Prepare yourself for business

Whether you're about to start a new business, buy an established business or turn your hobby into a business, you’ll need to prepare yourself for any challenges you may face.

Before you start to work in your new venture, we recommend you take some time to consider the following key areas to help develop your business.

1. Analyse your business idea

The very first step of the process is to do some research and analysis to determine whether your business idea has potential and if you’re the best person to build it.

Some questions to consider include:

• Is there a need for your product or service?
• Is there a desire for your product or service?
• Who will buy the product or service?
• How hard will it be to develop your idea?
• Is your idea financially viable?
• How will you protect your idea?
• Who are your competitors?

Consider yourself

Operating a business is not just about working for yourself. It also means having the necessary skills to grow and succeed.

It’s important to consider whether you really understand what’s involved and whether you’re suited to running a business. Ask yourself:

• Why do you want to start a business?
• Do you have the skills to set-up and run your business or will you need to outsource?
• What are your business and personal goals?
• What income do you need to generate for your business to be successful?
• Do you have the financial capacity and time to start and run your business?

2. Define your customers and competitors

Conduct market research to help you understand your customers, your competition and your market. Research your customer’s habits, needs and where they’re located. Analyse who your competitors are, where they’re located and what they do better than you.

Through this research you’ll understand:

• who your customers are, their needs and buying patterns
• who your competitors are, what they sell and for what price
• how you can improve your business, product or service to become more competitive

When you conduct your research, you may want to consider:

• What your customer demands and expectations are?
• Where your customers are located?
• How and where they receive marketing?
• Who your competitors are?
• What are they selling and for what price?
• How they market their business?

3. Develop your business plan

An essential part of starting your business is developing your business plan. This will include the operational, financial and marketing aspects of your business.

A business plan is important if you are looking for a loan, applying for a business grant or pitching to investors. Lenders and investors want to see the true potential of your business idea. The plan can also help you identify your goals and develop strategies for achieving them.

Use our business planning templates to help prepare your plan.

Remember a business plan is a living document. You should review it regularly to remind yourself of your goals and modify it when plans change.

4. Recognise risk

While setting up your business can be an exciting time you should also think about how you can protect your future business in times of crisis or change. Create an emergency management and succession plan, to prepare and protect yourself against potential risks.

Consider what you would do:

• during a natural disaster
• if you could no longer run your business
• if you retire
• during technological disruption.

5. Determine your business structure

Now that you have a more of an understanding of your business, your product and your customers, you need to register your business and decide on your business structure.

Pick a business structure that best suits your needs. Your business structure refers to the way you will operate your business. You can also change your business structure as your business grows.

Types of business structures include:

• Sole trader: an individual trading on their own.
• Partnership: a group or association of people running a business together and distribute income or losses between themselves.
• Company: a legal entity run by its directors and owned by shareholders.
• Trust: an entity that holds property or income for the benefit of others.