Small business for dummies australian edition

When it comes to hiring and managing employees in your small business, failing to understand human resources and employment regulations can cost you a bundle.

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Connecting Art and Science in Compensation Practices demonstrates the art and science of compensation practice and …. Skip to main content. Add to My List. Small Business For Dummies aims to help you find your way through every aspect of buying, planning, operating and managing your own small business. It explains how to plan for profit and maintain cash flow, grow a loyal customer base, prepare your own marketing plan, enhance your online presence and hire employees. Product Disclaimer: Officeworks cares greatly about the safety of our customers and makes every effort to ensure that the images, descriptions and formulations of each product we sell are accurate and up to date.

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Getting help and delegating what you can. Creating a way of doing business. Wearing Different Hats. Building a Business with a Life of its Own. Documenting and building systems. Setting goals for you and your business. Planning for a graceful exit. Appreciating the Limitations of Your Business. Being realistic about industry decline. Riding the wave of opportunity.

Rating Your Capabilities. Putting yourself through the griller. Prioritising where you need to do better. Identifying Opportunities and Threats. Putting theory into practice. Translating your SWOT analysis into action. Creating a Plan for Change. Independent and single. Tea for two. Matching the Name to the Game. Using your own name. Thinking about how others will find you. Checking for trademarks. Registering your business name. Avoiding trouble. Protecting Your Brand.

Registering trademarks. Protecting other kinds of intellectual property. Registering with the Powers That Be. Checking out what else you need. Working with Contracts. Dealing with standard form contracts. Knowing what to look for in a contract.

Signing on the dotted line. Negotiating Lease Contracts. Setting prices based on costs. Setting prices based on competitors. Setting prices based on perceived value. Building a Hybrid-Pricing Plan. Offering a premium product or service. Cutting back the frills. Getting creative with packages. Charging different prices for the same thing. Forming Your Final Plan of Attack. Monitoring and Changing Your Price. Building Your Sales Forecast.

Calculating hours in a working week. Increasing sales with extra labour. Predicting sales for a new business. Predicting sales for an established business.

Creating Your Month-by-Month Forecast. Costing your service. Costing items that you buy and sell. Costing items that you make. Forecasting Expenses. Forecasting monthly expenses.

Forecasting expenses for the year ahead. Allowing for loan repayments and interest. Allowing for personal and company tax. Building Profit Projections. Step one: Starting with sales. Step two: Adding variable costs. Step three: Showing gross profit. Step four: Adding expenses and revealing the bottom line. Understanding the Whole Deal. Factoring Personal Expenses into the Equation. Understanding the concept of break-even.

Factoring personal expenses into the equation. Changing Your Break-Even Point. Looking at Things from a Cash Perspective. Going to the heart of the matter. Expressing your difference. Defining Who Your Customers Are. Analysing your customers. Understanding what it is your customers really want. Thinking creatively about channels. Researching the market.

Analysing Your Competitors. Setting Sales Targets. Expressing sales targets in dollars and cents. Expressing sales targets in other ways. Building Sales Strategies. Growing a brand that people want. Pricing things right. Defining your social media strategy. Engaging customers and building trust. Networking yes, actually in person. Investing in public relations. Creating marketing alliances.

Keeping Yourself Honest. Comparing targets against actuals. Measuring conversion rates. Getting employees to fulfil their part of the deal. Covering employees for accidents. Ensuring your software is up to speed. Subscribing to super. Meeting Minimum Pay and Conditions. Understanding what laws apply. Choosing between part-time, full-time or casual. Playing the Recruitment Game. Reaching the best applicants. Selling the position. Picking the Best. Asking the right questions. Avoiding the wrong questions.

Matching people and positions. Offering Someone a Job. Sending an offer of employment. Setting a probationary period. Learning to Lead. Daring to delegate. Building a positive workplace. Communicating every way you can. Rewarding with more than money. Reviewing performance regularly. Managing change. Managing Difficult Employees. Figuring out whether the problem is actually you.

Knowing when to draw the line. Giving an employee a warning. Terminating an employee. Creating a start-up budget. Adding enough to live on. Assessing how much you really need. Separating Start-up Expenses from Operating Expenses. Dealing with initial start-up expenses. Sizing Up Your Finance Options. Taking out a business loan. Finding a new lease of life. Getting hitched with chattel mortgage or hire purchase.

Seeking equity partners. Choosing Your Lender. Compare interest rates and loan fees. Consider other interest ing factors. Watch out for honeymoon periods and interest-free credit. Understanding how it all works. Looking at sales. Counting the costs.

