Are you ready to be a business owner?
Becoming a business owner can be a rewarding and fulfilling experience. But it can also mean exposure to new risks, long hours, hard work and other challenges.
Investigating both the personal rewards and challenges associated with starting a business can help you make an informed decision about what starting, buying or running your own business will mean for you.
Video: Starting a business
Watch our video to help you turn your business start-up idea into a reality.
- how to research, develop and test your business idea
- how to assess and improve your business owner skills
- exploring legal and regulatory requirements
- reviewing what you need to do ahead of opening day.
The realities of starting a business
Common rewards of owning your own business include:
- greater flexibility—as a business owner, you will have the freedom to make decisions about how you run your business and who you work with
- personal fulfillment—starting your own business might have been a long-time goal or dream and its success will be significant
- financial gain—if your business is successful, you may enjoy more financial benefits compared with working for someone else.
But there are also challenges with owning your own business:
- long work hours—starting a business requires a large time commitment, particularly in the initial stages. For some business owners, long working hours will always be required
- financial pressure—there are many costs that come with starting a business, for example equipment, insurance, salaries and fit-outs. These costs are typically higher during the initial stages of starting a business when you are yet to make a profit
- uncertainty and failure—a high level of uncertainty exists when starting a business. Many new businesses fail in their first 3 years of operation due to poor planning and management
- loneliness—being a business owner can be isolating. If you are considering becoming a business owner, it is important to have the support of your family and friends, trusted professionals, mentors and other business owners.
Consider the possible sacrifices
In the early and often challenging years of establishing a business, you may need to make various personal, financial and family sacrifices.
Before you start your business, consider the effects of making these sacrifices. For some business owners, starting a business will mean:
- increased financial stress and pressure
- the need to use personal or family equity to fund the business in the initial stages (e.g. refinancing or selling assets)
- reduced income to spend on other things outside of the business (e.g. school fees, holidays)
- an unpredictable income stream
- less time available to spend with family and friends, or on hobbies and personal interests
- lack of annual leave and public holiday leave, particularly when starting the business
- difficulties in managing physical health routines and demands.
Support options for business owners
Having support as a business owner is key to overcoming the common challenges involved in starting a business. Various support services exist including the following.
Beyond Blue's NewAccess program provides free and confidential mental health coaching. This has been designed to provide business owners and sole traders with specialised coaching and support.
Heads Up provides small businesses case studies with practical tips on how to look after yourself when starting a business. Heads Up has also collated a list of actions (PDF, 1.7MB) that business owners can take to improve their mental health and wellbeing.
Assessing your personal attributes
Your personal attributes will influence how you handle circumstances while starting and running a business.
The following attributes commonly describe successful business owners and entrepreneurs:
- problem solving
- calm under pressure
- responsive to challenges.
Before you start your business, it can be helpful to assess your personal attributes to determine if you have the necessary traits to successfully operate a business.
Consider each statement in the following self-assessment and rate yourself.
|I handle pressure well.|
|I can maintain a positive attitude even when things are stressful.|
|I operate well under stressful conditions.|
|I enjoy interacting with others.|
|I am confident managing my finances.|
|I can motivate myself and stay focused on the tasks at hand.|
|I can manage risk and uncertainty.|
|I can remain positive even when under stress.|
|I am a problem solver.|
|I have excellent time management skills.|
|I can cope with failure.|
If you answered rarely or never to some of these statements, consider seeking professional mentoring advice on how to develop these attributes.
Learn more about skills for running a business.
Motivation, time and energy
Before starting your business, you should consider if you have the necessary motivation, time and energy available to operate it.
- What motivates you? How will you stay motivated through difficult times?
- How much time you can realistically devote to the business?
- Are you in general good health? Long hours and stress can affect your energy and motivation.
- Do you have someone who will help you stay motivated? Are your family and friends supportive?
- Can you access a network of other people who are starting their businesses so you can learn from and motivate each other? For more information, see:
Reflecting on your goals
When deciding if you are ready to start running a business, it can help to define your business and personal goals.
Business goals describe what you expect your business to achieve over a set period. For example, you might want to start a business in the next 6 months and profit from the business in the next 12 months.
Personal goals are the goals you have for yourself outside of the business. They might relate to family, lifestyle, community or spiritual goals. For example, spending more time with family and friends, giving back to the community, retiring early or increasing your savings.
Consider how your personal goals align with your business goals to assess if your business will be achievable.
Try defining SMART goals:
|Type of goal||Sub-type||Example|
|Personal||Family||I will list all expected school events for my kids for each term and arrange a phone answering service during the times I will be out to make sure they have my full attention.|
|Lifestyle and Health||
I will choose 2 hobbies to keep for the first 6 months of my business and then review how they have affected my availability.|
I will attend the free weekly over-50s physical fitness and well-being program run by local council.
|Community||I will attend the community garden committee and give at least 1 hour of my time per week.|
|Spiritual||I will prioritise my daily spiritual reading, quiet prayer and contemplation by getting up 30 minutes earlier.|
|Business||Strategic||I will prepare my business plan with the help of a mentor or friend. I will complete the plan at least 1 month before starting my business.|
|Financial||I will make $200,000 in profit within the first 6 months of starting my business.|
|Growth||I will double business sales within 18 months of operation.|
|Social||I will donate 5% of business profits to charity.|
Prepare for exiting the business
It is also a good idea to think about how you might exit the business, even if you don’t think this will happen any time soon.
Consider how and when you might want to sell your business, if you intend to pass the business to a family member or if you would like to keep a percentage of the business long term.
Asking yourself these questions early on can help you make decisions about the type, structure and operation of your business.
- Understand how to turn your idea into a business.
- Take the business readiness health check.
- Learn about break-even and profit.
- Read about benchmarking your finances.
- Find out how to prepare a business plan.
- Last reviewed: 10 Oct 2022
- Last updated: 10 Oct 2022