Starting A Business

Starting Your Own Business
A Primer For Budding Entrepreneurs
Profitkoach - Business Growth Specialists

Profitkoach
Your Presenter - Brian Bijdeveldt
• Business Coach & Consultant for
12 Years
• Member of International Coaching
Federation
• Certified Business Coach
• Facilitator For Marketing Programs

Overview
What we are going to talk about…
 The Entrepreneurial Seizure
 Why Do Businesses Fail?
 How To Avoid Becoming A Statistic
 Risk & Starting A Business
 Summary
 Questions

The Entrepreneurial Seizure

• The technician/artisan/craftsman
decides to go into business.
• No systems
• No financial control
• No idea of marketing the business
• Poor time management
Resource –
Michael Gerber – The E Myth or
The E Myth Revisited.
• 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..

The Story In Our Heads…
• 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!

Business Or Employment?
Business - potential Employment
o Great Income/profit
o Independence
o Control of your own
destiny
o Challenge
o Build a valuable asset
o A terrific lifestyle
o Wealth
o Contribution
o Steady Income
o Security
o Career Opportunities
o Challenge
o Structure
o Contribution
Which Has The Greatest Risk?

Entrepreneur Or Technician?
Entrepreneur Technician
o Has vision, goals &
mission
o Defines Strategy/plans
o Defines how the business
will expand
o Sets up business systems
o Builds business to be
easily managed
o Works On the business
o Tests and measures
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
Which One Are You?

The Good & The Bad
WELL RUN BUSINESS
o Profitable / high resale value
o Owner works moderate hours
o Required skills learned or
outsourced
o Owner can take time off
o Operations are systemised
o Cash flow is managed
o Planned marketing/sales
activities
o Leverage employed
POORLY RUN BUSINESS
o Low/no profit - low resale value
o Owner works long hours
o Owner “saves” by doing
everything
o Owner cannot leave business
o Adhoc delivery of services
o “Lumpy” cash flow
o Constantly chasing customers
Which One Would You Buy?

Why Do Businesses Fail?

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

Business Failure Rates
Not A Nice Set Of Numbers…
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
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 demand
Learn 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…
The 80/20 Rule
• 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!

Define Critical Systems
The core systems of your business…
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.
Lead
Generation
•Finding prospects
•Marketing your
business
Lead
Conversion
•Convert prospects
into customers
Client
Fulfillment
•How will
services/product
be delivered
•Client retention
Marketing
Operations Sales

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
How much capital
do you have to
• Less creative freedom (this may be a good thing!)
What’s your risk
profile?
Which One Suits A Technician?
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.

Summary
What we covered…
Why Do Businesses Fail?
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
brian@profitkoach.com.au
www.profitkoach.com.au

The Steps That Lead To Your Success!
Financial Control – Financial
management and reporting
Aspiration – Defining your Vision, Goals &
Objectives
Strategy – The strategies required to meet
your Vision
Tactics – Low level activities bundled as a
plan that implement your strategies
Amplify – Extending your reach through
leveraging other resources
ReInvention – Planning your growth and
development as an entrepreneur

Starting A Business

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