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The world of work is changing rapidly – and thanks to technology, operating a small business from the comfort of your own home has never been more attainable for the average Australian. However, it remains a significant challenge – one that many find justifiably daunting.
We examine some practical considerations, tips and insights to help you build and run a home business that’s profitable, resilient, and fit for the future!
Renters, check whether you need approval from your local council – and your landlord – before starting your home office
Council requirements around home businesses and home offices vary around Australia, so do your homework – especially if your business will be involved in the food industry. Not only does getting approval early on mean you no longer have to worry about an accidental infringement, you may also qualify for certain tax deductions against your costs! You may well be able to claim for equipment and furniture, a portion of your phone, electric and gas bill, and even a proportion of your insurance and rent.
Speaking of which, being upfront and honest with your landlord about your plans is also definitely the way to go. This way, you can discuss any concerns they might have (such as where your clients are going to park) beforehand, so you can ensure you’re not stepping on their (or their other tenant’s) toes.
Create a proper business plan
One of the biggest mistakes that first time business owners make – especially when they’re planning on working from home – is neglecting to put together a proper business plan. While you may not be planning on applying for funding from a bank, solid market research and financial forecasting to get through the early stages can be the difference between success and failure.
Even if your business plan is relatively basic, the simple exercise of putting one together has several benefits:
- You’ll get a much clearer picture of what your resources are, and how carefully you need to use them
- Identifying your target audience and creating user personas gives invaluable insight into choosing the right marketing strategy
- By laying out a timeline and clearly defining your primary business goals, you’re able to break a mammoth task down into achievable, realistic milestones
- Getting the facts and figures down on paper can help you spot challenges and weaknesses which might otherwise have come as a very unpleasant surprise
- Having a basic business plan in place makes it easier to apply for finance in the future should you need it
Remember also that your business plan doesn’t have to be set in stone. No-one can predict for sure how the market will react to a new product or service – but as they say, forewarned is forearmed! Without a business plan, it’s all too easy to blow through your capital and resources, placing your fledgling venture at risk before it’s had a real chance to thrive.
Know what to buy, and what to hire
If you’ve saved up capital to start your business with, or managed to get financing or a loan, it’s tempting to buy a whole lot of “essential” items and equipment straight out the gate. You might like to think of them as assets, but if they’re not bringing in more money than you spent on them, they’re not.
This is especially true when it comes to hardware and technology. Your business might well benefit from having the very latest gadgets to hand, but in the early days, you might not be able to justify the cost of purchasing them outright. This is where short and medium-term rentals can be a much more cost-effective option. If you’re bringing in some new employees, for example, then it’s probably going to make better financial sense to rent laptops and phones until you’re turning a steady profit.
The same is true for any devices or tech that needs upgrading regularly to keep your business competitive. Hiring means you can upgrade easily to a newer model every year or so, rather than having to fork out to buy it.
Focus on profit-making tasks first
Whether it’s spending weeks tweaking your website design, testing out different invoicing software, or trying to get the wording on your Facebook page just right, it’s incredibly easy to get bogged down in the details. Because it’s your business, it’s natural to want to get everything perfect before you launch your idea to the world – but this approach can actually be incredibly detrimental.
In the early days, your primary focus should be getting your business to a point where it’s self-sustaining. Any activities which cost money without bringing in a rapid return should be given as little time as possible. Once your company can stand on its own, you’ll have plenty of time to refine and polish.
Cut costs where it counts
Ask any business owner what their biggest challenges are – whether they head up a small startup or a multinational corporation – and ‘cashflow’ is almost certain to be up there. Even if you’ve got capital saved up, or haven’t quit your day job entirely yet, running as lean an operation as possible always makes good business sense. And while there may not be much you can do about overpriced electricity, keeping your costs as low as possible is the best way to ensure you’ve got the resources to make it through tougher times.