23 Mar The ultimate checklist for starting a home business
We’ve put together the ultimate checklist for starting your home business.
If you’re still trying to work out what business to pursue, check out our Business Ideas section. This article will also be helpful: How to choose the right business idea: the four criteria that matter.
If you’ve got your business idea ready to go, read on!
Check list for starting a home business
Here’s a quick summary (with tick boxes for people that prefer to ‘print-and-tick’ a paper list!).
Branding and intellectual property protection
Automation and outsourcing
Invest in yourself
If you saw this heading and yawned, winced or rolled your eyes – you’re not alone. Record keeping is not the most exciting topic.
Don’t worry, I’ll keep this brief and basic. Get a shoebox ready.
Regardless of your business activity, it’s going to help you in the long run if you establish effective systems for record keeping. This is particularly true for your expenditure and revenue.
You’ll need to reconcile your business costs and revenue at the end of the financial year (plus Goods and Services Tax, if applicable); so do yourself a favour and save invoices and receipts as you go. It means you won’t have to do a mad scramble to pull together all the relevant documents at the end of the financial year.
The shoebox strategy
A simple approach is what’s called the ‘shoebox strategy’. This simply means throwing all of your invoices and receipts into a shoebox (or other storage container of choice) – so at least everything is in one spot! You won’t be scrambling to find all your documents at the end of the financial year, but it’s not exactly organised – it’s still a pile of papers in a box, after all.
The digital equivalent would be setting up a folder on your computer, named something like ‘2017-18 financial year’. You might then create two more folders under that one, named ‘Expenses’ and ‘Revenue’. Add your emails, attachments, scanned documents etc to the applicable folders – and you’re underway with your digital shoebox strategy.
A bonus step would be setting up a backup system for your digital records. That’s a breeze, thanks to services like Google Drive.
The ‘I have better things to do with my time’ strategy
If you really want to get off to a great start, then it’s well worth considering an accounting solution like MYOB. This is particularly true if you need to manage payroll (i.e. you have, or will have employees).
Why use accounting software? It should become crystal clear when you read the ‘Automation and outsourcing‘ section shortly, but in a nutshell: you can’t and shouldn’t do everything.
You can put that shoebox in the recycling now.
Branding and intellectual property protection
It’s worth thinking about your branding early. Building a terrific brand can take time. Getting it wrong from the outset could also mean rebranding later, which can be a frustrating and expensive exercise.
Even if you’re going to be a sole trader – you still have a personal brand. What brand image do you want to convey?
It’s also important to consider intellectual property protection for your brand. This includes protections such as trade marks and securing the most appropriate domain names.
Failing to protect your brand could mean customer confusion and lost revenue to competitors or indeed nefarious people using a brand that’s identical or very similar to yours.
See our comprehensive branding guide for detailed tips on building (and protecting) an awesome brand.
In almost all cases, you’ll need an Australian Business Number (ABN). If you don’t already have an ABN, or require a separate one, you can apply for an ABN online through the abr.gov.au website. There’s no charge for getting an ABN.
You may also need to register an Australian business name. For more details, see our article: How to register a business name.
If you plan to operate the business as a company, then you must also register a company name. For more details, see the business.gov.au website.
Depending on your intended business activities and industry sector(s), you may need licenses, permits or other approvals to operate your business.
A good place to find information on government requirements to operate your business is the Australian Business Licence and Information Service (ABLIS). It’s a free online service delivered by the Australian, State and Territory Governments.
The ABLIS website will help you identify relevant state, territory, local and Australian government licences, permits, approvals, regulations and codes of practice that may apply for your business.
Depending on your intended business activities and industry sector(s), there may also be additional legal considerations.
For example, if you intend to operate in the financial sector, you’ll likely need a comprehensive terms and conditions page on your website, and possibly further disclaimers on certain parts of your website (e.g. articles containing general financial advice).
For particularly complex areas, or business activities with high degrees of risk or regulatory oversight, you may wish to engage a legal professional.
There are also a number of online services that provide discounted pricing on documents such as: terms and conditions; privacy policies; email disclaimers; and employment agreements.
For example, LawPath is an online service that we’ve used. They offer you the first document free when you sign up (with no obligation to purchase further documents). LawPath also offers subscriptions, which may be beneficial if you need legal documents on a regular basis.
