According to the most recent Australian Labour Market Statistics, 18% of the Australian workforce is self-employed, sharing their skills as sole traders or running their own business.
If you like the idea of being your own boss, a carefully thought out business plan is the key to turning day-dreams into profits.
Brisbane-based Small Business Advisor, Melinda LeClercq, suggests taking the time to document your goals, financial needs and resource requirements will get your business off on the right foot. Having a solid business plan will help you define your market, identify your competitors and show prospective lenders that you should be taken seriously.
“Without a business plan”, says Melinda, “you have no ‘roadmap’ to measure how far you’ve come, or where you want to go next.”
1. Do your research
Knowledge is power when it comes to business, even if you’re just starting out. Take a microscope to your industry and ask yourself questions such as:
- Is my product unique? If not, who are my competitors and how will my business do it better?
- What is the growth outlook for my industry or niche?
- Do I have all the necessary qualifications, permits or legal approvals required to conduct a business of this nature?
- Who is my market, what are their needs and how can I reach them?
- Could I benefit from a small business course or some expert advice?
According to Melinda, the research stage of your business plan is about ensuring your products and services “solve a need” for prospective clients. When you’ve identified your market, you can hone in on their requirements – and offer something over and above the competition.
“Being successful means finding a niche and a point of difference,” she says.
2. Consolidate your goals
Once you have an understanding of the viability of your product or service, you can make firm plans for the direction of your business. Write a mission statement for your business, outlining the core values you embrace and market needs you wish to fulfil.
You might include goals such as:
- providing a unique product
- offering exceptional customer service
- embracing ‘green’ work practices
- being a leader in your field
These points will form a business summary you can then share with potential clients and consultants you may need to work with (such as bookkeepers or advertisers) as you grow your enterprise.
3. Work out your budget
The next step is to work out the financial nuts and bolts of your business concept. Choose a business software package or start a simple spreadsheet that allows you to list business setup costs like purchasing tools or products, renting office space or hiring staff.
With those big ticket items considered, brainstorm the less obvious costs of running a business. Have you factored in IT costs, postage, power bills or insurance? It may pay to consult an experienced bookkeeper, or canvas advice from your business network to make sure you’ve covered all the bases.
Once you have a clear idea of your expenditure, you can devise a pricing structure that guarantees you’ll turn a profit. This might include your mark up margin on wholesale goods, for example, or your hourly rate for services.
This is also the time to decide how you wish to establish your business as an entity, including applying for an ABN, registering a business name, buying a web domain or getting advice about GST.
These factors can impact your budget as expenses in their own right, or as determining factors when it comes to insurance or marketing.
4. Make plans for funding
With your budget in hand, it’s time to decide how your business venture will be funded. How much can you contribute? Do you need to borrow?
If you’re borrowing funds, a comprehensive business plan is the key to convince your lender that you’re a safe bet. If you’re considering a partnership, get a solicitor on board to ensure everyone is on the same page, and everything is down in writing.
5. Create a marketing strategy
You’ve done the hard work researching your target market, now you need to establish how to reach them and convert their interest into sales. Run a stocktake on your marketing skills to identify where you need to upskill or outsource.
- Could you benefit from a marketing course to learn about market forces and key promotional strategies?
- Are you tech savvy or do you need to hire a professional to build your website or manage your social media interactions?
- Do you need to work with an agency to create television, radio or billboard advertising?
Even your business name and logo will be crucial to getting the right message to your ideal client, so make them a priority right from the start and include them in your business plan.
Once your new enterprise is thriving, Melinda advises against letting your business plan gather dust. “It needs to be an evolving document that is adjusted to reflect changes to your business needs,” she says.
It’s a roadmap you can keep by your side well into the future as you take your business career to the next level.
Need to brush up on your business basics? Check out the range of small business courses available online and write your own map for business success.