Heres somewhere to post up your experiences with small business . The good the bad & the ugly of small business. Hopefully it will give those hoping to start one an idea of what it takes to get one off the ground & keep it running Whos first ?
Start your business plan with an exit strategy. Have friends that are onto their fourth business - and have made more money by selling the previous three businesses than they ever did by running them. Things like being able to "take a year off" in their mid thirties to have more time with their kids. Have another mate about to do that for 12 months. Had a long dinner conversation with some incredibly successful clients a few months ago - same approach - basically small business flippers. Most of their wealth has been generated either through selling a business, or by taking advantage of opportunities that the cash flow of the business allowed them to capitalise on. Actual take-home pay is a minimal part of their wealth. Kiyosaki's cash flow quadrant is a simple illustration of what many people dream of - passive income. Getting from E to S is a massive hurdle that most will never make - and money to simply live on is a challenge at first, and one you need to have either an alternative income or a partners income to survive unless you can save a bunch of capital. Getting from S to B is the current challenge.
this is so true! I would also like to add- Work out a rough business plan, but don't go into TOO much detail, if you work out every little bit on paper you will see that you're going to fail. If it feels right and you're enthusiastic about your idea, just go for it.
I agree with the alternative income for start up its a good safety net for fledgling businesses. I think lifestyle needs to be taken into account too .Having your own business gives you the freedom to do things that being a wage slave wont afford you .Something i enjoyed from the first week i started my first business when i was in my mid 20s.It felt good knowing i didnt have to go to somewhere i didnt particularly like & work for someone who didnt care about my welfare for little financial benefit ..
I think that the biggest hurdle for small businesses in Australia is employment. At some point a business has to transition from a 1 person (or couple) operation into being an employer in order to grow. Problem is that every rule and requirement around IR and employment is designed for companies the size of BHP and Pacific Brands and is then applied to every business down to the size of a milk bar which really ties small business up in so much red tape that the owners become overworked and exhausted. From speaking to many business owners I have noticed that the sentiment now for creating a good business is to use technology (as NR mentioned in another post), the internet and overseas materials and labour to create a business that can be run by one person or couple. I think that this will become the future mode of small business in Australia. It looks to me that the really savvy people are riding the wave of technology and communications and making it work for them.
More great advice . The details will unfold as you go & its impossible to know exactly what will happen & when . I think enthusiasm counts for a lot with new businesses. People like to deal with someone who is happy & positive . Its a refreshing change .. I knew i could do what it took to offer a equal if not better service than existing business so i just went for it with very little business experience or a plan .
It's also worth investing in whatever you need to reduce paperwork and to have the discipline to stay right on top of your bookwork. It can be a hard lesson that it is far better to spend a little time entering data every day than facing a huge pile of paper every BAS or tax time. The other lesson I have learned is the pyramid lesson - To try and move my business and customer base up-market gradually - if you imagine the small business market place as a pyramid, it is much easier working further up the pyramid giving excellent service to fewer, wealthier customers than to be fighting for every customer you can get in the gladiator pit at the bottom of the pyramid.
Unfortunately, there are currently a lot of older people that think they're investing in small businesses but are really just buying themselves another job. Some of the franchises put constraints on their fanchisees that make it impossible to adapt. Wendy's & Donut King put incredible pressure on their franchisees. Things like making their franchisees buy everyday consumable stuff like 'sugar' only from the head office, at hugely inflated prices... when they could buy them at Woolies for 1/3 of the price. There was a recent case where a Wendy's franchise owner "topped herself" because she could see no way out. And stay away fromthe Video/DVD hire industry...it's an incredibly small inscestuous industry.
