The idea of self-employment might seem glamorous to some, conjuring images of young CEOs pounding on their keyboards in fancy coffee shops or answering emails beachside, but the reality couldn’t be more different.
The first three years in business are critical – the Australian Bureau of Statistics states that over 60% of small businesses fail within this timeframe.
Businesses get terminated when startup owners are unable to cope with the following issues:
Lack of capital is one of the main barriers to running a small business in Australia. Unfortunately, too many entrepreneurs are unable to sustain their operations long-term due to insufficient funds.
The saying “It takes money to make money” holds true for business – office space, hardware, utilities, employee salaries, training, and other expenditures can cut into your profits.
The good news is that aspiring and established entrepreneurs have many options when it comes to raising capital. The Australian government gives away billions in grant funding each year. A grants consultant like Pattens can help you apply for more than 1000 grants available.
Being ambitious, hard-working, or enthusiastic isn’t quite the same as having solid business experience, though having those qualities can certainly help. The same holds true for having a business degree –formal education is a great investment, but there’s nothing like getting your hands dirty and putting in the actual work needed to drive a business to success.
Experience is the best teacher, and the only way to know how to navigate a difficult business situation is by having already gone through it in the past. Business experience allows you to anticipate the possible outcome of any given decision, as well as respond effectively to a wide range of scenarios.
Luckily, you can reach out to entrepreneurs and domain experts who have the experience you lack. There are hundreds of small business grants that offer mentoring and advisory services – again, working with a grants consultant can help you sort through your options.
It’s not enough to be profitable – you have got to know how to manage cash flow, especially if you’re on a limited budget. Many entrepreneurs have a hard time balancing the books, primarily because of an endless slew of expenditures and cash pits that drain their business of money.
Putting an effective cash flow plan in place will help you avoid overspending and enable you to channel your financial resources towards ventures with higher returns.
Hiring the wrong people can be disastrous for your business. Small companies with tight budgets often can’t afford to hire top talent, or simply don’t have access to them. As a result, they hire employees who may not have the skill and experience needed for the job.
The absence of a dedicated human resources department just adds to the problem, with business owners lacking the tools and processes needed to screen applicants.
The consequences can be dire – putting the wrong people in the wrong positions can cause conflict and hinder growth.
However, refusing to hire employees can be just as damaging. According to the Small Business Development Corporation, up to 63.8% of startups are sole traders or non-employing, which means that these business owners are doing everything themselves. And while this gives you more control over your business processes, it can also lead to fatigue and burn out.
If you’re not ready to set up an HR department, consider working with HR consultants and recruitment firms in the short-term to gain access to screening tools and expertise.
Company culture is important to the identity and overall health of a business. But the truth is that business owners can’t fully control or mold company culture. It tends to have a life of its own, growing and changing along with employees and the attitudes, habits, and behaviours they bring to the table.
You can try to steer company culture through corporate events like team building seminars and office parties, but the best way to guide it is through hiring people that best embody the culture you want to cultivate and putting them in leadership positions.
Running your own business is difficult but rewarding. Learn to cope with these issues by getting the right support from the government and other resources available to Australian entrepreneurs.