With the Australian economy in the midst of a large transition away from mining, Prime Minister Malcolm Turnbull has his sights set on innovation to pick up the slack. With that in mind, it seems that now is the perfect time for young entrepreneurs to ditch the traditional 9 to 5 in favour of being their own boss. After all, if you have a killer idea and the drive to follow-through, what’s stopping bright young entrepreneurs like you, right?
Well, a few things, but they can be avoided! Here are 3 hurdles to look out for.
Letting your naivety get the better of you
A good friend and I had a great idea around a clothing brand that donated a portion of its profits to a different charity each quarter. Of course, we thought we couldn’t fail.
As we started registering our business name and ordering the first run of shirts, we failed to really analyse what we were doing and how we were going to properly establish a target market. Not only that, we both worked full-time and planned to run the business as a side hustle, rather than taking the plunge into running it with no distractions.
We let the excitement of our idea and the possibility of success get in the way of appropriate planning. In hindsight, we should have remained objective (easier said than done, I know) and really thought about who we were selling to, how we could target them, how we were different to our competitors and did we have enough time to make it work?
In the end, we realised we simply couldn’t juggle our full time jobs with a business that wasn’t receiving our full attention. Luckily, we found someone who was able to purchase the business and grant it the time it deserved.
We lost a small amount of money, but the lessons learnt through the mistakes we made were far more valuable. Plan for everything, have contingencies and don’t let your excitement get in the way of good decisions.
If you’re looking to start a business, you’ll need money to make it happen. Depending on how grand your idea is, you may need a lot of it.
When I sat down with Jake Smyth and Kenny Graham, owners of the quirky bar and burger joint, Mary’s Newtown, we spoke about the biggest hurdle they have faced so far as business partners.
After establishing Mary’s, the duo went on to own The Unicorn, a great pub situated in Paddington, Sydney. With 2 ventures under their belt so far, it seems that getting investors to cough up the dough is a difficult task.
“Finding investors to say yes, then finding investors after they’ve said yes to actually stump up the money,” says co-founder Kenny Graham.
Zaki Ameer, founder of Dream Design Property says the best way to remedy this is by having a strong business plan, as well as constantly searching for alternative ways to raise capital.
“It’s also important to be constantly seeking new ways of raising capital and to always have a ‘Plan B’,” he says.
Not balancing the books
In the rush of running your own business, it’s easy to neglect the drawl, but equally important stuff – accounting.
Remember that you’re only one person, and even if you’re working as a small team, it’s not worth overburdening yourselves with work, no matter what it will save you on hiring an accountant.
Entrepreneur and author Alan Manly agrees, “being busy is not being in business. Visit an accountant, preferably not a friend, and show them your income and expenses. So often, startup’s find it hard to confront the full cost of doing business. Delayed expenses are easy to overlook in the excitement of ‘setting up’.
Tax will need to be paid and no matter what the accountant charges, it will be a bargain.”
And if it’s not the money that concerns you about letting a third party balance your books, consider the time better spent actually running your business. Or more importantly, the downtime you need to recharge your batteries.
Feature image: www.iaaf.org