Weighing up your expenses. Taking a Snapshot with Your Balance Sheet. Understanding the fine print. Building documentation to support each figure. Appreciating your net worth someone has to, after all. Gazing into the deep, black hole. Looking through rose-coloured spectacles. Doing the sums for sustainable growth. Creating your first budget. Recognising relationships.

Understanding the psychology of budgets. Developing your budget in tune with your business plan. Looking at Cashflow. Deciding whether to register or not.

Choosing your cashflow destiny. Reporting for duty — how often? Coughing up. Staying out of trouble. Growing Some Recordkeeping Smarts. Treating receipts with respect. Cultivating your obsessive-compulsive streak. Riding that t rusty chariot. Declaring home office expenses. Planning Ahead. Getting an instant deduction. Managing stock valuations.

Salting funds away into super. Staying Out of Trouble. Be able to back up your story. Avoid Personal Services rulings, if you can. Monitor shareholder or director loans closely. Budgeting for Tax. Planning for that difficult second year. Putting funds aside. Get Breathing Space. Slash Those Expenses. Pull Back Personal Spending. Get Rid of Dead Weight. Chase Up Overdue Accounts. Run Special Offers. Re-Jig Your Margins. I find it fascinating to sit in a room with half a dozen people, and listen to the hopes, dreams and business ideas of each person.

Many people are planning to start businesses that others have done before, such as opening a hairdressing salon or a lawn mowing business; other people have ideas that are new in some way, such as a business specialising in making homes safe for toddlers, or a start-up delivering mental wellbeing training to corporates.

If your new business involves an entrepreneurial idea that nobody else has done before, strategic thinking is the key to safeguarding your business idea, and transforming creativity into practical action.

Instead, all you need is some capital, a willingness to work hard and lots of straightforward advice. This book provides the straightforward advice bit — in bucketloads. I find small business exciting.

For me, being self-employed is about helping other people, having flexibility in my working life, and making a few dollars to boot. I hope you enjoy the journey too, and I wish you the very best of luck. I can be a little risk-averse at times, worrying more about profit margins and making enough to pay the mortgage, and sometimes, I need that push of encouragement to let my entrepreneurial side flourish.

Hopefully, I find a balance between practicality and creativity throughout this book, and you can benefit from that, too. This book all 20 bite-sized chunks of it is designed so you can pick it up at any point and just start reading.

One more thing. Think of sidebars in the same way as you might do about designer brands: Nice to have, but not essential. Feel free to skip these bits. Foolish Assumptions When you work with small business, you learn to assume nothing. I see everything from clients who time all strategic decisions to fit with the stars no kidding! So, in this book I try to assume very little about you. I focus on the kinds of things I reckon most small businesses are concerned about, combining positive advice about promoting your business and planning for success with practical guidance about the really tricky stuff — such as dealing with unhappy employees or digging yourself out of financial difficulties.

Icons Used in This Book Want to be streets ahead of the competition? Look for this handy icon. This icon flags money stuff, highlighting vital information for anyone with an eye for making a dollar or two. This icon indicates handy advice or insights into how to improve your business or make life easier. A pitfall for the unwary.

Instead, jump in and start reading from whatever section is most relevant to you: »» New to business? I suggest you read Chapters 1, 2 and 3 before doing much else.

Introduction 3 »» Chapters 8 to 11 talk about planning for profit, covering everything from pricing your goods and services, building your first budget, checking the financial sense of your business idea and establishing your very first marketing plan. Chapters 15 to 18 delve into the nitty-gritty, looking at financing your business idea, bookkeeping systems, budgets and grotty subjects such as GST and income tax.

Thank you, dear reader, for taking the time to read Small Business For Dummies. I hope you find something along the way that helps you and your business to grow. Uncover where your winning tactic lies. Decide whether to buy an existing business, start from scratch, or purchase a franchise.

I love small business. For me, small business is about believing in yourself, being passionate about what you do and creating opportunities. Our culture of getting up, getting out and giving it a go fits perfectly with this entrepreneurial existence, explaining why so many Australians are hooked on the self-employed way of life.

In this chapter, I talk about what it means to start your own business. After all, the success of any venture depends on timing — the best time for the business, the best time for the economy and the best time for you. But dig a little deeper, and most self-employed people warm to the question. Happy people love what they do for a living. Besides, being self-employed is often the only way you can get to do just that.

Nine-to-five jobs tend to be rather thin on the ground for trumpet players or climbing instructors! Statistics that compare the taxable income of self-employed individuals with those of employees working in similar industries or professions are hard to come by. However, if you start up a low-risk kind of business — home-tutoring, for example — the financial benefits of becoming self-employed are small but relatively guaranteed. On the other hand, if you start up a high-risk business — say, launching a new invention — you could end up losing everything you have.

