a stand-alone business and especially a franchise), do your due diligence. Get an accountant to assist you in reviewing the figures and if it’s a franchise, get a specialist lawyer to check out the franchise agreement. They are written for the franchisor, so often are slanted in their favour. Check out the business’ reviews, and talk to customers if possible. Ensure the financials match (reasonably close) the BASes and show improvement. If the owner says the financials are bad because they run a second lot of books or don’t declare things, then they clearly are not trustworthy and are dishonest, so take that with a grain of salt. If you see financial irregularities, legal disputes, regulatory violations, then I would also recommend you stay clear; you just don’t know what problems you might buy into.
Do your market research.
Know what you’re planning to offer and determine if there is suitable demand, or if the industry is already saturated? Is there a need for what you’re proposing – now, but a good amount of time in the future? An industry which is dying is not something you want to get into. Instead, focus on something which will grow, increase demand and be even more popular down the track. Twenty years ago, business coaching wasn’t so popular; few small business owners had a coach, whereas now, it’s almost like having an accountant – many businesses that want to succeed effectively will engage a business coach. Know your target audiences, the competition which is already out there and where you will fit in that.
Create a simple but solid business plan.
This isn’t about creating a tonne of paperwork, but rather, looking at the aspects of a business plan which are important. I particularly believe marketing research, budgets, marketing plan and of course your goals and objectives. I really like SWOT analysis; because what comes out can be really helpful in improving the business. I highly recommend that you don’t outsource this, or if you do, you work closely with the person helping you. The process is as valuable as the plan itself.
Have a budget!
A budget is part of a business plan, but even if you don’t do a business plan, do a budget. Do you actually have the funds to finance this enterprise? 90% of start-ups fail, for many reasons, but one of them is lack of sufficient funds and financial and management acumen. Allow for at least 6 months of costs to be covered without expecting income. Sure, you will start seeing income sooner than six months, but it won’t be big from day one; it will gradually grow. In the meantime, will you be able to pay your bills, eat and keep going long enough for the business to take off?
Consider your timeline.
When do you plan to start this business? What else is on your plate? If you’re expecting a baby in a few months, or you’ve got sick parents who need assistance, or you’ve got a surgery upcoming, then consider if the timing is right. Having said that though, there is never a perfect time; something is always on our plates, but big things, like weddings, births or health may impact your potential success. Be also realistic on how quickly you can set up. A website doesn’t take a week to be set up and published. Marketing takes time to gain traction. Getting testimonials from people you’ve worked with can take a while. You’ll need to set up basic processes, templates, and onboarding checklists … you want to be reasonably ready to manage enquiries when they come through.
Consider your level of passion around this venture.
As much as skill, ability and preparedness come into play, a business owner needs to be passionate about their business and want to do it. If it’s just a job, then perhaps you’re better being in a job, as you walk away at the end of the day and get to switch off. In a business, this is often not the case. You might have to quote at night, prep your social media posts in the morning before you go out, take enquiries from clients outside business hours etc. Absolutely after you’re set up and stable, you can start setting firmer boundaries. I don’t need to do night or weekend work, for example; I’ve been there and done that decades ago – being well-established is a nice place to be where you can have boundaries.
If you’re considering setting up a business or have questions around a certain concept or idea, I offer a Power Hour Plus session, which is up to 90 minutes of coaching in a casual session, rather than ongoing and regular coaching. This is excellent for this purpose as you may or may not go ahead with the concept, but you can access my expertise. Think of it somewhat as a business coaching session on steroids. Perfect for an initial discussion about whether the business idea has merit, what specific questions you should ask, what to investigate and how. Go to the contact page and in the notes field write “I’d like to get more info on your Power Hour Plus session”.
