Beginner's Guide To Starting A Business

A target market is the group of people your products or services are aimed towards. Understanding who your business is targeting, and where your product or service fits into their lives, is critical to starting a successful business. With knowledge of your target market, you can cater to them and adapt your business accordingly. It also allows you to better assess what the strengths, weaknesses, opportunities and threats of your business are, to create the best plan for the future.

After you have a grasp on who your target market is, you need to start to look at who your competitors are. A competitor, in a business sense, is anyone competing for the same customers as you. Knowing their strengths and weaknesses is important for starting a business so that you can leverage your own strengths and adapt. Staying ahead of your competitors is a must for a good business.

So you’ve got an awesome business idea, but might be wondering how you’re going to fund it. Capital (that’s ‘money’ in business-speak) can be sourced through a range of options - personal savings, business loans, finance leases, venture capital, government funding, crowdfunding, etc. – and choosing the right option can be extremely important. Understanding the difference between debt (owing money) and equity (a portion of ownership in a business) is also vital.

If you have access to money, personal funding is one way to go. It gives you full control of the business because you keep 100% of the equity, and you’ll have no debt to worry about. It’s important to remember funding a new business can be risky due to the fact sales and profits aren’t guaranteed and it’s your money that’s on the line, but if you’re successful it might just pay off.

Another option for raising money for your business is to seek funds from investors or banks. If an investor sees potential with your business idea, they will offer you either an equity stake (a portion of the business’s ownership) or a loan (borrowing money to be paid back with interest). Investors are often helpful, as they may give you access to skills, expertise and contacts which could greatly improve your business, however it means you don’t have 100% ownership of your business. Banks, on the other hand, can be a lot more straightforward, as they loan you money, with an indicated interest rate. They won’t be able to provide you with the same advice investors can, but it’ll mean you’ll be keeping the control in your business.

So you’ve got your idea, and you’ve got your money, now it’s time to deal with the official government stuff. Firstly, you need to choose a business structure. Deciding whether to create your business as a sole trader or a partnership with others is important, as it decides how profits from the business are split, as well as the amount of legal obligations owners have.

You’ll also need to register for an Australian Business Number (ABN). Like most things in the 21st century, you can register online. Make sure you have a tax file number and read up on whether you will qualify for goods and services tax.

If you don’t want anyone stealing your awesome business concept, then it might also be a good idea to register your IP (that’s your Intellectual Property) online at here. This way you’re protected if someone starts copying your ideas.Where are any of us without our webspace? Register a domain, preferably with the name of your business in the URL, at any number of domain name providers. The cost of having a domain may vary depending on what type of business you wish to run and how much online traffic will be about the site (more money for more servers and all that jazz).

To avoid being in hot water from day one, do yourself the favour of knowing the required legal obligations. Understand the Competition & Consumer Act 2010 (CCA) and Australian consumer law in general. It may seem like another arbitrary list of regulations, but there’s nothing cool about misleading or deceptive business conduct, violating safety standards, or sending out defective goods. Due diligence is key. The CCA sets out to look after the little guy (that’s you!). It prevents contracts, arrangements, and understandings or mergers and acquisitions that give big businesses too much of a monopoly on Australian consumers. You can also check out the Australian Business Licence and Information Service (ABLIS) for info about all the licences, permits, approval, registrations and codes of practice you need to know about. Another useful tip would be to keep an electronic copy of your records. Revenue, investments, salaries, receipts – keep it all.

This is just the basics of starting a business; more information can be found here or visit Westpac’s Davidson Institute.

This information is intended to be general in nature only and might not apply to your personal circumstances. When in doubt always seek professional guidance.