When a hobby becomes a business
For some mums with a little luck, a good idea and lots of hard work, hobbies can turn into full-time and financially rewarding employment. While on the outside successful companies seem to just organically happen, there is a lot to take into consideration, plan and, in some instances, forgo.
Here are some steps to help you on your way.
The importance of a business plan
From a formal 100+ pages strategy; to a few scribbles on a napkin, business plans can take on any shape or form. Chances are if you are considering turning your hobby into a business you would have some form of a business plan even if it is in your head.
It is imperative that you're able to articulate your business plan and that it has clear, concise goals for the business. Many businesses fail on inadequate or unaligned business plans, in these cases not only are you losing your business but you could also become disillusioned and ultimately lose interest in your much-loved hobby.
When should your partner become a partner ... and other tax stuff
If you have considered turning your hobby into a business then you would have invested quite a bit of money into it. When you are investing money it is also a good idea to consider the tax and legal implications. Whether you partner in life becomes a partner in business and whether you choose to register for GST are all factors that need to be considered and, ultimately, have a bearing on the success of your business.
It is advisable to speak to a professional who would be able to advise you on the best way forward in terms of your business structure, financial plans and cashflows.
Insuring for the unexpected
'She'll be right mate' is an enduring Australian phrase, which can be held part-ways responsible for the huge under-insurance problem in Australia. Being unable to perform your job for a period of time if you are seriously sick or injured places enormous strain on both yourself and your family, which is said to magnify when you run your own business.
Learn from the pros
With experience comes knowledge, and this is certainly the case with small businesses. There are a wealth of networking events held throughout the country and although you may operate a business at home over the internet nothing beats getting out and having face-to-face contact with your customers, peers and like-minded women in business.
Each state in Australia has a small business network run by the respective state government, and there are also small business grants for women to consider.
Don't fear failure
Evidence suggests that first-time operators have roughly a 50/50 chance of survival, and that will largely depend on how they manage their business. The more efficient and savvy they are, the lower the failure rate. According to Australian Bureau of Statistics, an estimated 42 per cent of small businesses 'exited' between 2003 and 2007.
Importantly, if you do end up closing your business for any reason it is important to understand why, so that the next time you embark on a similar journey you will be better prepared and be able to make the informed decisions.
You can find out more about Life Insurance from Suncorp,
or call 1800 177 549.
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