Article by Jane Tweedy, Business Advisor, Western Sydney Business Centre
Many people have a lifelong interest to work for themselves, whilst others consider the change upon redundancy or encountering workplace issues. Others believe they have found a niche. What makes the leap from being an employee to a business owner a successful one?
Be realistic and do your research!
You may be an absolutely awesome widget maker, but how much business acumen do you have? Can you review your business strategy, but also address the day to day detail? Doing a job as an employee does not mean you know how to run a business, even if that trade is the core of your offer.
Research prices and competitors, and understand why prices are higher than salaries (depending on overheads could be 2-5 times what you would have been paid as an employee just to cover costs), and what compliance obligations you face. Tools like www.ablis.business.gov.au (Australian Business Licensing Information Service) will assist you with this, but seeing an advisor such as myself who has seen hundreds of start-up businesses, will help you avoid some of the pitfalls.
Starting your own business
To be a true independent small business owner you will start your business from scratch, but you should seek support from advisors, accountants and lawyers.
Many people made redundant consider buying a franchise, because they have a payout and think it’s an entry to business. Remember you are really a combination of employee and business owner as you have the franchisor to report to for many issues including marketing.
Do your due diligence, including checking with franchisees not suggested by the franchisor, to make sure you know what you are buying.
Recognising you don’t know it all
Many people leave their career as a star employee in their field. However, in small business you soon realise and appreciate that as new business owners you are often every department – marketing, customer service, manufacturing, IT support … Make sure you seek help or at least do not neglect key areas like IT (it can only take a few clicks to have all your documents cryptolocked)! Seek help regularly!