Yep the IR & OHS is a huge PIA & a lot of business owners i know started by using family & friends on a casual /cash basis.. .The internet is a great way to make money its just not for everyone . Knowing your field of work well no matter what it is goes a long way to succeeding . Lets face it weve all had sub standard work done at one time or another & been left with a bad taste in your mouth over it .. Like any trade or career just because you got a pass in your final test doesnt mean your good at it .....unfortunately & doing something proffeciently will get you repeat work where the sub standard only gets one shot at your money .
good analogy there Jonesy, I find myself working predominantly for 2 large clients these days, but I do think this presents an issue for me, at least personally, as I have only the two clients, if one falls off the wagon so to speak I am in deep do, I therefore need to diversify my large clients slightly up to about 4 with no more than 25% of my income coming from any of them, if I have to I can take a 25% hit to my income and still meet expenses if need be. Also even though I am working for "large, wealthy" clients because of the amount of work I do for them the opportunity to get a grater hourly rate is limited, well without loosing hours and therefore putting me back. I am looking at expanding the business in the next 12-18 months by bringing in a partner, who is in a simular line of work, but different vertical, together we should be able to expand our reach into both verticals which have a very simular requirement given the industry, then on from that we will start employing others, and eventually moving on to other things, and exiting when the time is right
Re; I.R. & OHS; Don't forget these laws came in because of all the abuse and accidents that occurred because of dodgey employers. In the age group of most of this forum, I know you've all worked jobs where we were treated like scum and expected to do dangerous tasks that the owner wouldn't risk himself or his family & friends to do. These sorts of employers scar you psychologically. Remember how much you hated going into that place? I know of 1 politician (ex- I.R. Union lawyer), whose sole purpose in life is to never let what happended to him happen to another person. He was on the National Health & Safety Harmonisation Working group. And he was not alone on that committee. These people have more money, influence, energy and drive than the whole business community can fight against. These laws will stay and get tighter. And what it all comes back to is all an employer has to do is to hire the right people look after them like they were friends and family.
In an ideal world. But how do you know who the right person is until they have worked for you for a couple of years? If they start off good and then turn out to be lazy and passive aggressive it can tear a small business apart and you cannot get rid of them. A cunning person can wrap a workplace around their finger, control other staff and make their lives miserable and generally cause the business no end of trouble while at the same time never doing anything that in and of itself would allow dismissal. A big business can survive such a person, a small business cannot. Hence the need for different rules for small/ micro businesses.
^^^ Definately Jonesy... Totally Agree. I'm not saying it's right or is easy...just pointing out (as you already know) that as an employer you have to really do your homework on the people you bring in. I think a lot of employers are niave or lazy when it comes to hiring people. We've all taken one look at the new guy/gal and known he/she was trouble straight away and wondered why the boss brought them in....9 times out of 10 it was laziness or niavity on the Boss's part. It's about more than just Referee checks... (are the referees legit...or just one of their mates they've put down). It's all about someone's reputation in the community...even school kids have a reputation that adults can check up on. If you're hiring school kids, all it would take is a simple call to their school. For instance, the oil/gas industry has an incredibly low staff turnover. Mainly because of whom they hire. You basically need to know or be related to someone already in the industry....it's their referee nomination that gets you the job. If you quit or play up, not only are you finished, but your referee's reputation will suffer too. As a result, not only does it effect your behaviour...it also makes people think twice about whom they recommend as a good worker. It's about getting back to community values. REALLY getting to know the people around you.
Depending on the business - milestone payments, even for short jobs. Lots of times I have seen a 2-week job drag out for months but you'd agreed to full payment on completion.
An interesting article in the SMH about how the current government is gutting small business, and surprising figures on just how big small business is in Australia. http://www.smh.com.au/opinion/polit...bor-scorns-small-business-20121202-2aosy.html
.... This reminds me, when i was in my early twenties i worked my arse off all day and sunday for years, 10 to 12 hour days and the guy i was working for paid me cash but reassured me that it was all above board. I went to do my tax return and asked for two years of group certificates and he did the bolt. I was being shafted as he was taking out too much tax (i was not getting enough nett) and so i was reassured it would be okay at return time... Guy took about 10k off me, which for 15 years ago was alot for me. It was a business that took alot of money and there were five of us working through the week for him, and so now i am very dubious working for small businesses as i often think, is it all above board or not?? That was the thanks that i got for my honesty (never once took a cent from the till) and for always doing extra things for him... One day i will run into him and i often wonder what i will say..l probably nothing.
While working as a 22 year old junior graduate, doing 18hour days in 3 week hitches in the desert, covering two people who had quit. My Boss rang me up from a resturant in Sydney to tell me he didn't like the way I was running his business !!!
