Starting A Business

Starting Your Own Business

A Primer For Budding Entrepreneurs

Profitkoach - Business Growth Specialists


ProfitkoachYour Presenter - Brian Bijdeveldt

• Business Coach & Consultant for 12 Years• Member of International Coaching Federation• Certified Business Coach• Facilitator For Marketing Programs


OverviewWhat we are going to talk about…

The Entrepreneurial Seizure

Why Do Businesses Fail?

Risk & Starting A Business

Summary

Questions

How To Avoid Becoming A Statistic




• The technician/artisan/craftsman decides to go into business.

• No systems• No financial control• No idea of marketing the business• Poor time management

• The business is set up from the start as a vehicle in which the ‘entrepreneur’ can pursue their trade (social media guru, web designer, physiotherapist, etc). There is no exit plan..

Resource – Michael Gerber – The E Myth or

The E Myth Revisited.


• The dream of proving yourself and being your own boss

• Out performing the pack.

• This is the fastest way to realise all your goals and dreams of independence .

• Any other way is too slow.

• Success is mine!

The Story In Our Heads…


o Great Income/profit o Independenceo Control of your own

destinyo Challengeo Build a valuable asseto A terrific lifestyleo Wealtho Contribution

Business Or Employment?

o Steady Income

o Security

o Career Opportunities

o Challenge

o Structure

o Contribution

Business - potential Employment

Which Has The Greatest Risk?


o Has vision, goals & missiono Defines Strategy/planso Defines how the business

will expando Sets up business systemso Builds business to be

easily managedo Works On the business o Tests and measures

Entrepreneur Or Technician?

o Creates a job with overheads

o Limits growth due to dependence on owners capacity

o Builds a business based on their technical skills

o Works In the business

Entrepreneur Technician

Which One Are You?


WELL RUN BUSINESS

o Profitable / high resale value o Owner works moderate hourso Required skills learned or

outsourcedo Owner can take time offo Operations are systemised o Cash flow is managedo Planned marketing/sales

activitieso Leverage employed

o Low/no profit - low resale valueo Owner works long hourso Owner “saves” by doing

everythingo Owner cannot leave businesso Adhoc delivery of serviceso “Lumpy” cash flowo Constantly chasing customers

POORLY RUN BUSINESS

The Good & The Bad

Which One Would You Buy?




The Missing Pieces…

Competition or lack of market knowledge

Lack of financial planning and review

Over-dependence on specific individuals in the business

Owners concentrating on the technical, rather than the strategic work at hand

Inadequate capitalisation (not enough money)

Lack of management systems

Lack of vision, purpose, or principles

Poor market segmentation and/or strategy

Poor time management


Years After start Up % Failed Cumulative % Failed

Year 1 32 32

Year 2 17 49

Year 3 13 62

Year 4 7 69

Year 5 5 74

Year 6 4 78

Year 7 3 81

Year 8 3 84

Business Failure Rates

Not A Nice Set Of Numbers…

From ABS and analysis by Rolffe Peacock 2000.

• Failure rates decrease over time – the owners are learning!

• Around 26% of businesses survive the first 5 years.


What’s A Quick Way To Kill A Business?

Hint: It’s A Financial Thing…


Cut Off Cash Flow!

Cash Flow…The Oxygen of Your Business

• Debtor Management• Collect quickly/pay slowly

• Access To Funds• Have extra cash or loan

arranged

• Inventory Control• Don’t tie up excessive

cash in stock/equipment

• Borrowings• High interest rates hurt!


Avoid Being A Statistic


“Your Business Is A Reflection Or Extension Of You”

Perform A Self Audit…

• Am I Passionate About (My) Business?• Am I willing To Work Hard?• Do I Have Energy & Drive?• Am I Persistent?• Will I Take Responsibility For My Decisions?• Do I Have A Plan For Success?• Am I Willing To Listen To Advice?• Am I Ready To Learn New Skills?• Can I Handle Disappointment?• Do I Like To Compete?• Could You Make “Cold Calls” For Business?


Begin With The End In Mind…Define your Purpose• Your Vision, Goals, Objectives • Why You Want To Go Into Business • What Service/Product You Are Going To Offer Research The Market• Who You Are Selling To (The “Graphics” Demo, Psycho, Geo)• The Viability Of The Market/Trends – (can you compete?)• Surveys/interviews /trade organisations - test demandLearn about Time Management, Marketing & Sales Draft Your Exit Plan

Plan On Building A Business That Is Sellable


Identify Skills Gaps…

• Technician• Marketer• Salesperson• Bookkeeper• Administrator• Financial Manager• Supervisor • Trainer • Negotiator• Strategist• Creative Consultant

Which Of These Roles Can You Outsource To Free Up Your Time?


Manage Your Time…

• 20% of your activity returns 80% of your results

• 80% of your effort delivers the other 20%

• Plan to outsource the 80% tasks such as:

• Bookkeeping & Administration

• These consume valuable time

• Whereas Marketing & Sales

• Can generate Income

Pay $20 an hour so you can make $100!

The 80/20 Rule


Step 1. Dream -The vision , goals & Mission

Step 2. Intention - Design the client fulfillment processes.

Step3. Intentional growth – develop the lead generation and conversion systems.

Define Critical Systems

The core systems of your business…

Lead Generation•Finding prospects

•Marketing your business

Lead Conversion•Convert prospects into

customers

Client Fulfillment•How will services/product

be delivered•Client retention

Marketing

SalesOperations


Financial Stuff…

Work out what you will charge/prices


Estimate Break Even

Set Sales Targets

Service Business Spreadsheet example

Risk & Starting A Business


It’s All About Risk Management…

Risky Business…

• Start a new business from scratch• Higher risk, lower entry cost (home based?)

• Buy an existing business• Higher entry cost - existing cash flow & customer base

• Buy a franchise (new or existing)• Systems already developed• Brand recognition• Proven model• Higher cost of entry• Ongoing fees and commissions• Less creative freedom (this may be a good thing!)

What’s your risk profile?

Which One Suits A Technician?


How much capital do you have to

risk?

Other Considerations…

Ensure you have setup costs plus 6 months

working capital

Have you accounted for living expenses as part of

your working capital?

Don’t expect a business to be profitable in the first

year

Understand liabilities such as leases


Go For It!

Prepare Before You Dare…….• Business is a tight rope and

your job is to balance out the various roles and responsibilities that a business demands of you.



SummaryWhat we covered…



Avoid Becoming A Statistic

Ways To Enter Business


Resources

PDF Of PowerPoint Presentation

The E-Myth or The E Myth Revisited(Michael Gerber)

www.business.gov.au

Feel free to contact me [email protected]

http://www.profitkoach.com.au/

Strategy – The strategies required to meet your Vision

Financial Control – Financial management and reporting

Aspiration – Defining your Vision, Goals & Objectives

Tactics – Low level activities bundled as a plan that implement your strategies

The Steps That Lead To Your Success!

Profitkoach FASTAR Model ™

F

A

S

T

A Amplify – Extending your reach through leveraging other resources

R ReInvention – Planning your growth and development as an entrepreneur