Business Basics – A Guide for Anyone Looking to Start a Business

Starting a new business or embarking on a new business venture can be terrifying and exciting at the same time. As the owner, you are solely responsible for the way your business functions and if it succeeds or fails. The best way to succeed as a business owner is to understand the basics of starting and running a business before you actually begin. Here’s a little help to set you off in the right direction.

Basic business activities and business skills

As a small business owner, your ultimate goal is to maximise your profit. To do this, there are six activities that you can undertake:

1. Sales
2. Marketing
3. Finance
4. Accounting
5. Customer service
6. Human resources

As a business owner, you are expected to be a jack-of-all-trades and perform the above tasks. Some key business skills you should consider acquiring are:

• Sales skills: Skills that will help you follow your potential customers through the buyer’s journey, sell your product, complete a sale, expand your customer base, and repeat sales
• Marketing skills: Marketing and advertising your business through both traditional and online channels to develop your brand and increase the exposure of your business and what it offers
• Financial management skills: Skills to finance your business project and utilize those finances to ensure business growth and maximum results
• Basic accounting skills: Skills needed to keep and maintain records of your business’s income and expenditure and to ascertain where and how you spend your money
• Customer management skills: Skills to help you secure new clients and build lasting business relationships with them
• Strategic management skills: Skills to help you create a strategic business plan and stick to it
• People management skills: Skills to help you hire and manage your employees. Dealing with office conflict, determining the best packages for your employees, and more
• Operations management skills: Skills to help you choose your suppliers and manage them

If you don’t possess all these skills, you can always hire people who possess these skills, hire business advisors, or learn the skills you lack.

3 Basic business concepts every business owner must understand

1. The customer

Without customers, you don’t have a business. The customer is the focus of every business, and it is important to be able to identify your customer before you set up a business. Knowing more about your customer will increase the chances of your business succeeding.

2. Supply and demand

Every market is made up of two groups – sellers (supply) and buyers (demand). Is there a demand for what you want to provide? According to the principle of supply and demand, prices usually fall when supply is greater than demand, and prices are more likely to rise when the demand is greater than the supply. By understanding the nature of supply and demand in your market, you can plan, price, and make bigger profits.

3. Competition

Every business tries to outdo its competitors to gain a competitive edge and survive. Understand your competitors’ pros and cons. Then exploit their weaknesses by giving your customers products and services that are better, of higher quality, more friendly, and provide greater value and satisfaction.

11 Basic tips for business success

1. Conduct a market analysis to ensure your offerings are suited to the needs of the current market.
2. Choose a business that gives you a good return on investment.
3. Choose your business location wisely. Some cities have thriving business communities and it might be in your best interest to choose one of these locations.
4. Create a complete business plan before you start business operations.
5. Create a marketing plan.
6. Establish good budgeting methods and accurate bookkeeping and accounting practices.
7. Ensure you and your employees follow good time management practices.
8. Provide your employees with clear job descriptions and responsibilities, with measurable outputs.
9. Maintain an open-door policy so there is communication between you and your employees.
10. Make your customer your top priority at all times.
11. Consider business insurance to protect you and your business. Find out more here.

The four basic business structures in Australia

There are four common business structures in Australia:

1. Sole trader
2. Partnership
3. Company
4. Trust

Each of these business structures has its own unique traits, and will affect your tax, asset protection, and costs. You can change your business structure as and when your business grows. Talk to a legal adviser If you are unsure about the best structure for your business.

Conclusion

Starting a business is one thing, but ensuring its longevity is an entirely different matter. To ensure that your business is a success, ensure that your customers’ needs are your priority at all times. Keep in touch with clients and give them offerings that are simply hard to resist.

References

Small Business BC. 2021. Understanding the Basics of Business. [ONLINE] Available at: https://smallbusinessbc.ca/article/understanding-basics-business/. [Accessed 18 January 2021].

Smallstarter. 2021. Business 101: Five Important Concepts Every Entrepreneur Must Understand to Succeed in Business. [ONLINE] Available at: https://www.smallstarter.com/know-the-basics/business-101-5-important-concepts-every-entrepreneur-must-understand/. [Accessed 18 January 2021].

FreshBooks. 2021. What are Operating Activities in a Business. [ONLINE] Available at: https://www.freshbooks.com/hub/accounting/operating-activities. [Accessed 18 January 2021].

Australian Taxation Office. 2021. Choosing Your Business Structure. [ONLINE] Available at: https://www.ato.gov.au/Business/Starting-your-own-business/Before-you-get-started/Choosing-your-business-structure/. [Accessed 18 January 2021].