Automation and outsourcing
One of the biggest resource limitations that you’ll face for your business, is the finite amount of your own time that you can devote to it.
There’s a hard limit on the number of hours in any given day, and the number of hours that you can work (productively) before requiring essentials like food and rest!
It all starts with mapping out the tasks and processes that will make up your business activities.
One of the best ways to maximise efficient use of your time, is to automate or outsource routine activities that don’t require much (or any) judgement on your part. By automating or outsourcing routine tasks, you’ll free up more time for you to work on the bigger picture stuff.
To start with, you could look at outsourcing routine, low-skilled activities, such as data entry. If you’re spending four hours every week on data entry, that’s four hours that could be better spent on growing your business (e.g. pitching your products to prospective customers).
There’s the old adage that says “you should be working ‘on’, rather than ‘in’ your business“.
Once your business is up and running, over time you should be identifying new opportunities for automation or outsourcing. After all, it’s about working smarter, not harder!
To have any chance of selling your products or services, people need to know that your business exists!
And yes, you should get business cards. Every business owner should have business cards. They make it super easy for people to remember and recommend your business. Vistaprint offers great quality business cards cards at very affordable prices.
The focus of marketing activities varies depending on the maturity of a business. At the very early stages, your focus is likely to be on raising awareness of your brand and offerings; and of course encouraging your target market to purchase your products or services for the first time.
This can often end up being both a market education activity (raising awareness of your brand and offerings) and a market testing exercise (is your messaging right, and do they really want your product?). You may receive market feedback that encourages you to adapt your messaging (or perhaps your products or services). For example, you may find that some advertising resonates with your intended customers, while other messaging seems to be missing the mark; and so you can adapt your marketing activities accordingly.
Some people will recommend that you prepare a detailed, comprehensive marketing plan. That’s often a good idea, but you could also just start by focusing on a simple examination of the three questions that matter most when kicking off your new business:
- Who is your target market?
- What is your value proposition?
- Where and how is the best way to reach your target market?
1 – Who is your target market?
The first question is about identifying and understanding your target market.
For your marketing activities to be effective, you need to understand your target market. This helps you to tailor the content and design of your marketing activities, so that it’s appropriate for your audience. For example, an informal, friendly tone may be appropriate for some markets (e.g. students); while a more professional tone may be better for others (e.g. accountants).
2 – What is your value proposition?
The second question is about identifying and outlining your value proposition.
What benefits does your product or service provide?
Why should a prospective customer buy your product or service?
To sell anything, you need to be able to articulate why people should buy it.
At this point, you should also be considering pricing. A great product that’s priced too high may not represent good value for your target market. Conversely, you also need to turn a profit (at least eventually!), so whilst pricing very low may deliver more value for your customers in the short term, it could also lead to the demise of your business in the long run.
Pricing also sends a value signal to prospective customers, it can set expectations as to what value they may derive from their purchase.
For example, a really cheap product may set very low expectations. Potential customers may choose not to purchase a cheap product, as a low price typically suggests a low quality product; and quality might be an important factor in their decision making.
Meeting or exceeding customer expectations is a tricky balance.
- You shouldn’t over-promise and then under-deliver, because your customers will ultimately be disappointed that your product didn’t meet their expectations (expectations that you seeded!).
- You also don’t want to set expectations really low (so that you can easily exceed them), because prospective customers may expect so little – that they decide not to purchase at all.
The right path will depend on your target market and your offerings, but ideally you should be providing customers with a product that meets and in some areas exceeds the promises that you made in communicating your value proposition to them (including the price you set).
3 – Where and how is the best way to reach your target market?
As an example, your initial market research may suggest that the majority of your target market use social media. The next step would be identifying the most appropriate platforms to use for your marketing campaigns. For more info on this topic, see our article on maximising the benefits from social media.
Following on with the example above, once you’ve identified the social media platform(s) favoured by your target market, you would then craft marketing material that conveys your value proposition and is likely to resonate with your target market.
Invest in yourself
We’re finishing on the most important point.
The key determinant of the success of your new business, is you.
Invest in yourself. Grow your knowledge, skills, and experience; because your home business will directly benefit as a result.