Or, you could just wind up a millionaire. Here are some other reasons being your own boss feels so good: »» You get to set your own rules: Your rules may involve anything from setting enormously high standards, to declaring mufti days seven days a week.

However, in theory you can pick and choose which hours you work and when you take holidays. I know firsthand how frustrating it is to be forced to do stuff the wrong way, or the slow way, just because the person who is giving the orders happens to be your boss. For example, a business colleague of mine who recently purchased an electric car was acting according to her principles, rather than seeking to save dollars.

Nothing beats putting your heart and soul into what you believe in. I find many of the articles helpful and a bit of nudge to keep my thinking fresh. This show is all about setting and managing goals, whether for your side-hustle how I love that term!

These practical podcasts help with the nitty-gritty details of business, with hundreds of episodes covering all kinds of different topics. According to the Australian Bureau of Statistics ABS , home-based businesses make up over half of all the small businesses in Australia, reflecting part of an international trend towards more businesses operating from home a trend presumably partly fuelled by improvements in technology.

Home business is the spawning ground from which larger businesses are born, including iconic brands such as AirTasker, Billabong, Canva and Salt Gypsy. No holiday pay, no sick pay, no bonuses — long hours, filthy pay and no promotion. I had to agree with him. Running a business is an inherently risky game.

Sometimes, this risk makes things exciting and, other times, just plain old scary. Of course, business success is a fantastic feeling but, on the other hand, failure can be quite catastrophic. You can lose your house, your job, even your family, all in the one hit, not to mention the disillusionment of having precious dreams crushed by harsh reality. How well you cope with risk depends on your age, personality and health. I recommend you always minimise risk by keeping a tight control on your finances, a topic I explore in detail in Chapters 15 to For many people, the only sure-fire way to succeed is to work loooong hours in the first year or so, taking on the roles of bookkeeper, marketing consultant, salesperson and managing director all in one.

These long hours do tend to settle down as your business becomes established, however, and the ABS reports that the average self-employed owner-operator works 42 hours per week.

And, at the other end of the spectrum, many people choose to only work part-time in their business, content to choose lifestyle and flexibility over income. One of the hardest things about being self-employed is staying motivated. Not just in the first year, where everything is interesting and different, but year after year after year. Of course, as your business grows, you can hopefully employ staff to help.

Chapters 13 and 14 talk more about becoming an employer and building an effective team. A bumper year, and the bank account is rosy. In Chapter 15, I talk about creating budgets for business set-up expenses, and share tips for securing business finance. Some consultants advise you not to expect to make any money at all in your first year of business, and to have savings put aside to pay for your living expenses during this time.

Such advice is prudent, but the truth is that sometimes businesses take even longer than a year before they make a profit, and even businesses that have been cruising along happily for years can strike hard times.

How you cope with the effect of this insecurity depends not only on your personality, but on your family commitments as well.

You have to consider not only your own skills and expertise, but also whether you have the timing right: The right timing for the business idea, the right timing for you and your family, and the right timing for the business environment.

If you were selling fondue sets in the s, chances are your business would be successful. Try to sell the same fondue sets for a living these days, and it would be slim pickings indeed although my mother does have very fond memories of cheese and chocolate fondue dinner parties. Be aware of trends in your industry and capitalise on opportunities. For example, the long-term and growing interest in low-carbon and energy-efficient building supplies is a positive trend that indicates a whole host of business opportunities.

I remember a client who decided to build storage units in a busy country town. The only snag was two other developers opened units that same year, creating a glut of supply and fierce price wars.

Give yourself time to plan carefully for the peak season so you can take full advantage of that period. Evaluate how robust your business idea might be in the face of natural disasters, pandemics, recessions or changes in government policy, and how you can design your new business to be as agile and responsive as possible.

Timing it right for you Of course, good timing is not just a question of whether the outside world is ready and eager for what you have to offer. Good timing is also about how ready you are, personally. In Chapter 3, I explore how you might compensate for a lack of experience, and why buying an existing business or purchasing a franchise may be preferable to starting a business from scratch. In fact, planning for your business is so important that I dedicate Chapters 4 to 7 to this very topic.

I talk lots more about how much money is enough in Chapter Most 18 year olds are unlikely to have enough experience to cope with running their own business. On the other hand, a 65 year old may be short on motivation, ambition and energy, especially for new ventures requiring long hours and huge input. The backing of your partner is vital during this time.

