Particularly if you were new to entrepreneurship, maybe your first business venture wasn't a smashing success. You can use what you learned to ensure that your subsequent enterprise exceeds expectations.
If anything, your chances for business greatness will be greater because you now have more firsthand knowledge of the sacrifices entrepreneurship requires. As an experienced business owner, you'll also have gained technical know-how to handle the tasks of registering or even insuring a business.
As you prepare to start afresh, take solace in the knowledge that statistics regarding the longevity of new businesses aren't as bad as you may think. Despite plenty of websites which tout scary statistics about startup failure rates, the Australian Small Business and Family Enterprise Ombudsman reported in 2019 that small businesses employing 0-19 people have a 59.7% rate of success.
Here are some more ways to start thinking positively about how you'll make this second launch a success.
Acknowledge what you've learned
The good news is, you're now likely far more familiar with the technical processes of starting a business. Many steps will be the same this second time around: registering the business, determining its structure, considering tax obligations and so on. There will still be licenses required, where applicable. You'll need a new Australian Business Number, or ABN.
You'll be approaching the same sorts of professionals to help you: solicitors, financiers and accountants. Contracts and insurance knowledge remains essential.
The creative processes won't have changed either, and this time around you'll be more experienced. You'll still be critically assessing your idea, writing a business plan, determining and implementing a marketing strategy, and looking for colleagues or partners.
Invest in your Network
The solitary nature of starting a business is well known. Entrepreneurs wear many hats and can easily find themselves in a silo, a bit apart from the world. This can lead to all sorts of missteps.
If this happened the first time around, seek to cultivate a greater sense of community this next time. There are many ways to do this, from joining online networking groups to hiring a business coach who will help you create action plans.
We know it might feel odd to ask for help. Longtime biz coach Rhiannon Rees writes on SmartCompany that many of us are reluctant to ask for help and often have self-limiting beliefs due to built-in cultural tendencies.
Yet many entrepreneurs value the weekly or monthly time periods they spend with a business coach, someone who can help them see their venture from a distance. The right coach can help you see problems down the road, identify possible time management issues or think through how your price structures or market testing could be better. Still not sure? Click here to read mentoring success stories from the New Business Assistance with NEIS.
Think about where things could've gone better the first time around and identify the gaps in your own skill sets. Rare is the entrepreneur who is good at everything. Maybe you have great marketing experience or instincts but were not great at managing cash flow. In that case, you can save on costs of a marketing agency but invest in a relationship with an accounting team like WMC Accounting.
Nail the basics
Many studies have examined why small businesses in Australia fail. Among the top reasons cited for the shuttering of small businesses are poor cash flow and poor strategic management of the business. According to 2018-2019 reporting from the Australian Securities and Investment Commission, at least 51% of insolvent small businesses reported inadequate cash flow or high cash use. Poor strategic management of the business was cited by small businesses in 43% of insolvencies.
This tells us that planning is important. It's essential to ensure enough funds will be on hand to cover the cost of supplies and products necessary to run your business. Taxes and other operating costs must be paid on time. Being able to cover these necessary expenses takes foresight.
Planning should include great attention to tracking and forecasting. It's also essential to delay the costs of adding staff or renting larger spaces until you have a reserve of cash. Sure, this means you may have to work longer hours for a while, as business owner Heather Marano writes for Inside Small Business in a reflection about lessons she learned running her own business.
While you're planning, you'll also have to consider eventualities such as your business' clients not paying on time. What will you do when this happens? What will you do if a client leaves or a large order cancels? Without a sound cash flow plan, you may need to dip into personal funds or other reserves.
As an experienced business owner now, you'll no doubt have a better sense of what's involved in crafting business plans and forecasting. Also, you don't have to go it alone this time. WMC Accounting offers business advisory options in addition to accounting service. We're here to provide end-to-end support for your latest entrepreneurial venture. Reach out today for a variety of managed services that can help your business shine.