Take The Plunge

In this section:

• Take the plunge
• Evaluate your business idea
• When to start
• Restructure to survive on less
• Naming the business
• Intellectual property

Take the plunge

You have a brilliant business startup idea, but are you prepared to take responsibility for turning that idea into a profitable reality? Are you really driven to create a new business or are you simply seeking a change from your current job? 

There are many questions that need to be answered before taking the plunge of committing to beginning a new business. If the task of establishing your startup small business isn’t daunting, then you are not taking the project seriously.

As the founder of a small business you can expect to work long hours, with limited support, for a financial return that could be well into the future. However, with a strong idea and determination to see it succeed, you will be able to accomplish your dream.

There are also incredible rewards in running your own business startup. You have the incentive of knowing that all of your work will be of direct benefit to you and your business. As the owner of a business you work for yourself in a capacity that you find inspiring and rewarding.

Before founding your business or looking for business finance, you must be totally committed to making it a success. Your business will become the major focus of your time and efforts, and so you have to be extraordinarily passionate about your business idea. If you have an idea that you are genuinely passionate about it, will be far easier to find the motivation and drive to ensure your success.

Ask yourself:

• Are you able to commit the necessary time?
• Are you fit and healthy enough to sustain the effort of a new business?
• Do you have a strong support network of family and friends?
• Try out this quiz to find out if you are the entrepreneurial type?

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Evaluate your business idea

• Contact potential clients and customers to discuss the business.
• Gauge the interest in your business by offering samples of your products or services to potential customers as a pre-launch trial.
• Know your business prospects by researching your competitor’s business.

This evaluation is often referred to as a SWOT evaluation:

• Strengths are attributes of your business that are part of your business setup; unique product or service, your location, your price, quality of the product or service.
• Weaknesses are attributes of your business that are part of your business setup; untested business, lack of experience, lack of customer knowledge of your product or service, customers’ existing loyalties.
• Opportunities are external market factors that will affect your business; new market, new product or service.
• Threats are external market factors that will affect your business; other businesses in your area or industry, advances in technology.

Being realistic about your prospects is the most important aspect of this evaluation. Cautious optimism should be the guiding principle. Knowing the dangers and weaknesses of your business will be a huge advantage in seeking to avoid costly errors.

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When to start

Many budding entrepreneurs begin their small businesses while working full-time in other roles. Their own businesses may have grown from hobby projects that they developed in their spare time.

A big advantage of this method of venturing into owning your own business is that you have the opportunity to test the potential of your business idea and your own managerial capabilities while still having the safety net of earning a regular wage.

Also you can use the skills and market knowledge that you develop in your wage-earning role to further your fledgling business. It’s likely that in your nine-to-five job you will have heard complaints from customers are frequently repeated. If your boss isn’t able to meet the demands of these complaints, perhaps this could be an opening towards your own business, and business solutions you can offer.

The safety net of a regular and reliable income will also provide stability and security in the fledgling stages of your start up.

However there are dangers of beginning your own entrepreneurial business while still employed in another wage-earning role. Care must be taken to ensure that your business isn’t directly competing with the businesses of your employer, as they will likely have rights over any ideas and products that you develop. Be sure to verify your legal standing before offering any business that could be considered the property of your employer.

If you are planning to begin your own business while continuing to work full time, be sure to set up a workspace that is devoted to the running of that business. Customers will only take your business seriously if you present yourself as a genuine and committed business operator. Your business may operate in your spare time, but your customers will expect a full time level of service.

The option of starting your business while continuing full time work will not be suitable for all startup businesses. Some simply cannot operate as part time concerns. If you do not have the luxury of maintaining a regular income while starting your business, it will be necessary to secure significant investment capital. This will involve a greater risk on your part, but it also offers greater rewards as you can be completely focused on your business.

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Restructure to survive on less

Starting a new business will cause a strain on your personal finances and it’s likely that you will need to make changes to your personal spending in order to accommodate for the new business.

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Naming the business

When naming your business, there are four important questions:

• Is the name memorable?
• Does it describe what the business does?
• Does the name give your business the image you want to project?
• Will your business name limit you to trading within a niche market and limit your business’s potential growth?

You can’t trade under a name that could be considered to be offensive or misleading. If you’re not trading under your own name, you will need to register the business with the relevant government office in your state or territory. You will need to search their records to ensure that your chosen name does not infringe on other business names.

Trading under your own name has disadvantages. One day you may want to sell the business; if the brand is your name, the business may be worth less without you.

Registering the business name

Your business name has to be registered in every state in which you are trading unless you plan to trade under you own name. This process does not give you trademark protection, but you must do it so that your ownership of your business is on public record.

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Intellectual property

There are several forms of intellectual property protections that can be obtained to protect your business’s unique selling point.

Patents protect new or improved products or processes: If you have a new device, substance, method or process that is new, inventive and useful, you should apply for a patent. A patent protects your intellectual property by granting you exclusive sale rights over the product or process. A standard patent protects your business interest in the product or process for 20 years.

You must not display, discuss or sell your invention before obtaining the patent. If you do, you risk losing your right to take out patent protection. If you talk to employees, business partners or advisers about your invention, it is advisable to have them sign confidentiality agreements for your protection.

Trade marks protect letters, words, phrases, sounds, smells, shapes, logos, pictures, aspects of packaging or a combination of these, to distinguish your goods and services from those of other traders. To get protection for a trade mark, you must apply to IP Australia (see below).

Designs protect the shape or appearance of manufactured goods. A design is the overall appearance of your product, including the shape, configuration, pattern and ornamentation that give your product a unique appearance.

Your design must be clearly new and substantially distinctive from other products already available to Australian consumers. It must be previously unused and unseen in the Australian market – this even forbids internet publication of the design before the date that you made the design registration application.

Copyright protects original material in literary, artistic, dramatic or musical works, films, broadcasts, multimedia and computer programs from unauthorised copying. Copyright protects your original expression of ideas, not the ideas themselves. In Australia, it is free and is created automatically when the work is created. This copyright material is also protected under the laws of other countries that are signatories to the international business treaties.

Circuit layout rights protect the three-dimensional configuration of electronic circuits in integrated circuit products or layout designs. Circuit layout rights are automatically protected and there is no requirement for you to register your layout design.

Plant breeder’s rights protect new plant varieties. To protect your plant breeder’s rights you must be able to prove that your new variety is distinct, uniform and stable. You must also prove that your plant is clearly distinguishable from previously existing plants.

Trade secrets and confidential information can be protected through confidentiality agreements with employees and suppliers. This protects your business by ensuring that your employees cannot sell the secrets of your business to your trading rivals.

Your business is not protected from competitors who independently invent similar processes or products. It only protects your business from exploitation by business espionage and unscrupulous employees.

You also need to make sure you do not infringe other businesses’ rights. IP Australia offers a business names applicant search service for a $40 fee. For this cost you will receive a report showing if there is an existing registered trade mark that is identical or very similar to your proposed business name. This reporting will take one business day to complete. You can contact IP Australia on 1300 651 010 to request this search.

Further information on intellectual property rights can be found at IP Australia

Registering your IP rights in Australia will not grant you international protection; this must be applied for separately in each of the territories that you seek to do business.

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