How to know if now is the right time for your business idea

While almost every individual experiences those days at work where they can't help but imagine what it would be like to be their own boss, very few actually act on the impulse.

Many Australians may have ambitions to start their own business, but the fiscal requirements as well as the intensive planning required can feel overwhelming to an individual just getting started as an entrepreneur. This is more true than ever as the Australian Bureau of Statistics has reported an uptick in unemployment due to the fiscal impact of COVID-19.

Given the current state of the world, it can feel like an especially daunting time to even consider the possibility of creating a business of your own. However, a strong startup sector is actually a critical component of a healthy and growing economy.

Whether you are just entering the workforce after graduating or are considering a change in your career path, it is important to consider the following factors when determining if now is the right time for your business idea.

Is there a demand for your product?
One of the most critical considerations before you launch your business is calculating whether or not there is a viable market for your product or service.

Demand constantly fluctuates as a result of market trends, seasonal influences and current events, making it a dynamic factor that plays heavily into the potential success of your business. To quantify this number, Shopify has recommended several methods for small-business owners and startups, including using search engine optimisation tools. These frequently free or budget-friendly services will provide you with powerful insights regarding the search volume and estimated organic traffic for websites related to your product, allowing you to gauge what the current demand looks like. This will allow you to get a better understanding of the market landscape without too heavily investing in research and development.

If your findings lead you to conclude that demand is too low, you may want to wait until another point in the year if you believe it is related to a seasonal influence or trend, or instead tweak the idea for your product or service to better fulfill an existing need in your target demographic.

What is your current fiscal situation?
Having a pool of working capital available to you is an equally important factor in starting a business.

Before you invest a single dollar into your new venture, take the time to create a carefully considered business plan, including estimations for the costs associated with daily operations, marketing efforts and anything else your business will require. While starting your own business is a leap of faith no matter what funds you possess, having the proper resources to support your idea allows you to have the flexibility to adapt as you learn more about the market you reside in.

If you do not personally have the funding for your business, you could reach out to your own network or create a campaign online to attract angel investors. These are individuals who will provide the capital for your startup, typically in exchange for ownership in the company or some form of debt. If you are not comfortable with borrowing the funds, it may be best to wait until you can pool together more capital for your business.

Do you have the support?
Business owners will wear many hats when in the early stages of starting their own company. However, it is not realistic to expect yourself to be able to personally fill every role within your own business. This is likely to very quickly result in burnout, removing much of the passion that motivated you to pursue this opportunity in the first place.

Consider your personal network, including your family, friends and professional colleagues. Do any of these people have the talent, time and willingness to jump in to assist you if you ask? Do you have the funding or other resources to offer them in exchange for their help? While some of your peers may be willing to provide a favour or two, you should determine whether or not you have backup in the event your business blossoms. If not, you will need to be prepared to hire employees to help you in a more official capacity.

If you decide after reviewing the market demand as well as the funding and support available to you that it may be wise to take a step back, use the time to reflect on your business idea. Research, plan and develop to further improve the likelihood of your success given the opportunity to try again in the future.

Need help managing your assets to keep your business running? The team at WMC Accounting is there for you. Contact us today and together we can help make your dreams of being a business owner a reality.