Starting and running a business can be incredibly rewarding, both personally and professionally. But it’s also extremely challenging and not for everyone.
How you set yourself up is paramount to building a sustainable business model that works for you.
If you’re looking to leave your 9-to-5 job and start working for yourself, here are some tips to create a solid foundation and influence greater success.
1. Set clear intentions
Before any business administration begins, take the time to get really clear and honest about what makes you tick.
Explore what you personally need to stay motivated and driven, especially on bad days (we all have them). You may prefer structure, working on your own, starting work at 11am, or whiteboarding your goals.
Ask yourself what you want from running a business and how you want life to look as your own boss – visualise what you want, write it down, and build your business around your personal needs and wants.
This process of conceptualisation and intention setting is a powerful tool to guide direction, help with decision-making, or remind you why you wanted to start a business in the first place.
2. Build your buffer
A financial buffer is absolutely mandatory when running your own business.
Life is unpredictable and making the switch to being entirely self-sufficient comes with costs and risks, from sick days to bills, equipment costs and tax.
How much should your financial buffer be? As a rule of thumb, consider how much financial investment your business requires upfront, including materials, labour hire, marketing or training. Add to that your daily cost of living multiplied by the period of time you think it may take to start invoicing and earning through your business.
For a more complex business, this may be six months or more. If the figure prohibits action and you are committed to starting sooner rather than later, consider a business loan to get going.
Always put money aside in your buffer for tax – I aim for 30% of my invoicing.
3. Create a business plan
A business plan is a strategic document that helps you map out what you want to achieve and how you’re going to do it.
Don’t be intimidated if you haven’t done one of these before; there are loads of free template downloads available online. Through the process of planning, you’ll quickly see areas that require more thought.
Avoid getting too caught up in the detail or trying to make it perfect – your business is almost definitely going to evolve over time and you can update the plan as you go.
If you’re completely lost, try enlisting the help of a business coach or mentor, or approach any business owners you might know.
4. Get an ABN
Registering your business for an Australian Business Number (ABN) isn’t mandatory, but it’s helpful and recommended.
An ABN can make dealings with the Australian Tax Office easier, provide eligibility for other registrations like GST, and offer legitimacy to help build trust with potential clients.
You can apply for an ABN online via the Australian Business Register.
5. Learn about tax
Depending on the nature of your business, tax can very quickly get out of hand so it’s important to keep records and understand your tax obligations.
Once annual turnover exceeds $75,000, for example, you’ll need to register your business for Goods and Services Tax (GST) where you’ll collect and pay GST on behalf of the government, reported via a quarterly Business Activity Statement (BAS).
I can’t express enough the benefits of being organised with record keeping and engaging a good tax accountant to help you understand your tax and avoid an unexpected tax bill or fine.
Networking should not be hard or scary, it’s about how you prefer to connect with others. You’d be amazed how many people are willing to help a small business and where you might stumble upon these contacts.
I personally shy away from large networking events and prefer incidental networking by being open to talking to others, particularly in a business setting.
7. Reach out
A support network is invaluable for the self-employed, particularly sole traders. If you’ve come from an established workplace, it can be very isolating to suddenly work alone, without anyone to bounce ideas with or banter about the weekend.
There are many resources available to connect with others including Facebook groups, Meetups and LinkedIn.
Take your close friends on the journey with you too and help them understand that you may need more support on some occasions and may be entirely absent on others; when work comes through, you’ll often need to take it, regardless of plans. The right people will understand.
Sarah Harrison has been a self-employed content consultant, digital nomad and solopreneur since 2012. She’s wildly passionate about helping others realise their potential and is often approached for advice on how to start a small business or commence full-time freelancing.