This series of ‘Building Your Business’ blog posts will decipher and explain what should be considered if you are thinking of starting your own business.
The series will include 5 posts:
- Step one: Question Time
- Step two: Considering the challenges
- Step three: Research
- Step four: Planning
- Step five: Marketing
In 2013-14 the Australian Security and Investment Commission reported 22,606 businesses announced they could no longer operate and entered into external administration. From those businesses 5,374 operated within the building and construction industry.
The commission found there were four reasons these businesses were unsuccessful. These were:
- Inadequate cash flow (1000)
- Poor strategic management (892)
- Poor financial controls (698)
- Trading losses (660)
Poor strategic management is a direct result of poor planning. For this reason the first step to take before you consider opening a business is asking questions. By asking questions and seeking information, you are able to make informed decisions and truly decide if starting a business is the right thing for you.
The foundation of your questions should be:
By answering these fundamental questions a clear image begins to form surrounding the basis of the business. But the questions shouldn’t stop there. If you have decided exactly what type of business you’d like to start, begin asking questions about that type of business.
Consider these things:
- Is the market big enough?
- Is there competition?
- If so, how are they competition performing?
Once you’ve questioned the business environment you then need to get a little personal and reflect on yourself. Owning your own business can be quite stressful and requires a strong mind set which is why you truthfully need to contemplate if you have what it takes. Reflect on your previous experiences; consider how you’ve handled setbacks, and how receptive you are to feedback. You are guaranteed to face setbacks and your consumers will undoubtedly provide critical feedback, but what’s more important is that you NEED this feedback in order to become more efficient. Lastly you need to carefully consider your financial stability. There is always a big risk involved in business which only reinforces the importance of questioning, research and planning. If you are concerned with your financial stability there is no crime in waiting until you are a little more stable, that extra year of saving could make a big difference.
If you’ve began asking these questions and are still interested in starting your own business you need to research the challenges that are ahead, which will be the topic of the next blog post. For further information visit franchise.hotondo.com.au