AGILITY AND SMALL BUSINESSES

✦ John Clarke, Success Tax Professionals

If you’ve ever thought of starting or buying a business, you’re not Robinson Crusoe. In July 2021 it was estimated that 344,000 new businesses were started in Australia.

The statistics also show it is likely that half of these businesses will close within two years of opening. What can we do to reduce our risk of losing our investment, our money and of burning out?

Some things we can do:

Be Agile

I’m sure many of us after having watched MasterChef or My Kitchen Rules think, “I could do that.” After all if Julie Goodwin or Poh Ling Yeow can do it, surely we can. Our friends come for dinner and they say that was spectacular.

Do you really know everything that’s involved in operating a restaurant? Are you going to enjoy being in a pressurecooker environment? Look at how over the past two years people have been forced to change how their business operates to succeed.

Agility for someone who wants to open a restaurant might look like this:

• First operate a food stall at a market. If you enjoy that and want to go to the next step maybe you operate a food van.

• Then and only then you might invest in the substantial set up costs of a restaurant.

Feasibility Study

A business feasibility study helps you work out if, and under what circumstances, the business will work and how successful it might be.

If you’re starting a new business, some questions to ask are:

• Is there a market demand and need

• Can a market be created

• How much competition is there

• Is the market static or growing

• Are there any legal requirements

For an existing business other questions can include:

• Why is the existing owner selling

• How are similar businesses performing

• How good is the business location