5 Factors to Consider Before Starting Your Own Business
Starting your own business can be both exciting and scary. But even if it’s something you’ve dreamt of since you were a young child, this is a decision that shouldn’t be entered into lightly.
Therefore, here are five factors you should consider before deciding whether being self-employed is right for you.
- Whether You’re Ready to Be Your Own Boss
One of the top reasons people start their own businesses is because they want to be their own boss. While this is definitely a perk, being solely responsible for your own company isn’t always an easy thing to do.
For instance, a few disadvantages of being self-employed include having to do most things yourself, access to fewer networking opportunities, more time spent away from family and friends, and lack of financial security. So, if you can’t hack these, you may not be ready to be on your own.
- How Much Revenue You’ll Need
Setting up a new business can be costly. Therefore, you want to make sure you have access to the funds necessary to build your startup before you begin the process, only to soon find yourself in over your head. This may require accessing your savings, taking out loans, or seeking a venture capitalist, just to name a few.
When calculating your estimated startup costs, business.gov.au suggests that you consider:
- License and permit fees
- Doman registration fees
- Utility expenses
- Employee wages
- Insurance costs
- Equipment and supplies
- Building fees (if you’re operating in a brick-and-mortar)
- Projected Industry Growth
Another factor to consider is the status of the industry you’re planning to enter. Is it in the process of speeding up, giving you access to greater returns in the years ahead, or has it been slowing down recently, suggesting that it’s going to be he even harder to survive?
If you’re not sure, an easy way to find out is to Google your industry plus the words ‘business forecast’ (like ‘house paining business forecast’ or ‘restaurant business forecast’). You can also research other startup business ideas that are on the upward trend, such as those related to selling selfie drones or smartwatches, and do one of those.
- Your Business Structure
At the start of a business, you also want to think about how you intend to structure your company. The four most common business structures in Australia are:
- Sole trader – most simple and cheap business structure, and involves just one business owner
- Partnership – two or more people own the business together, fairly inexpensive to both set up and to operate
- Company – run by directors and owned by shareholders, higher costs to both create and administer
- Trust – is operated by a trustee, which is either an individual or company, and can be expensive to set up
If you need help determining which is right for you, you may want to talk to your accountant or business counsel.
- How You Want to Define Your Brand
One of the final considerations is how you want to define your brand as, once you start building your reputation, it can sometimes be difficult to change. This begins with asking what you want customers to feel when they think of you.
For example, maybe you’re opening a locksmith business and you want your customer base to feel safer after interacting with you. Or perhaps you’re entering food services and you want your customers to feel satisfied after leaving your establishment.
Think also of the environment you want to create, both online and off. When people see the inside of your store, your website, your social media pages, and all of your marketing materials, it should elicit your intended response. This also requires being consistent across all platforms so that each one sends the same message.
Do these five things and you’ll know better whether owning a business is right for you. If it is, great! It’s time to get started. And if not, at least you know this before getting in too deep.