Timing it right for the economy No business is an island but, rather, functions as an organic part of the world around it. Imagine owning a fantastic, go-ahead cafe in the Pilbara region of Western Australia. Be aware of the following economic influences: »» Industry-specific events: Be alert for changes in your industry that may affect the viability of your business, such as additional licensing requirements, new government regulations or major shifts in available technology. For example, with the changes in financial planning regulations, many accountants are now restricted in the types of advice they can supply to clients.

Think of a political football such as the solar industry, which has been subject to major government funding changes every year or so for the last 15 years in Australia. Keep your ear to the ground and listen out for these changes within your industry network and via the media, before they happen. Importing, exporting, construction and real estate are just some of the businesses that can be affected, as well as any business with large borrowings.

Such businesses rely on profits built up over previous years to see them through. Stay abreast of current economic trends and how they may affect your business plan. Instead, check out what courses are available.

Probably the most practical approach is your local TAFE. Although the courses on offer vary from campus to campus, look for a particular small business course that focuses on getting a business started, and which includes formulating your very first business plan.

Similarly, you may find something relevant through your local community college, but be aware that the quality of these courses varies. For example, I completed a joint major in Accounting and Business Management, and the subjects provided a great all-round understanding for all kinds of things.

If you have a university degree under your belt in a different area, a Master of Business Administration MBA is another option. Businesses fall into three broad categories. The first type of business is one that has been done before, and therefore, has been tried and tested. The second type of business is one that finds its own niche, thereby doing something especially tailored to a small group of customers. The third type of business is one that launches an entirely new concept on the world.

Playing it safe Probably the safest and most reliable approach is to go for an established kind of business; one that lots of people have tried and succeeded in before you. Most retail shops and many service businesses fall into this category — for example, bookshops, florists or hairdressers, builders, electricians or plumbers. One good thing about going into the kind of business that many others have done before you is that you can find out what to expect in terms of sales, profit margins, expenses and more.

With this kind of business, success depends not so much on the strength of your original idea, but more on good business sense and your ongoing capacity to differentiate yourself from your competitors. If possible, this difference should capitalise on your skills and resources, so that this difference is hard for competitors to imitate. Do bear in mind that changes in technology are shaking up even the most traditional kinds of businesses.

For example, bookshops used to offer solid business profits, so long as you selected a good location and you knew your trade. However, the changes brought about by ebooks and online distribution mean that, nowadays, opening a bookshop would be a very different proposition indeed. Similarly, a bookkeeping business may have been a safe bet in the past, but cloud technology and new accounting software solutions are rendering many bookkeeping services obsolete.

If you choose to go with an established kind of business, you may prefer to purchase an existing business, rather than starting from scratch.

For many kinds of established businesses, franchising is also an option. Skip to Chapter 3 to find out more. Finding your own niche The next type of business is called a niche business. Developing a niche means doing something specialised and catering to a small but hopefully dedicated market. A niche business can cover anything from manufacturing custom guitars to producing hand-stitched silk lingerie, or from designing permaculture gardens to cooking special food for diabetics.

Starting small means low risk, less expense setting up and an opportunity to try out your idea and test the response. The best way to promote a niche business is usually through online advertising, where developing your own e-commerce site along with a social media presence can mean generating business all around the globe. For lots more about social media and building your marketing plan, check out Chapter Going out on a limb The last type of business is called the entrepreneur type, reserved for new inventions or new market concepts.

Untested and unknown, this type of business can occasionally experience resounding success but sadly , more often, spectacular failure. Though the chance of failure is high, if you do succeed and success is always possible , the rewards can be huge. I talk about market research, and how to find the products or services that customers really want, in Chapters 2, 5 and Assessing your chances of survival Australians are a pretty entrepreneurial bunch.

With a population of 25 million give or take a few , almost 2. Almost 10 per cent of the population run their own business. But what about business survival? Are all these businesses fly-by-nighters, that start up one year and are gone the next? Not so long ago, a business coaching franchise advised a client of mine that 80 per cent of businesses go bust in the first year, and only 8 per cent of businesses survive five years or more. Pish tosh. The ABS reports that half of new businesses without employees, and 30 to 40 per cent of new businesses with employees, cease trading within the first three years.

In my experience, very few business people rate their overall experience as a negative one. Instead, complete this illuminating questionnaire to see how you rate in the success stakes. Your most recent power bill is unreal as is your newest love. Do you. Dinner needs cooking, the kids need help with homework and your mobile is ringing. What do you do? Have a beer and ignore everyone.

Scream at the dinner, stir the homework and pour soy sauce on the kids. Cook, call out instructions to the kids and take the phone call. All at the same time, of course. Do one thing at a time, logically one after the other. How are you with maths? Okay, so long as you can make figures up whenever you have to. Just the thought of maths makes you feel inadequate.