Many people dream of leaving the 9-to-5 grind behind and setting up their own business. Yet there are hundreds of horror stories of start-ups going broke in the first 18 months.

Here are five things you need to consider before starting a business.

The big why?

You’ve probably got a great idea of the product or service that you want to sell, but will it succeed where others have failed?

A solid business plan is “super important”

He recommends looking critically at your business idea to identify strengths and weaknesses, examine outside influences and consider how you can grow the business over time.

By starting small, with a basic item, you can get valuable feedback from clients or the market and then adapt and scale your product or service to achieve the turnover you’re looking for.

Where clients come from

Developing a great product or service is fantastic, but only if there is demand.

Maybe you’ve found a great way to do something a little differently. If you’ve done that, you need to see how many people are going to be interested in this product.

One of the first investments you should make is setting up a website and Facebook page to get sound feedback from your potential customers or clients.

Start inviting people into these different sources and ask them, ‘Do you want this?’ 

Small business office

What to name the business

The winning formula for any business start-up is a name that’s short, sweet and easy to remember.

First look at what other similar companies are using; you don’t want to be confused with the competition, after all. A good starting point is a domain name register search.

The paperwork

Once you’re confident with your offering, it’s time to get your paperwork in order so you can hang out your shingle.

You’ll need:

Australian Business Number (ABN)

An ABN is a unique identifier that allows you to interact easily with the Australian government, in particularly the Australian Taxation Office. It’s crucial for managing your GST obligations, paying staff if you have any and lodging your Business Activity Statements, essentially reporting your income to the tax office.

Register your business name

Registering your business name ensures no one else can use and potentially undermine all your hard work. You’ll also need it for your interactions with the government.

Register for GST

If you expect your business will turn over more than $75,000 a year, you’ll also need to register for GST purposes. You can get your ABN, register your business name and register for GST all online.

A plan for the future

I see businesses all the time start up and fail because they don’t think about where they want to be in the future and how the vehicle, being their business, is going to take them there.

His advice?

When you’ve got a product that you know is going to work, then you can start to manage it with other products that allow you to gain visibility into what your customers are interested in.

Armed with this insight, you can really develop your products.