Tips for starting a small business

I remember so clearly the moment I decided to start my own business. I was standing looking in the bathroom mirror and a thought came to me: I couldn’t make excuses any longer. If I was going to live an authentic life, I had to give it a shot.

For weeks, I had been listening to podcasts on how to start and grow a business. I was feeling so inspired and empowered. But there were so many doubts that kept creeping in. I had a full-time role at a cool start-up! It was a job thousands of young women would kill for and I made decent money! Who was I to give that up and take a risk on something that might not work out?!

But as I kept learning, thinking and dreaming, I realised that I was perfectly capable of going out on my own. I had enough knowledge and all the skills inside me to get started. The only thing that was really holding me back was fear of failure.

So to celebrate 18 months in business, I wanted to share some of the things I’ve learnt along the way. I also asked some of the small business owners in my network to contribute their tips too.

Do the math

The ultimate goal of any business is to make money. Or to be more specific, to make a profit. So you need to get comfortable with going over the numbers each month. Whether you are a service based or product based business, you need to know your costs and ensure you have set your pricing high enough to cover these and make a healthy profit.

The best advice for anyone starting a business is to get a good accountant. Take their advice on how to set up your business structure and how to do your accounting in a tax efficient way. Believe me, it will be the best money you’ve ever spent.

It’s no surprise that most of the small business owners I spoke to cited finances as the biggest area people should focus on when starting out.

Set your prices

Speaking of which… When you get started in business, it can be tempting to set your prices low to attract clients or customers. I go by the rule that if you never get a “no”, you’re leaving money on the table. If everyone says yes, that indicates that your pricing is too low.

If you don’t aim high enough with your pricing, you will be wasting precious time that could be spent on higher-value clients. I now give all potential clients a rough pricing brochure so that they can see if my services sit within their budget before we spend several hours on discovery calls.

This incidentally leads to Von Bishop’s tip, founder of Ivy Creative: “Be protective of your time. Work expands to meet time allocated. The more time you have, the more time you'll spend.” As a business owner, you need to know where every single hour is spent and whether that time is profitable or not.

Have a plan

When I first started my business, my only goal was to earn enough to match my salary at my previous full-time role. Now I’ve learned to be much more specific and strategic with my goal setting. I currently set three yearly lifestyle goals, plus a financial goal and a stretch financial goal. For example a lifestyle goal might be that I want to work with clients who match my values. But a financial goal is much more specific. I break down exactly how many clients I need and how much I need to charge them to hit that goal by the end of the year.

One of my favourite small Melbourne businesses owners, Lei Lei Clavey, gave the tip of having a 90 day plan and breaking this down into 3x monthly goals. I love this approach and am definitely going to try using short term goals from now on in addition to my longer term goals.

Finally, think like a CEO

It’s a common misconception that (and one that is outlined in the business book The E Myth) that a person with technical skills will also have the ability to run a business selling those technical skills. Often, the ability to deliver work and the ability to sell work, and run a profitable, efficient business, require completely different skillsets.

That’s why it’s so important to keep reading, listening to podcasts and taking advice from those who have gone before you. There are so many skills that you will need to learn in order to become the CEO of your business.

Be sure to set time aside each and every week to work on business development, whether that is self-education, goal setting or going over your financial projections. You can’t keep working away without dedicating time to track your progress and be strategic. Carve out time to focus on big picture work.