The past year has seen a surge in startups in Australia and worldwide as many people forced into unemployment or concerned about their income have decided to take more direct control over their finances and their futures.
Starting a business is a big decision that can lead to wealth and financial independence, but also considerable challenges – especially when you're starting out.
If you're considering going into business yourself, it's important to learn as much as you can, so you can start your business on strong footing and avoid making mistakes early on that could have a long-term impact.
Every business is different, but there's some general business advice that applies across the board. That's why we've put together this series on how to start a business in Australia, beginning with these 5 basic steps to set you up for success.
1. Find your target audience
Who wants what you're selling? The more detailed the answer to that question, the better you'll be able to target your products and marketing efforts to the people who are most likely to buy.
General ideas will only get you so far. To understand who your customers are and what they want, you need to gather real data by conducting market research. Important things to know include:
- Location – are you marketing or delivering to customers in your local area or a broader region?
- Demographics – is it useful to segment your audience by age, gender, income level, occupation or other attributes?
- Psychology – the attitudes, values and behaviour that would cause customers to choose you over competitors.
- Pain points – what problems do your customers have that you can help them to solve?
When you or an agency have gathered this valuable data on your customers, you can look for common themes and use these to create customer personas. This can give you a clearer idea of the people you're marketing to.
Read more about identifying your customer markets.
2. Assess your finances
Starting a business is rarely cheap. Running out of money is one of the most common reasons why start-ups fail, so you need to have a clear idea of how much your business will cost and how these costs will be covered.
When you know what your fixed and variable costs are, you can perform a break-even analysis using the following formula:
fixed costs / (price charged - variable costs) = break-even point
If you don't have the finances yourself, you'll need to borrow money or obtain investment. Some lenders offer specialised loans for small businesses that can be more favourable than a personal loan, as long as you can provide documents about your business, such as a detailed business plan.
3. Make a business plan
Your business journey needs a roadmap to keep you on course in good time. When you define a clear destination, everything you do should work towards this, but the milestones along the way are also important for keeping you on track.
Writing a business plan helps to guide your own strategy, but it's also crucial if you're seeking investment. Investors will want to see that you have serious and realistic goals and that you're capable of achieving them.
A business plan for investors needs to be more detailed and should include the following sections:
- Executive summary – an overview of the key points that follow in your business plan
- Business overview – detailing the history, location, structure and type of business you have
- Operations plan – how your business will operate and how responsibilities are delegated
- Market analysis – research into your market, target audience and competitors
- Products or services – describing your business offering
- Sales and marketing – what prices you will charge and how you will market to customers
- Competitive analysis – research on your competitors and what you will do differently
- Management team – background on yourself and any business partners or other parties
- Financial plan – details of your startup costs, ongoing expenses and plans for investment
- Projections – expectations of income and balance sheets for the next 2 to 3 years
Before you can write such a detailed business plan, you need to make decisions about the structure of your business, finance, marketing and other considerations, but these don't have to be set in stone. A business plan is an ongoing document that should be updated and revised on a regular basis in line with your changing business needs.
You can find out more about how to write a business plan at business.gov.au
4. Build your brand
The power of good branding and imagery shouldn't be underestimated when it comes to making your mark and keeping you in people's minds, especially in the fast-scrolling world of social media feeds.
Good branding is as much a science as an art. Everything from your business name and the psychology of brand colours to the tone of voice you use on your website can influence how your audience feel about your business and whether they will buy from you.
Once you've settled on your brand's image and voice, these should be followed consistently. To find out more, read our guide to branding your business on a budget.
5. Promote your product
When you've decided on your business' identity and you're ready to start the journey, it's time to create a website and put the word out.
Whether you operate online or locally, digital marketing is the most cost-effective way to reach your target audiences. This involves using search engines, social media and other online channels to promote your business and sell your products to the people who are most interested.
Read Limecube's digital marketing guide for a crash course in SEO, social media marketing and other marketing channels.
Now we've covered the basics, read our detailed checklist of things a new business needs to do and sign up to the Limecube newsletter below to get the latest digital marketing news and tips in your inbox.