Your new business idea has bean brewing but is it water tight? Consider these five questions to avoid getting burnt.
Small business can be a grind - come with us as we follow Joe on his journey to fulfil his lifelong dream of owning his very own coffee shop. Often aspiring small business owners, like you, come to a crossroad: do I buy an existing business; franchise; or, start from the ground up?
Joe like many of us these days has an appreciation for the finer things in life - like coffee! He would rather go without than circum to drinking instant coffee. Joe's pride and joy is an old Italian coffee machine that sits proudly on his kitchen bench, much to his wife's disapproval. But he adorns their house guests, treating them to his freshly made coffee.
His friend's often comment that there is nowhere in town that even comes close to his coffee and he should open his own shop. "Your wife could even sell her delicious pastries" they comment eagerly.
Joe and his wife reflect on their friends comments after they leave. Joe says "Screw it! I'm going to do it. I'm going to be my own boss." "Oh dear" Joe's wife says, with a worried look on her face. "Joe, you better go see the Accountant".
Many hours latte of Joe googling and trying to figure out what to do next by himself - his wife suggests he see a specialist (click here to read more). Joe goes to see his accountant and lays out his grand plan, all the while admiring the leather patches on the bean counters tweed jacket.
"Joe, I hate to be a Debbie downer but more than half of small businesses fail in the first 3 years. To overcome these odds, I always ask my clients just like you a few questions to see if they are up for the daily grind of small business:"
- Have you ever worked in this industry & are you qualified?
Experience matters & would you buy a coffee from someone that doesn't drink it?
- Have you run your own business before?
Marketing, extra hours and the pressure of making payroll are just the tip of the ice mocha. Do you know what you are getting yourself in for?
- Do you have the personality to work in customer service?
If family and friends look at you weird when you suggest the idea, then best look into some training to perk things up a bit. When was the last time you went the extra mile?
- Are you good with money & can you count beans?
You need to be able to track where your money goes on purchases and be able to forecast upcoming expenditure like GST, Wages tax & super. Do you have a personal budget/savings habit?
- What is your purpose for the business?
You need a clear vision of your goals & core values. What do you stand for and why should customers buy from you?
Make the best decision and don't froth it up
"Joe, I know we have covered a lot today, but basically you have 3 options here - startup your own business, franchise a business or buy an established business. Let's explore them in more detail, so that you make the best decision and don't froth it up". Stay tuned for our next instalment where Joe considers starting his own business from the ground up.
Do you have an idea brewing for a small business? Call the barista's of books at Logan & Hall Accountants on 03 5032 1121. Because our business is more than just counting beans and we're pretty grounded in your passion, whatever that might be.